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Banking

Both residents and non-residents may open Spanish bank accounts. A non-resident account works the same way as residents one. They are just subject to different regulations. If you are a resident, 25% of your interest earnings will be with held and paid to the Spanish taxman in your name. If you are a non-resident no tax will be with held, but you will be liable for tax in your own country.

Currency

If the buyer wants to pay in a foreign currency, it is simply a matter of fixing an exchange rate on the private purchase agreement. This rate is used to calculate (i) the Escritura value, which must be in pesetas, and (ii) the 5% retention if you are buying from a foreigner, which must be paid to the Hacienda in pesetas. After any other parties with an interest in the property have been paid, the buyer can pay the seller's balance in any currency the seller/buyer agree.

Bank Certified Cheques

This is the normal method of exchanging money at the Notary office, on the day of signing. A bank certified cheque is as good as cash. The bank has specially stamped the cheque, which guarantees the bank will honour it when it is issued to the recipient. Allow 2 working days for your bank to arrange the cheque. They simply require the name of the recipient and the amount. There will usually be a charge for the service.

Utility Services

You will need to arrange for the electricity/gas and telephone to be transferred to your name and we would advise you to arrange for standing order to make these payments, as utility companies in Spain do not hesitate in disconnecting your services if your payments are late. Our associate's representative will help you to make the necessary arrangements.

Medical Insurance

Many foreigners abroad prefer to take out private medical insurance rather than rely on the state system. There are various types of policy, some offered by UK companies, others by Spanish companies. When deciding the best policy for you the things to be taken into account are; if you need medical assistance will you have to pay out of your own pocket, then back from the company. If this is the case then be prepared as hospital bills can be expensive with just the room that you occupy costing around £100 per day. A visit to a doctor can cost anything from £30.00 to £50.00.

There are many companies who give clients a credit type card or a cheque book that should they get sick they take these to the doctors, who then claim back from the company. The best way to find a good insurance policy is by asking people who are already resident, they will always have a tale of good and bad experiences.
Pensions

Pensioners can arrange to have their pensions paid by the British Government in euro cheques directly to their Spanish bank account. Banks are not allowed to charge a commission on pensions; this is against European Union banking regulations.

UK pensioners taking up residence in Spain will also be entitled to receive free medical treatment under the same conditions as qualified Spanish pensioners. To establish this entitlement the pensioners must obtain a form E121 from the office of DHSS in the UK. With this form you should register with a local INSS (Institute Nacional de Seguridad Social) office that will assign you to an out-patients clinic (ambulatorio) and INSALUD doctor.

Moving your belongings

When you come to Spain to take up residence you are allowed to import your personal effects and possessions free of customs duty. You don't have to purchase a property in order to qualify, but you do have to take out an official residencia. The selection of a removal company is extremely important, always make sure that the one you choose is familiar with the paper work, and have experienced agents at the borders and customs departments, who know how to keep your goods from being kept in a custom shed for three months, which can often happens, if the paperwork is not in order.

WHAT CAN GO WRONG!

For many people, once the decision to buy a property has been made, their thinking switches to what they can avoid doing as opposed to that which must be done. The reasons usually concern trying to save money but often the reverse is the case.

Cutting out the lawyer can save a few hundred pounds and many will say that he should be on the grounds that he doesn't do anything. If he does his job correctly, which is what you need, he has little to do but what he does is vital. If he becomes involved in hours of complicated work on your behalf, something is probably wrong.

If you buy a property in Spain you need the services of a competent, experienced Spanish lawyer who knows the area well and if you are buying a new property - knows the builder from whom you are buying it. Don't flit from one company to another - no point exists in doing so. They all have access to the same property and all are bound by builder's prices.

Can anything go wrong?

Any and everything can go wrong and sometimes does, although most of the problems are concerned with not reading contracts and argument over what was to be included and what wasn't. In many cases the property salesmen are not at fault. Some people just won't listen, preferring to believe what they want as opposed to what they should.

Many people arrive in Spain with preconceived ideas as to what buying property involves, find this is not the case and then remove themselves from any further thinking or effort by leaving everything to the estate agent or property company. A year later when their property is ready to be handed over they start complaining that this is not what they wanted. It probably isn't - the problem being they didn't tell anyone at the appropriate time.

