Make sure that registered charges are to be fully discharged at completion and make provisions if you decide to carry on with the seller ´s registered mortgage. In this case,the contract should state that the existing mortgage amount will be deducted from the purchase price.
Unlike the Title Deed known as "Escritura ",which is the final purchase contract witnessed by the Spanish Notary Public at completion,the private purchase contract signed between the parties at this stage,will not offer you complete security of the transaction,as this is not produced to the Land Registry for registration. Therefore, when you sign the private contract with the seller,it is important not to pay the full purchase price agreed, instead an interim payment known as "arras "normally 10%or 20%of the purchase price is the common practice.
Basically under the terms of "arras ",the parties will be able to agree that if the buyer then fails to complete he will lose the payment made.If the Seller fails to complete then he will have to return double the amount received. Alternatively,it can be agreed that neither party will be able to pull out of the contract without the other party ´s consent,so making each other liable to complete. If one of the parties fail to complete there will be a breach of contract and the party at fault can be sued for damages.
As to the advantages and disadvantages of each type of agreement you should discuss this with your solicitor who will advise you accordingly.
4.5 Completion
Unlike in the UK,completion will normally take place at the Notary Public Office on the date agreed within the contract.The Notary Public is acting as a Government witness and takes care that the purchase deed terms and< conditions comply with Spanish formalities.
Both parties will have to prepare all the necessary paperwork and whatever is required in order to transfer and convey the legal estate in the property to the buyer. The Transfer Deed (Escritura)must be executed by all parties in the presence of the Notary Public and sets out, amongst other things,the parties involved,the agreed price,the date of completion and a full description of the property.The buyer hands over the balance of the sale price and the seller releases the keys and gives vacant possession of the property.
Powers of Attorney
Very often it will not be convenient for you to attend completion at the Spanish Notary Public Office. A practical solution is a Power of Attorney.This document authorizes the person appointed (the "Grantee ")to do whatever you (the "Grantor ")authorize eg.Sign all relevant documents for the purpose of the purchase.
Your lawyer can discuss your requirements with you and prepare the necessary document.
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