Sellers Beware! (Part 1)

[David]

KNOW WHAT YOU OWN! The most important commodity for any real estate business has to be the quality of property available to their clients. Not only the location & price but more than ever the legal information supplied at the time of sale.

It seems that each week there are more requirements from the Junta de Andalucía, local authorities and banks for the type of paperwork owners have to supply to complete the sale of their property. The reality for many owners is that a property that was purchased as recently as 18 months ago, may not have been correctly registered and is currently likely to have problems with this new legislation.

This was mostly due to an uncertainty over what was required by the Land Registry office and the Junta de Andalucía for the correct registration of property in the countryside. The laws were very ambiguous and therefore open to a different interpretation by everyone. Over the past 18 months this uncertainty has been removed and there are now very specific guidelines regarding the correct registration of rustic property (property in the countryside). Everyday we have owners asking us to list their property for sale believing that it is correctly registered. Unfortunately for most properties this is not the case.

A look at the most recent Nota Simple will tell you what is registered in reality. The information reflected in this document must match the property to include all outbuildings and most importantly the swimming pool. The Nota Simple is the document that the buyer’s solicitor or bank will ask for at the time of sale. Any discrepancy between what is being purchased and what is registered will create a problem. In many cases things such as swimming pools, garages and extra living space have been omitted from these documents, where this does not make the property illegal it means that the property is not properly registered and therefore is not ready for sale.

Many rustic properties were sold with building licences which enabled the construction of storage sheds. These properties were then sold as houses, many with unlicensed pools. As recently as a couple of years ago this was accepted as normal practise. With the Junta de Andalucía now taking a firmer stance on the legislation for country property, it is now impossible to sell this type of property as a house and most banks will no longer give mortgages on this type of property.

Up until the summer of 2009, it was an easy but expensive process to rectify this error using a Certificate of Antiquity (Certificado de Antigüedad) in all rustic areas. This entailed an architect measuring the area that had not been registered in the original Escritura and confirming that it was more than 4 years old. With the new plans stamped by the Spanish School of Architects, the Nota Simple could be corrected. Unfortunately for some owners who have this issue, a tightening of legislation in the Land Registry means they will be unable to use a Certificate of Antiquity to have the Nota Simple changed.

Rustic land is divided into two types: one is Normal Rustic (suelo no urbanizable) and the other is Protected Rustic (suelo no urbanizable protegido). Up until the summer of 2009 it was possible to register the extra build on both types of land. Now however, the Land Registry will no longer allow any new registrations on Protected Rustic land. This means that if you own a property on Protected Rustic land and you have an unregistered pool or extra metres built, you have no way to register them and you will find it very difficult to sell. Perhaps more importantly there is the constant risk of a substantial fine for having a swimming pool or extra meters that are not registered.

The required process to register the property correctly is using the Certificate of Antiquity. Although it seems a little unfair to have to pay to correct paperwork that should have been correct at the time of the original purchase, it will allow for the sale process to take place and allay any fear of a fine from the Junta de Andalucía.

We strongly advise anyone who currently has a property with any unregistered living space or a pool to seek legal advice as it seems that everyday a new piece of legislation arrives, stopping owners from registering their property. The simple fact is that if it is not registered properly, you can not sell and will have the constant threat of a hefty fine.

If you are in any doubt about the registration of your property, it is a simple process to obtain a new Nota Simple from your local Land Registry (Registro) or Ideal Country Property can order them on-line for you at a small cost.

[Stoffer]

On our Blog (which has this same article), we received a comment from Reg Breeze asking David to elaborate on "Substantial Fines". I thought I'd take the opportunity to post my findings here too.

The LOUA (“Ley de Ordenación Urbanística de Andalucía” or “Andalucian Urban Zoning Planning Laws”) is a body that ensures that a building project complies with the municipal and provincial laws. The fines set out in Article 184 are 10% of the property value or a minimum of 600€ a month.
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According to Article 66 of the “Law 7/1994, 18th May of the Environment”, when the amount of the fine is less than the cost of the house, then the fine will be increased to the amount by which the offender has benefited on the construction of his property.
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In the district of Mijas, according to the ARVM (“Asociación por la Regularización de Viviendas de Mijas” or the “Regulating of Homes in Mijas Association”), the amounts of the fines vary according to the size of the house between 50.000€ and 240.000€ and a percentage of the fine has to be paid every 30 days.
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[mableswift]

I never knew that we also have to take care of these things while selling a house. Now I came to know as what all details I need about my property before selling it to some other individual in order to get the perfect price of the property. I am going to sell my oceanfront condo in a shortwhile and I think these things would help me a lot in fetching a good buyer for my property.