Moving salesmen sells and having sold moves on . . .

It has to be acknowledged that there are some selling properties that have no interest in the work apart from the money it can create in the short term. If they don't intend to be working for their company in the not too distant future, little reason exists for placing barriers such as the truth in the way of sales. Such people may and have, made all sorts of promises that don't appear in writing. Examples are assurances that adjoining land earmarked for building will not be built on, delivery dates which border on the ludicrous, additions and extras at no charge to the buyer which don't materialise, air conditioning installed as standard and many other things calculated to cause you to buy.

No Blarney

There are many other reasons for problems which affect buyers, among which are fraud on behalf of those selling property, whether they be agents, owners or people claiming to be either but are neither. Consider the following case:

The Costa del Sol has always been popular with people from the Republic of Ireland and when an Irish couple, who had been trying for some time to find a resale apartment close to the beach, found an in progress site advertising new property, they were interested.

Direct Purchase

They approached the builder directly, who was pleased to offer them a one-bedroom apartment facing the sea. There would be a deposit of 10 per cent required, followed by a further payment of 40 per cent in one month, 25 per cent in 6 months and the balance on completion and hand over of the keys. A contract was signed immediately and the deposit paid. One month later a further 40 per cent was paid and right on time so was the third payment of 25 per cent.

Their apartment was due to be finished in the December of that year and in September they visited the Costa del Sol to see how their holiday home was progressing. Not to put too fine a point on it, progress was nil. Nothing had progressed since they had last seen it. Worse, the site was closed.

Worried

Extremely worried, they decided to consult a lawyer. He knew immediately of the situation in regard to the builder and had done so at least 12 months prior to the company collapsing. Whilst he would ascertain the true situation in regard to the money they had paid, he explained that it was unlikely they would recover any of it.

The company had obtained a bank mortgage for its development but had failed to meet its repayments. As a result of this the bank had repossessed it and auctioned it off to new developers. Whilst building was about to recommence, the new builders were under no obligation whatsoever to honour any previous payments to the last company, its clients or debtors.

Spain is not the only country in the World where builders fail and in truth; the industry is probably as well regulated as any in Northern Europe. However, to go to a foreign country and attempt to purchase property unaided and without knowledge of the system or the law, can best be described as unwise? Instructing a lawyer would have obviated this dreadful loss and much heartache.

Sign Anything - It'll Be Right!

If there is one thing, which never ceases to amaze, it's how people seem prepared to sign anything, which is put before them. They will spend hours cataloguing the changes and additions they require for their new Spanish home and when presented with the contract of amendments nicely drawn up in Spanish, promptly sign it, despite being unable to read a single word apart from their name and address.

Would you be surprised to learn that many of the changes requested never come to fruition - despite the fact they have paid for? Probably not. It seems so easy when you read about the mistakes of others and are not involved. Without doubt, excitement and the achievement of becoming a second house owner or having taken the plunge and decided to move to another country do have a bearing on peoples thinking.

Another contributory factor is the rapport buyers develop with the people showing them around, tending to trust too much to them. It's your property, your money, and check to see that everything is in order! If you're not interested, why should they be? Tomorrow you'll be gone. Tomorrow's another day!

In most cases where an omission or something similar has occurred it is only a matter of a mistake. The Spanish are dreadful administrators and whilst they intend with the best will in the world to do something, quite often they don't.

Believe nothing - Check everything - Don't sign anything!

The fact that this is a business event as opposed to a social one, seems to be lost on many, who are content to surrender all responsibility for there well-being to a person or persons they have never met. In fairness many property companies deliberately do turn property buying into social events because it makes people easier to deal with in that they offer less sales resistance.

By all means, be friendly and enjoy pleasant company but remember, you are spending what is probably the second or perhaps largest amount of money that you have ever spent. If your property company is wining and dining you understand the reason for it. Your time would probably be better spent asking questions and looking at the locations you have seen during the day, at night time when their character may change enormously.

Keep this in mind. Don't sign anything you don't understand or can't read and never unless your lawyer has said it is appropriate to do so. If you are asked to do so, you're probably in the wrong hands.

I did it my way

If you read through the English press in Spain, you will find a reasonable amount of resale properties for sale. Estate agents are actually selling many marked "No Agents" but this is another story that can be dealt with elsewhere.

