Question:
We want to invest in real estate assets in Spain by buying them in public court auctions, is this possible? Could you help us? What are the basic issues that we must consider?
IN answer to your questions, we have the following observations;
Basic Information
1.There are many types of property or real estate rights auctions in Spain some of those carried out by the courts (judicial), but there are also other types carried out by the Tax Agency (Spanish tax authority) for example.
2. The judicial or court auctions of real estate assets are regulated in the Civil Procedure Law (LEC), in articles 655 and following clauses.
Who can take part in them? In principle anyone can bid at a property court auction. If you are not a Spanish national, you must obtain an NIE number and register it. The NIE is the Foreigner Identification Number, and it will be your tax identification number in Spain.
Can we help you? Yes, our office can help you, and in general any lawyer or expert in the matter who has experience in the court real estate properties auction process, because as we note below, it is important to make some checks and verifications on the property.
Basic issues to consider.
First, you must have the necessary funds available to bid. To participate in the auction, according to the article number 669 of the LEC, you must consign or deposit in the court the equivalent to 5 per cent of the court survey value of the property. If your bid is successful you must pay the balance and if you do not in the stated time period, you may lose the deposit paid.
It is essential to understand and study exactly the property, asset or right to be auctioned: that is, if it is the totality of the rights on the property, a part of it, or if it is the full domain (property right in full) or only the usufruct (the right to enjoy the use of the property).
You should also study in details the court file and essentially the court surveyor report, which will usually be part of the execution and auction process and is where you can check the most relevant aspects of the property.
It is important to make all possible checks related to the real estate property, as if it were an ordinary purchase. That is, analyse not only the registration situation of the property and its charges, but if possible, also its cadastral status, if it has an occupancy license, its urban situation according to municipal planning, etc.
If possible, it is recommended that you visit the property to see if it is occupied or not, note its appearance, check the area, etc.
In summary, it is essential to minimise the risks of a purchase of a property through a public auction, so in addition to the financial and economic part of the operation, it must be checked the legal, urban, cadastral situation of the property, for the purpose of determining whether it is a good investment or not.
If you want advice in the court auction process in Spain, contact us and we will help you.
The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.
Carlos Baos (Lawyer)
White & Baos
Tel: +34 966 426 185
E-mail: info@white-baos.com
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