Most of the people who buy property in Spain course the transaction through a Real Estate Agent.

Don’t make the mistake of thinking a real estate agent can replace a lawyer. While they aren’t legal experts, and they don’t say they are, out of a desire to “serve” the client they also give free legal advice or offer to have the money lodged with them. But this is not their job. Their job is to help you find a good property.

Choosing a good real estate agent is very important. Avoid the backyard real estate agent who doesn’t have the experience, expertise and ethics. For example registered real estate agents are required by the laws of their profession to check the situation of the properties they sell. They should be able to truthfully tell the buyer the strengths and weaknesses of the place. But this isn’t always done by agents who are just out to make a quick buck.

The situation is that there are some people who are selling properties and they are not registered and so they are not required to follow industry guidelines. They can’t be penalized for breaking the law. But if you go to licensed operators you are protected because they are very vigilant about adhering to a set of professional standards.

Other problems you may encounter when choosing a real estate agent is the language barrier. However you can avoid this problem by choosing a real estate agent with a good fluency in English, It is also ideal if the real estate agent has at least a working .understanding of legal terms.

You should also look for a real estate agent who genuinely cares about the clients. A real estate agent does not get paid for representing the interests of either buyer or seller. Some are only after the money and so will push a deal at all costs. A small percentage of operators can be regarded as unscrupulous and self-seeking. What happens to the buyer, or the seller, is not a concern as long as they get their fee.

All of these concerns prove one point – that it is important to choose a real estate agent who is truly professional and will give quality service. Don’t just get the real estate agent who can give you the lowest fees. It is worth paying more for a good real estate agent if it means you know he or she will really look after your interest.

Before signing anything there are some important pieces of paper you and your lawyer should have a look at:

The Referencia Catastral

Every property sale must quote the ‘Referencia Catastral’ of the property in question. The Catastro is another system of property registration in Spain, concentrating on the location, physical description and boundaries of the property. While the Property Registry focuses almost exclusively on ownership and title, the Catastro is concerned with property valuation.

These two systems do not communicate with each other, and it is common to find that the catastral description of a property differs greatly from the one in the Property Registry. It is a good idea to request the actual certificate from the Catastro with a full description of the property. The certificate is in two parts, one being a description of the property and the other being either a plan or an aerial photograph.

Community fees, statutes and minutes of the AGM

This only applies if you are buying a property in an urbanisation or where there are some ‘communal’ resources, shared amongst a number of properties. These are the fees charged by the ‘Comunidad de Propietarios’, the Community of Property Owners, a legal body that controls all the elements held in common; the lift, gardens and pool for example. Each owner is assigned a quota, or percentage of the expenses which, by law, must be paid.

The IBI receipt

Before purchasing a resale (not new) Spanish property check out the ‘lmpuesto sobre Bienes lnmuebles’, or lBI, which is the municipal property tax. Ideally, you’ll be able to see the IBI receipts for the last five years because that is the limit of liablity for unpaid back taxes and is attached to the property, not the owner. A new property bought from a developer will not have an IBI receipt (because it has never been ‘owned’) so it will be your responsibility to register the property for this tax.

Miscellaneous

If you are buying a property in an urbanisation, make sure that it is legal and registered by asking to see the approved ‘plan parcial’ at the town hall. If the property is on the beach, make sure the development is also approved by the Jefatura de Costas. For a new property, make sure that it has been declared for IBI and that the developer has made the ‘declaracion de obra nueva’. Also ensure that the escritura mentions the house you are purchasing as well as the plot of land on which it stands. As an additional safeguard, it is wise to examine the town planning maps for the area around the property, called the Plan General de Ordenacion Urbana, or PGOU.

Perhaps you own something rural in Relleu or a mansion in Madrid … Whatever the situation, there is a chance for you to earn money by letting it, as long as the price and the advertising is right. In fact, if you take the rent as a percentage of the property´s value, the cheaper place could generate more “earnings” than the more expensive one.

But letting out the apartment has its own shares of issues. So how do you avoid these problems ?

One action you can take is to be cautious about the tenant you pick. Then require a contract, for this can protect the landlord just as much as the tenant. In Spain there are two sorts of contract: an arrienda de temporada, or short-term contract; and an arrienda de vivienda or long-term contract.

The arrienda de vivienda, or long-term contract, is usually for contracts that last for a minimum of one year but the tenant has the right of extension for up to five years. So, do make sure that your contract has the heading arrienda de temporada or contrato de temporada, for these do not give the right of automatic extension.

Always concentrate on the short-term contract. This includes holiday lets lasting on the average about a week to half a year. This does not give the tenant any right of extension.

It is possible to buy both types of premade contracts quite cheaply from tobacconist shops in Spain. However, you may have to check several stores before locating any that stocks them and they will, of course, be in Spanish. You can also ask a lawyer or a licensed administration expert to draft one for you, and even give an English translation of it.

You should also make a comprehensive list of everything in the property to avoid any problems when the contract ends and she leaves the property. Technically she should leave the place as she found it and the list should guide you in making that inventory.

Another rule is that you must take a deposit for up to two months’ rent so that you can cover any debts or damages in case you get an errant tenant. If there are no problems you can return the deposit when the contract ends. You can keep the deposit or have it held by an independent agency or a regional housing department, though inform the renter where it will be kept.