Caveat Emptor – Let the Buyer beware!

At the end of 2012 the Banks went crazy and put all their houses on the market, in an attempt to offload their stock, each different offers.  Some with up to a 25% discount on the already low prices.  So it’s a buyer’s market with a lot of bargains to be had.

However, when a client approached me to carry out the conveyance for this type of property, I shudder.  Most of these of properties are repossessions and in virtually all cases have been closed for many years.  Not only have they not been maintained but they will have no electricity or water supplies.  The banks will not pay the Community charges or the rates until the date of sale.  As for the household supplies they will not pay these at all, stating that when you purchase the property the household supplies can be reconnected with a contract the new owner’s name.  This is true, as no one can hold the new owner responsible for a contract that has been made, not with the bank, but with the previous owner to them.  However, when it comes down to it the supply companies (in some cases these can be the Town Hall themselves), will do everything they can to recover the debt from the new owner, which in can sometimes run into thousands of Euros.

When it comes to investigating the debt on the house, you will find that no one will give information on the property, and everyone will state that it is in violation of the Data Protection Act, fearing what may happen if the bank finds out that they have been handing out information to third parties.  And thus we find ourselves in the situation where the property is to be purchased and you have no idea as to what is due on the property.

To ascertain if the house is legal, one document that can be required in the Town Hall is a Non Infraction Certificate or “Cedula Urbanistica”, which will at least tell us if the property is in accordance with Town Planning Regulations.  We will not be able to see any previous deeds so this Certificate and a historic Land Registry Report which will inform us of the history of the property and gives a clearer idea of any modifications that may have been made to it.

On a final note their contracts are immovable, you take them or you leave them.  Whereas when you purchase from a private seller you can negotiate the terms of the contract, the banks will not do so. In these cases you must be careful, for example should you require finance, and finally you cannot obtain this the contract should state that the bank will return your deposit, some banks will, others won’t.

Finally when purchasing a repossession you purchase as seen, the banks will make sure that in Deed it will clearly state this and you will not be able to reclaim afterwards.