Property scams in Spain: 16 steps to avoid them

Your heart races, your eyes and face light up when you talk about it, it makes you want to plan a thousand things and look to the future. That's it: you have found your dream home. Wonderful!

We don't want to spoil the party, but be careful… Buying property in Spain is rarely simple. Don't race down the motorway to your purchase without looking in the mirror. You will need to look. And often! Because the road is full of obstacles, pitfalls and scams of all kinds.

But if you read this article carefully and prepare well, everything will be fine.

The first thing to keep in mind, because it will shape the rest of your project, is that YOU are responsible for all the checks on the property: its condition, its history, its status… Don't expect the notary to do it for you: the notary's role in Spain is probably not what you imagine. Their only responsibility is to make sure the sale is sound from a contractual point of view. So to avoid scams, you will have to roll up your sleeves and investigate!

Avoiding property pitfalls and scams in Spain: what should YOU do?

1. Don't buy alone, and make sure you work with a certified estate agency

Yes, the estate agent profession is only lightly regulated in Spain, and there are plenty of professional property scammers in the country. The agency you turn to must be reliable: check that it has a real office and look at its online reputation, in a word, its credibility.

2. Watch out for NIE processing times

The Foreigner Identification Number, as you probably know, is essential to buy a property in Spain. But COVID changed practices, even in property. In early 2022, an agreement between the tax authority and the notaries made it possible to buy without a NIE, using a temporary tax number instead. The authorities can issue it at a notary's request, without you being there in person. You then have 3 months after the sale to regularise your situation. One important point about the NIE: if you are married, your spouse will also need one.

3. Open a Spanish bank account

We also strongly advise you to have a Spanish bank account. It is not compulsory, but it will be useful to pay your gas and electricity suppliers, your taxes, etc., as many organisations and suppliers only accept Spanish IBANs. Best to plan for it from the start of your property adventure!

4. Secure your financing before you commit

In Spain, there is no clause letting you withdraw from the purchase if your mortgage is refused. To avoid property pitfalls and scams, be prepared and make sure your financing is in place before you start.

Avoiding property pitfalls and scams in Spain: what about THE PROPERTY?

5. Ask for the cédula de habitabilidad

Check that you are allowed to live in the property you have your eye on! “What? There are cases where you cannot live in a property that is for sale?” Yes, there are.

One document certifies that the home complies with planning rules, that it is registered with the land registry and that it has the minimum sanitary facilities. It also sums up its basic technical features. So you need to get hold of it.

This document has several names: certificado de habitabilidad, cédula de habitabilidad or licencia de habitabilidad (habitability certificate). It is issued by the town hall's Oficina de la Vivienda (Housing Office) and, once requested, is available within 30 working days. Note that this certificate is valid for 15 years (depending on the region) and can be renewed.

6. Check the condition of the property

We advise you to carry out the “physical” checks yourself or to bring an architect along. Look carefully at the windows, floors and walls, hunt for cracks, etc. Why? Because if you find a problem after the sale, you cannot take action against the previous owner.

7. Pay attention to square metres

To avoid property pitfalls and scams in Spain, make sure you don't get this wrong. In the land of Cervantes, square metres are different. People often say they are “smaller”. To put it simply, Spanish useful square metres (metros útiles) are the actual living space, unlike built square metres (metros construidos). So there are always fewer usable square metres than “built” ones. The clearest example: partition walls and common areas count in the built surface! The breakdown of the surface area is shown in the Catastro.

8. Check whether the property carries debts

Breaking news! In Spain, debts are attached to the property, not to the owner. In other words, if you don't check that the previous owner has paid everything they owe (mortgage, local taxes, community fees, works…), you will inherit their debts! That sentence alone should convince you to investigate.

So where can you find this information? In the nota simple.

9. The nota simple

To keep it “simple”, it is the property's passport, its identity card. Above all, it is one of the most important documents in your property quest. This official report from the Registro de la Propiedad (the property registry) briefly describes the property (built surface, useful surface, plot size recorded in the Catastro, features of the house declared to the Catastro) and gives you this vital information: does the property carry any debts?

10. Be there on the day of the tasación

When it is sold, the property must be valued by an approved company. This is called the tasación (the valuation). The bank uses this value to decide how much it will lend you (note that it will not lend you more than 60% of this value if you do not live in Spain). The buyer pays for this valuation, and we strongly advise you to be there on the day to guide the valuer on the market price of your property.

11. Ask for the energy performance certificate

Since 2013, you have had to ask for the energy performance certificate of the property. Nothing complicated about this document: you probably know it from home (in the UK it is the EPC). That said, you must ask for it when you start the purchase. Note that it is valid for 10 years. To get one, you can contact an approved technician or the Professional Association of Architects.

12. Ask for the community of owners' documents

You need to know what has been done and, above all, what is planned in the community of owners of the building where you plan to live or invest.

13. Ask for the ITE certificate (Building Technical Inspection)

Since 2012, for buildings over 50 years old (most buildings in cities), you also need to get the ITE. It is a technical inspection report certifying that the building complies with the rules. The owner should be able to give you this certificate.

14. Know the law!

Tourism is Spain's golden goose, so it had to be protected. In that spirit, since 2016, after many abuses and to prevent unfair competition with hotels, holiday rentals have been tightly regulated in Spain. The rules differ from one region to another: some have passed decrees, others have not. So you need to check where you will stand if you go ahead with the purchase. Remember too that licences are paid for and must be renewed.

15. Don't do anything unless you are sure… Why?

Because in Spain, before signing the arras contract, you have to pay 10% of the property price. If you withdraw, you lose this deposit, known as the arras. If the seller withdraws, they must return your 10% and compensate you by paying you another 10%. The arras contract is therefore much more binding than an accepted offer in many countries.

16. Reserve the property

The señal or reserva is a sum, usually no more than €5,000, that a future buyer can pay to reserve a property once the price has been negotiated. In return, the owner must take the property off the market and can no longer change the agreed price.

As for the whole buying process, we advise you to rely on the estate agency supporting you. The money should be handed to the agency, not to the owner.

For all these reasons, there is only one possible conclusion to this article: get support from an English-speaking agency. Alveo Search covers the whole Mediterranean coast, as well as Madrid, the Canary Islands and the Balearic Islands, and has already helped more than 200 families buy a property. So feel free to contact us.