Legal Risks of Buying Property in Spain: What International Buyers Should Check Before Paying a Deposit

Most of the legal risks of buying property in Spain can be avoided if you check them before you pay a deposit, not after. The system is well regulated, but it assumes that you, or someone acting for you, will do the checking: the notary and the land registry will not do it for you. Here is what I would look at first, in the order it usually matters.

Check Who Owns the Property and What Is Registered Against It

Start with a nota simple, a short extract from the land registry. It shows the description of the property, the registered owner and any charges, such as a mortgage or a seizure. It is informative only, so it is not formal proof of what the registry holds, but it is the quickest way to find out whether the person selling is the registered owner and whether anything is registered against the property. Ask for a recent one before you pay anything, and ask for another one close to the signing.

Debts Can Stay With the Property

Community fees are the clearest example. If you buy a flat, the property itself answers for unpaid general community expenses from the part of the current year that has already passed and the three calendar years before it, even if the debt belongs to the previous owner. That is why the seller has to declare in the deed whether they are up to date and provide a certificate from the community, which the community must issue within seven days. The notary cannot authorise the deed without it unless you expressly waive it. I would not waive it. Ask for the certificate early, because an unexpected debt is a good reason to renegotiate.

Make Sure the Home Is Legal, Not Just Lived In

A property can have water, electricity and a cadastral reference and still have been built without the right licence, so do not rely on the fact that it has been lived in for years. Check the planning situation with the town hall before you commit. In Andalusia, some irregular buildings can be recognised as “asimilado a fuera de ordenación” (AFO). According to the regional government, that status allows the owner to connect basic services, carry out maintenance and register the building, but it does not make the building legal. The practical question is what you will still be able to do with it, so ask your lawyer to read the planning information before you decide.

Reservation and Deposit: Read What Happens to Your Money

Before the deed, you will usually sign a reservation or an arras contract and pay a deposit. The word “arras” can mean three different things. Penitential arras, regulated by article 1454 of the Civil Code, let either side back out: if you do, you lose the deposit, and if the seller does, they must return it doubled. Confirmatory arras are simply an advance on the price and do not let anyone walk away, and penal arras set a penalty if someone fails to complete. If the contract does not say which kind applies, the Supreme Court’s case law treats them as confirmatory, so a right to back out has to be written in clearly. Read the clause, make sure the contract returns your deposit if the bank refuses your mortgage, and agree any conditions in writing before you transfer anything. I explain the financing side in my article on a non-resident mortgage in Spain.

Buying Off-Plan: Ask for the Guarantee

If you pay a developer before the home is finished, the law requires the developer to guarantee the money you advance, either with a bank guarantee or with an insurance policy that names you as the beneficiary. The guarantee covers the amounts you pay, including taxes, plus legal interest until the planned delivery date, and the obligation starts once the building licence has been granted. The Bank of Spain explains it on its customer portal (in Spanish). Ask to see the guarantee in writing before you pay, and check the amount and who the beneficiary is. If the project stalls, do not wait indefinitely: the guarantee expires two years after the developer’s breach unless you have asked to cancel the contract and recover your money.

Buying From a Non-Resident Seller: The 3% Withholding

If the seller does not live in Spain, you, as the buyer, must withhold 3% of the agreed price and pay it to the Spanish tax office on the seller’s behalf, using form 211, within one month of the transfer. It is an advance payment of the seller’s own tax, taken from the price you would otherwise pay them, so it should not add to your costs. But the obligation is yours, so agree with your lawyer how it will be handled at the signing. The tax agency explains the process on its website (in Spanish).

Before You Pay a Deposit: A Short Checklist for Buying Property in Spain

Ask for a recent nota simple, the community debt certificate, confirmation of the property’s planning situation, the exact wording of the reservation contract and, if you are buying off-plan or from a seller who lives abroad, the guarantee or the plan for the 3% withholding. Have a lawyer review them before you commit. It costs far less to find a problem now than after you have signed.

If you are considering a property and would like an independent view before you commit, you can book a free consultation and send me the listing. I will tell you what I would check first.

This article is general information, not legal advice for your specific situation.

Myriam Boada Hernández, Buyer’s Agent and Lawyer — Come to Malaga