House sale contract in Spain

We as a real estate consulting firm know that one of the most important steps when buying a property in Spain is the signing of the purchase contract. For this reason, in this article, we explain everything you should know about the contract of sale of a property.

What is the contract of sale of a property?

The contract of sale of a property is a document in which one of the parties, in this case the seller, undertakes to give a property, in this case to the buyer, in exchange for a stipulated price.

It is a bilateral legal act of a consensual nature, where the will of both parties is required for the transaction to take place and for the property to be granted.

However, with the signing of the contract, the delivery of the property is not made, but it is agreed in good faith in order to be able to proceed with the delivery of the property.

The contract of sale of a property is made up of different clauses and requirements, which we will break down below, and it is advisable to draw it up before a lawyer in order to give it notoriety and legibility.

What should be included in the contract of sale of a property?

Personal details of the buyer and seller

As in any contract, the first thing that must appear in the document will be the identification of the individuals involved in the transaction, taking into account the full name, National Identity Document and the address where they currently reside, in this case of both the buyer and the seller.

At the same time, if a property purchase is to be made for business purposes, someone representing other persons, such as an attorney-in-fact or a company administrator, may be portrayed in the contract.

Likewise, in the case of a married couple subject to the community of property regime, although either of them can sign on behalf of the couple, it is better that both attend and sign before a notary to avoid future problems should they arise.

Verification of the title to the property

After the identification of both parties, the seller should include as much information as possible (title deeds, nota simple…) to verify and prove the legality of the title to his property, and also show that he has the capacity to carry out the transaction.

Details of the property

Inside the purchase contract, all the detailed information about the property must also appear.

In this case, it would appear:

The cadastral reference and the square metres of land, building and usable space.
The number of the registered property.
The address and exact location.
The description of the property, coinciding with that which appears in the Land Registry.
Its rental situation (if there are occupants or tenants).
Whether it is up to date with the payment of taxes such as IBI or whether there are any charges that should be reflected.
The situation and state of the property.

In order to be able to carry out this part of the contract, it is essential that the seller attaches the nota simple or a registry certificate, so that the notary can check the data such as the ownership and the state of the charges.

Sale price of the property

Of course, the sale price of the property should also be reflected in the purchase contract document.

In this case, the exact agreed amount for the purchase of the property should be stated.

In addition, the date on which the payment will be or was made and the form in which the payment will be or was made, whether with bank check, by bank transfer and the number of payments agreed, if there is more than one.

Also, in the event that there has been a deposit or reservation agreement, the payment made must be specified and recorded in that agreement.

Date of delivery

As we have already mentioned, signing and delivery are different things and therefore different days. Therefore, as the handover usually takes place after the signing of the purchase contract, another fundamental element that must appear in the document is the date of handover of the property.

Taxes and payments

All taxes and charges payable must be indicated in this section.

All the expenses associated with the purchase and sale of the property that are related to both parties will also appear, such as, for example, the deed fees, the agency fees or anything that has been agreed to be paid between buyer and seller, as well as those that there are doubts as to who is going to pay them, so that this way there is a record: such as the IBI, the community works, among others.

It is also very important that if there are encumbrances on the property, their cancellation or expiry should be reflected, otherwise they will be paid by the buyer.

The best thing to do is to act in good faith and reach a consensus between both parties so that the transaction is as fair and smooth as possible.

Penalties

To conclude the part of the contract, there is normally always a section dedicated to penalties.

Here it should be stated how each of the parties, both the buyer and the seller, can be penalized for failing to comply with any of the clauses established in the contract of sale that we have mentioned above and which will be added or modified according to each case.

The most common breaches can be that the seller does not deliver the property on the day of the date established in the contract or that the buyer does not make the payments on the days that were agreed upon.

Advice

Although the contract of sale of a property, between individuals or between buyer and agency, is not obliged to be made before an advisor, as it is a private and bilateral contract, it is advisable to carry out the whole procedure with the best possible advice.

Therefore, it is advisable that it is carried out in the presence of a lawyer, so that there is no misunderstanding between both parties and the whole operation is carried out in complete security. At the same time, during the buying and selling process, we recommend having the advice of a good real estate lawyer so that the process goes as smoothly as possible.

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