Question:
I signed a reservation contract for a property (villa) in Javea, Alicante Province. The property is not as we expected and we want to terminate the contract, cancel it, and recover the deposit paid. Could you please confirm how that works?
Response
Thank you for your inquiry.
Unfortunately we cannot advise you legally, without reviewing the contract and without knowing what the actual problem that has arisen is, although in a general way, we can make the following comments.
First of all, if what you call reservation contract, is a contract on which you and the sellers reached an agreement on the price and the object of the contract i.e. the property to be sold, it is possible that there is a sale agreement in place, so, depending on how the contract is written, it may or may not be possible to terminate the contract for you.
It is essential when buying or selling a property, that the contracts are worded clearly way to ensure it is understood by both parties how to terminate or resolve the contract.
In the second place, it will be necessary to discover whether the reason you want to terminate the contract could be considered as acceptable due to a breach by the selling party or a legal issue sufficient to allow you to terminate the contract.
To advise you, we must know if there has been any breach of contract by the seller, in respect of any of the conditions of the sale, for example in terms of the cadastral, registry, planning situation of the property, etc.
It is essential when buying or selling a property in Spain, to state on the contract the conditions of the purchase, for example: that the property must be identified as being approved by the land registry, with an occupation license, etc. This will depend on what the parties agree.
Resolution or termination of a contract
Agreement between the parties: if you and the seller agree on the termination of the contract and the consequences of it, you must sign a resolution agreement.
If there is no agreement between the parties, in most cases a judicial resolution to the contract will be necessary, which means that the parties will need to go to the courts to declare the termination of the contract, due to a breach by one party, by mistake in the object, or for any other reason.
Sometimes clients consult us stating that the contract stated that if a certain condition was not met, it could be terminated unilaterally but even if this is the case, the contract must still be resolved through a Spanish Public notary, and sometimes through the courts.
Otherwise, if we resolved or terminated the contract directly in a unilateral way, we could and the client find themselves with serious legal consequences, because legally we could continue to linked to the contract if it has not been terminated correctly.
It is therefore essential to draft the contract stating the essential conditions of the purchase and sale and also, if there is any problem, to ensure that we resolve or terminate the contract in the correct manner, in order to avoid unpleasant legal liabilities.
If you want to buy or sell a property in Spain, or finish, cancel or terminate a contract, 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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