If you find a resale property which interests you and you decide to view it beware. The situation may unwind along the following lines: You telephone for an appointment and are invited around at 6 p.m. that evening. On time you arrive and the owner and his wife invite you in. The wife excuses herself because she has to put the children to bed and you and your wife are offered a drink. You ask how long they have been in Spain and are told several years. Life has been good, the children are doing well at school but for one reason or other it is necessary to return to the UK or whichever is the home country because of the ill health of one set of parents who are too sick to come to Spain.

You view the property, which is in excellent condition. It has a nice swimming pool and a reasonable amount of land. The price being asked for is a little more than you can afford or really want to pay so you make an offer. After a few minutes haggling, during which time you have surprised yourself at just how well you negotiate; the price is somewhere close to what you can afford.

Can't rush these things

The owner tells you that he has several more people coming to view the property so he can't make a decision yet and then shows you the Escritura, or title deeds to prove that the house is his and there are no charges on it. You explain that you only have three more days in Spain and the owner suggests you telephone him in a day when he may be able to make a decision.

You spend an anxious day then make the call and are invited to return for further discussions. You arrive are invited in, offered a drink and the owner tells you that if you raise your bid by just £1000 and can complete quickly, he'll sell to you.

Not forgetting your newly developed negotiating skills you offer him £500 more and tell him that's your limit. He says he needs to talk to his wife and disappears for a couple of minutes, returning to ask you if he agrees to sell, when can you manage the 10 per cent deposit? Well that's not a problem at all because you came prepared to buy and you have a bankers draft with you, which you can cash first thing in the morning. The owner then asks you what you know about purchasing property in Spain and you tell him only what you have read which doesn't amount to much. He suggests, that as is common in Spain, you both use the same lawyer and you can visit him tomorrow after you have been to the bank.

Loads a money!

The following day you meet at the bank. You pay him the deposit as agreed and he gives you an official receipt. Next you visit the lawyer. The owner explains that he is selling you his house and you both would like him to act. The lawyer takes details of your UK address and passport number, asks whether the property should be registered in both your name and that of your wife and the owner gives him a copy of the Escritura telling him that he will bring in all relevant documentation within the next two days or so. A few pleasantries and its over.

You exchange telephone numbers and the owner asks if you need a lift to the airport the following day although he knows you are driving a car. No thank you, you have a hire car that has to be dropped off to the airport. You return to the UK, pleased with your trip and the price you have paid for your property. You stay pleased for 14 days when you receive a telephone call from your Spanish lawyer saying that he cannot contact the vendor. Strange, you telephone him but with no more luck than your lawyer. You try for a week then the phone is answered by someone you don't recognise. You explain that you have purchased the property and are looking to speak with the owner. I am the owner, you are told, the previous people were tenants on a short-term contract . . .So what went wrong?

Everything was wrong

You were shown the title deeds that you didn't really take too much notice of and in any event you never asked for the passport or identity of the person selling the house so he could quite easily have used any name he wanted as he obviously did on this occasion.

He had children at school, he just can't disappear. Did you see the children? He also took you to his lawyer! He took you to a lawyer. Spoke to him in Spanish and the lawyer no doubt believed that you knew each other quite well. Particularly as you had parted with a considerable amount of money to him. At that time, the lawyer had no way of knowing or any reason not to believe the escritura related to property, which the "buyer" claimed to own. Clearly you would not part with money to someone you didn't know so everything was probably OK and in any event, he would soon be able to check everything out. Eventually, a proof of identity would have been necessary and that's as far as it could have gone. You made it easy.

If you know nothing - Do nothing - Take Advice

Not knowing the system, you fell into line with what you thought it was. The buyer, his wife, children, talk of school, nice house, nice people . . . Well, they've moved on and will be pulling the same trick on someone else. Eventually they will get caught but until then you have become another victim.

Never part with money be it a deposit, stage payment or even the final payment to anyone other than your lawyer unless he advises that to do so is appropriate.

If you want to find your own property all well and good. It will be hard work but there's nothing wrong with that but you will need to understand a lot of what can go wrong, if you are to avoid a lot of what can go wrong! Use professionals and take advice.

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