Tips regarding contracts
You have finally found your dream Mallorca property for sale and might be a touch nervous with regarding the whole procedure. There is no need to as you have the professionals at Balearic Properties by your side and they have already advised you to engage an English speaking lawyer to represent you. The lawyer’s services should commence before you sign a contract or make a down-payment and he/she will negotiate terms and agreements for you. Any contract will be drawn up in your native language but bear in mind that legally, over here only the Spanish version counts before a court of law.
The usual sequence is:
- A contract of reservation is generally drawn up to secure the villa or town house for sale you wish to purchase. A payment gesture is expected, which depends upon the final sale price and can therefore vary between 5.000 – XXX€. This payment will, of course, be deducted from the final purchase price. If you are purchasing a newly built Mallorca apartment, penthouse or townhouse for sale directly from a developer VAT (IVA) will be charged upon this reservation payment.
- A so-called Option to Purchase Contact will be drawn up already stating the date when the title deeds of the Mallorca property for sale are to signed in front of the Spanish Public Notary. This date will be set in mutual agreement between both parties and, depending on possible arising issues, can be prolonged once by mutual agreement of both parties. At this stage, the buyer is expected to pay at least 10% of the final sales price of the villa or country house for sale. This sum is not refundable should the buyer defer completely and back out of the sale. The vendor has equal obligation to honour this contract and in the event he/she walks away from the sale, the vendor must refund all monies received and compensate the buyer by paying an additional 10% to the purchaser. This Option to Purchase Contract is drawn up by the lawyers of both parties and, again, each party will receive a copy in their native language with the Spanish version being the one that counts.
- The Escritura Pública or the Title Deeds will be prepared at the notary’s office, the vendor’s lawyer coordinating and producing all necessary papers required to legalise the sale of the Mallorca property. The buyer’s lawyer will make sure all is going smoothly and inform with regards to the payment mode. On the big day, when the deeds are signed, all parties with lawyers congregate at the notary’s office, the notary will bear witness that all is well, legally correct and that payment of the sales price is executed correctly. Each party signs the Escritura which is solely in Spanish and the buyer will receive a so-called Copia Simple shortly after the deal has been finalised there and then. This Copia Simple is a fully legal document and serves as a substitute for the actual Escritura, which has to be stamped by various administrations. This process can take up to a few months, the buyer will be notified by his/her lawyer, who is monitoring everything, that the Escritura can be collected at the notary’s – it is basically a Copia Simple with a few additional receipts etc. but it looks quite grand as it is bound in a large, thick folder with old-fashioned writing on its cover. A bit of Mallorcan tradition has been preserved here!
With the Copia Simple and subsequently the Escritura Pública in your hands you are the proud owner of your dream Mallorca villa, town house or finca for sale and have also experienced, that buying a Mallorca property is really not a daunting issue at all with the right professionals by your side!