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Please make sure that payments are NEVER sent to the Agent (See Financial Guarantees ) Payments (Property already available)… The purchase still in all probability will entail putting down a deposit under a written purchase contract, which will have a fixed completion-date. Such deposits are usually non-returnable. Payments themselves will again be made by cash or by mortgage or a mixture of each. Financial Guarantees… It is required by Spanish law that the contractor /promoter selling a property off-plan or not totally constructed must provide the purchaser with a financial guarantee ( AVAL ). These are often referred to as “Bank Guarantees” because they have traditionally been issued by the Banks themselves, but these guarantees can equally be offered by Insurance Companies. The important thing is that they are issued in accordance with and are enforceable under Spanish Law. What is the purpose of Financial Guarantees?... The purpose of the guarantees is to protect the purchasers from the risk of losing monies sent as stage-payments during (possibly also before) the construction of their property. In other words, the guarantees pay against non-performance i.e. the property not being constructed or finished. To be “finished”, the property must have its “Habitation Certificate”. Care needs to be taken (hence the absolute need for a properly qualified lawyer) because the legislation is quite complex, but most “Avales” are fairly standard in wording – watch for cut-off dates being inserted in the guarantees, however, because they can sometimes be inserted quite arbitrarily. Are guarantees really worth anything?... YES, especially during the troubled times globally in the period 2007/8 onwards, many of such guarantees have been called upon successfully and repayments made. Proper reimbursement should be for not only the capital invested, but also for statutory interest per annum since the date of investment.		Do all contractors/promoters give guarantees?... They should! However, there are those who have refused to give guarantees – the solution for the purchaser is simple, refuse to buy with them and say you will buy elsewhere where they do provide them. There are sometimes contractors who say “We will give you a guarantee if you ask”. Firstly, that is fine if you know you should ask the question (!!), but they have a legal responsibility to provide them to the purchaser and should not be allowed to “delegate” the onus to the other party. Again, make it clear to your Spanish lawyers that you expect them to demand and obtain the guarantees on your behalf. They may well charge for this, but it is a price well-worth paying! Purchase contracts... You may think these are standard, but they are not. Your lawyer should check these for you and ensure that, not only are all clauses properly expressed, but that all necessary clauses actually appear in the contract. We as Agents, for instance, insist that a clause referring to financial guarantees appears if the property is not yet finalised. As stated above, there is a legal requirement, but having the clause inserted makes the process even more transparent. Language... The majority of contractors will produce purchase contracts in both English and Spanish. But take care because: • The translations are sometimes a little liberal and others totally inaccurate. • The contract will be written under Spanish law and is enforceable under that legislation. In the event of a dispute, the procedure will almost certainly take place under Spanish law and, if necessary, through the Spanish Courts. The contract will normally point this out. So it is essential to ensure that the Spanish wording is thoroughly checked by your Spanish lawyer. Bank Accounts… It is important to ensure that you have opened a Spanish Bank Account because at the very least you will need this for standing orders for such things as electricity, water and telephone. Conclusion of your purchase… The final process of your purchase will take place at the Notary Office. Your lawyer should be there to make sure that everything is correct and that the procedures are properly explained to you in English, for example before you sign. The remainder of the purchase price will be need to be paid at that time and also various taxes. This includes: • The remainder of the IVA (Value Added Tax) at present being 8%. • National Taxes. • Property Taxes (e.g. Transfer of Ownership).