When buying a new-build-property, one of the last steps to be taken is signing the deeds of sale giving you title to the property, a process that can be both exciting and worrying, as the procedure and documentation required is different in each country.
The deed signing process and delivery of a new-build property in Spain is carried out when the signing protocol is formalised before a notary and the seller has received the stipulated price in full.
The title deeds are executed in accordance with specific regulations passed by the Ministry of Transport, Mobility and Urban Agenda, thus standardising the procedure and requirements. If you are thinking about buying a new-build home in Spain and you want to find out what the deed formalisation and property handover process will involve, we invite you to read on.
What is the deed of new construction?
Before the first purchaser signs and receives their deed of title or ownership, other deeds have already been formalised at different stages in the project.
When planning the construction or acquisition of a building, the developer must obtain the deed of declaration where the existence of a new construction is legally stated. This step is compulsory in order to register the property and can be done before the construction of the building is completed; indeed, most banks usually ask for the deed of new construction as a prerequisite for granting financing.
The requirements for obtaining the deed of new construction depend on the state of the building to be declared.
New building under construction
This deed is the one that is formalised when the building has not yet been completed and requires the developer or seller of the property to provide a series of documents:
- Certificate of conformity: a licence must be obtained from the municipal authorities where the property is located, which indicates the identification details of the property. A technician will then issue a certificate stating that the construction corresponds to the description.
- The completion certificate: this certificate determines that the work has been completed and meets the requirements stipulated in the certificate of conformity.
New construction completed
When the construction has been completed and complies with all the requirements established by the OCU (Organisation of Consumers and Users), the seller will provide the purchaser with the following documentation:
- Title deed
- Act of conformity, approval or administrative authorisation
- Certification issued by a technician.
- Ten-year insurance covering material damages stemming from concealed faults or defects in elements that directly compromise the mechanical strength and stability of the building.
- First occupation licence or prior authorisation of the same.
- Energy efficiency certificate.
- Certificate of habitability.
- Geographical reference coordinates.
- Building Book.
- Deed of horizontal division.
- Certificate indicating there are no outstanding debts with the Community Homeowners Association.
- Documentation/Minutes of recent CHA meetings.
- Proof of payment of the latest property tax (Impuesto de Bienes Inmuebles – IBI) bill.
Cost of the deed formalisation process
The cost of formalising the deed of sale of a new-build property depends on the Autonomous Community in which it is located and on the fees of the notary public who attests the proceedings.
The standard tax levied is Stamp Duty (Impuesto de Actos Jurídicos Documentados) and this ranges between 1.5% and 3% of the appraisal value or cost of the property being declared, depending on the autonomous community.
The notary supervising and attesting the deed of sale verifies that all the documents provided are legal and that the property complies with the current regulations determined by the public administration.
Notaries are independent professionals who can clarify any doubts about the public deed of sale and offer legal advice. Their fees are stipulated by national law and are therefore the same all over Spain and can be estimated beforehand. The fee will increase in line with the price of the property being transferred, the complexity and therefore length of the deed itself, and the number and type of copies of the deed issued.
When is the handover of the keys to a new-build property?
The handing over of the keys takes place after the deed formalising transfer of ownership of the property is signed and the buyer acquires all the rights and obligations inherent to ownership of the property. At this point the seller gives the buyer the keys to the property. A tip: these should always be checked for correct operation, as a mistake in the keys handed over is not unheard of!
In the event that the property is part of a homeowners’ community, the seller is also obliged to hand over the corresponding keys, such as the entry lobby, mailbox, etc. Some buyers choose to change the lock when they purchase a property, this way they feel more secure knowing that there is no possibility of further copies of their keys.
Although it is not usual, if there is a delay in the delivery of the keys with respect to the date that appears in the sale contract, the buyer may request compensation for the inconvenience caused, such as having to rent another property, use of storage facilities, etc.
Sometimes such delays may be due to force majeure, such as a flood, a workers’ strike, the discovery of archaeological remains or other unexpected and unavoidable events. In this case the buyer would not be entitled to compensation.
As you can see, the process may become quite complex. Aware of how daunting these issues may be for foreign property investors, Breezom’s services include expert legal advisory in a number of working languages, to ensure you a seamless and stress-free handover.