Debt on a property

[Sookie]

We have friends that came out to Spain a few weeks ago to look and purchase a property, they intended to look around the villamartin area, but have chosen GA instead after a tour by yours truly.

They put an offer on a town house, offer was accepted and then they were informed that the house has numerous debts attached to it.  The solicitor plus estate agents are trying to sort all this out to see if the house can still be sold. This has now been going on for nearly two weeks.  I was always under the impression that a house with debts in Spain will become yours if you purchase the property, so it's a no and you walk away. 

So I'm wondering if anyone can tell me any different. My friends are just about to say forget it and start looking again. But thought I'd ask on here first, to see if anyone knows any different or has had this experience.

Sian

[John H]

This may help;

Below is from Spanish Property Insight.
on buying a resale in a Community of Owners in Spain outstanding debts go against the property itself not against the former owner. On buying a resale you are liable for all the debts of the previous owner in the current year in which you are buying as well as the previous year; in other words, dating back two years. Your lawyer should request a certificate from the Community of Owners stating the property is up-to-date with the community payments and will include it in the Notary’s deed at completion. This certificate will act as your safeguard against any community claim on bad debts from the previous homeowner.

The new owner will also be held liable for unpaid utility services and local taxes. This is because these debts go against the property itself, not against the previous owner. So whoever owns the property will be held liable. Your lawyer will likewise also ensure prior to buying a resale there are none outstanding.

Other local taxes levied by the town hall where the property is located may be left outstanding by the previous owner (i.e. IBI tax and Garbage collection). These will not be lodged either at the Land Registry.

So it looks like you can buy one but you will be buying all the debts as well. Obviously, if there is a mortgage on the property, this will be shown on the land registry deeds but the above won't be.

Regards all

John


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[granalacant]

bla bla

The only real debts are the ones in the registry (mortgage, outstanding judgments etc.) - and the notary must advise you of these (you can get a nota simple for that from the land registry).

Secondly you have the charges from the comunidad. The seller must provide before the notary a certificate these have been paid.

As far as utilities are concerned, you simply take a new contract on your name. In any case hmmmm how much can outstanding water and electricity charges be against the value of a house? hmm peanuts.

Local taxes you normally at the notary get a certificate these have been paid upto xyz date.

It all boils down to having a good notary who does his work, and does not want to get liable himself ...

[Corporal Jones]

I agree with both above posts, as long as all debts are identified and documented then no problem. The property would have to be a bargain though to make all the aggravation worthwhile, and there would be problems guaranteed. In reality with all the repossessions being sold most if not all would have debts linked to them.

[Sookie]

Many thanks for all your replies. I'm going to give my friend a call and tell her all what you have said. I'm sure it will all make more sense to her as she has been told so many different things by different people that haven't even purchased a property in Spain.

The house is the same price as others on the development so not really a bargain.

I will let you know the out come.

Sian

[Gemstone]

I suppose it all dépends on what are the debts that go with it, we bought a house where the previous owner had not paid suma, basura and other bills before selling, her solicitor took these outstanding bills from the monies due to her from the sale of the house, so we had no problem.

[Blue and white stripes]

''As far as utilities are concerned, you simply take a new contract on your name. In any case hmmmm how much can outstanding water and electricity charges be against the value of a house? hmm peanuts''

The purchaser's solicitor will withhold 3% of the purchase price to cover unpaid bills, taxes etc. Although the new contracts for services are in your name the outstanding arrears transfer with the property. Our bill (in my name) was from the 4/2 - 4/4 and we completed on the 31/3. I sent it to the solicitor and she recovered the amount due to us from the previous owner's 3%.

John told an interesting story of a bloke who was offered a house for 100000e for a quick sale, cash only, no solicitors etc. only to find out the outstanding mortgage was 160000e.

[granalacant]

''As far as utilities are concerned, you simply take a new contract on your name. In any case hmmmm how much can outstanding water and electricity charges be against the value of a house? hmm peanuts''

The purchaser's solicitor will withhold 3% of the purchase price to cover unpaid bills, taxes etc. Although the new contracts for services are in your name the outstanding arrears transfer with the property. Our bill (in my name) was from the 4/2 - 4/4 and we completed on the 31/3. I sent it to the solicitor and she recovered the amount due to us from the previous owner's 3%.

John told an interesting story of a bloke who was offered a house for 100000e for a quick sale, cash only, no solicitors etc. only to find out the outstanding mortgage was 160000e.

Yeah - sounds like the man who offers you a winning ticket on a street corner for half the price   :-)
again: sales go via a notary in Spain, not via a solicitor or abogado. Retention of funds can be agreed upon, it does not figure in the law.
Any notary worth his salt can manage it perfectly.

[Sookie]

Well it seems the owners of the property accepted two offers and it was a case of who sorted out all the debt then put a deposit down first would get the house.   So my friends are planing another trip to GA to look at other property.

Does anyone know what the name of the estate agents is that is upstairs above Molly Malones.

Sian

[Calsh]

Gran Alacant Properties is in the Carabasi and Carabasi Casa's is opposite the school.
Cheers
Cal

[Alicante Holiday Villas]

I also believe Novapasa(?) is upstairs in the Carabassi centre as well

[Tony Gillam]

Novadesta and Novapasa are on the end of the block facing the school. While they are there, they are just a few steps to view my apartment at the other end of the block 

[Sookie]

Many thanks. Will pass the estate agents names on as the house they were buying was in that area.

Sian