As lawyers in the Firm Pérez Parras Economists and Lawyers in Malaga and Nerja, we know well that many problems following the purchase of a property in Malaga may arise, so we  always advise our foreign and national clients as lawyers in the purchase and sale of property in Malaga, and even in other provinces of Andalusia, to ensure that they buy without risks, avoiding problems after the purchase and sale of property in Malaga, as well as the many difficulties that such a delicate operation can cause, and of a considerable volume of money, as a purchase and sale of property (buildings, houses, villas, businesses, parking spaces, etc.) can entail.

We were contacted by a client after buying a villa in Malaga without the advice of a lawyer expert in property sales and purchase in Málaga, because different problems  following the purchase of the property in Málaga had arisen, and for which he asked us for a solution. Of course, the recommendation we can make from this law firm is that, to avoid problems after the sale or purchase of a property in Málaga, the ideal is to take legal advice throughout the process of purchase of a team of expert lawyers in buying and selling property in Malaga.

What kind of problems following the purchase of a property in Malaga can arise if you do not seek the advice of expert lawyers in property purchase?

The buyer, who came to our Law Firm  in Málaga after the purchase without having been accompanied by a lawyer during the purchase procedure, said that he had bought the villa with swimming pool being aware that the swimming pool was pending registration in the Land Registry in Málaga, but he said that he did not know that it was built illegally and that it could not be registered in the Land Registry, as had become clear to him, unfortunately, after the purchase transaction. However, the seller claimed that in the earnest money contract he had agreed with the buyer of the property in Malaga a clause that released him from all responsibility. Upon review of the earnest money contract by our lawyers, the following clause was indeed included:

“Stipulation One.- Object. The buyer declares to know and accept the physical, legal, urbanistic and registry status and situation in which the property object of sale is found and which is described in the previous paragraph 1, and declares to acquire it as a certain body, releasing the Seller from any responsibility in relation to the physical, legal and/or physical situation of the said property. The owner undertakes to hand over the house in its current state”.

On the basis of that clause, the seller argued that the swimming pool was not an essential element of the sale because, if it had been, the buyer should have demanded that the earnest money contract had stipulated the retention of a part of the purchase price in respect of the cost of registering the swimming pool in the Land Registry in Málaga or even imposed in the earnest money contract a resolutive condition allowing him to undo the sale / purchase and get his money back, so that, if the seller had not accepted those conditions, the buyer could not have gone ahead with the purchase of the property in Málaga. The seller of the asset also argued that the legalisation of the swimming pool could not be understood as an essential element in the purchase-sale that would now allow the buyer of the property in Málaga to go back and obtain the money paid, as this was not expressly agreed in the earnest money contract that buyer and seller signed in Málaga, nor later in the deed of sale that they executed before a Notary Public in Málaga. The seller even added that the buyer also accepted the first clause referred to above in the earnest money contract, which released the seller in any case from any liability with respect to the swimming pool.

The seller also said that this first clause did not appear in the subsequent deed of sale of the property, but that this did not mean that this clause had been left without effect, because if the seller had wanted to leave this clause without effect in the final deed of sale, this should have been specified in the notarial deed with respect to this clause of the private purchase contract, a matter that was not specified in this way in the public deed of sale.

In short, the seller was saying that he had not committed any breach of contract with regard to the swimming pool, because although the deposit contract and the subsequent deed of sale specified that the seller would bear the costs of registering the swimming pool in the Land Registry, this condition was to be understood literally, i.e. if the swimming pool could be legalised, then the seller would bear the costs of registering the swimming pool in the Land Registry. But this did not imply that the seller was assuming or ensuring that the pool could be legalised.

There are many problems following the purchase of a property in Malaga between buyer and seller that may arise, even after the public deeds of sale have been signed. For this reason, especially the buyer should seek the advice of a lawyer specialised in sales and purchases in Málaga. At Pérez Parras Economistas y Abogados, we recommend our services to our foreign and national clients to guarantee the purchase of their properties in Malaga.

These were the problems that the buyer had encountered after the purchase of a property in Malaga: the swimming pool had been built illegally, committing an urban infraction and, therefore, it could not under any circumstances be registered in the Land Registry, as well as others that had further complicated the purchased property, and which are detailed below.

On the other hand, and once the lawyers of Pérez Parras Economists y Lawyers Firm had reviewed the earnest money contract, it was established in its first stipulation that:

“the buyer declared to know and accept the state and situation, concerning physical, legal, urban and registry aspects in which the property object of the sale is, releasing the seller from any responsibility in relation to the ‘physical, legal and / or physical situation of said property”.

Our client, who had been the purchaser in the sale and purchase transaction of asset in Málaga, while accepting that the earnest money contract contained such a clause, also insisted to us that “he took it for granted that there would be no objection from the Town Hall of the city in which the property was located (Malaga Town Hall) that he had bought in order to obtain the licence for the swimming pool, as had been repeated on numerous occasions by the seller, and that if he, as the buyer, had known the amount of problems that the irregularity of the swimming pool, for which a licence could not be obtained, would have caused him in different orders, he would not have signed the earnest money contract with the seller in any case”.

As a property buyer, is it important to have a good earnest money contract and a subsequent deed of sale that can protect you against problems after the purchase of a property in Malaga that may arise?

Furthermore, it is striking and should be taken into account that the first clause of the earnest money contract, with which the seller intended to free himself from liability, only released him from liability with regard to the physical and/or legal situation, but not with regard to the urbanistic or registry situation. In other words, the first clause stated that the buyer was also aware of the town planning and registration situation, but it did not release the seller from liability in these matters.

On the other hand, if the clause in relation to the swimming pool in the earnest money contract was carefully analysed, it could not be interpreted that the buyer knew that the swimming pool was out of order or could not be legalised, but that he only knew prior to the private earnest money contract that the seller had applied for the corresponding licence for its legalisation. In other words, the appearance conveyed by the seller, within the contractual good faith, was that the swimming pool could be legalised, since the seller had requested the licence for it when he signed the earnest money contract. The same was true of the rest of the earnest money contract, which in no sense of its wording could it be understood that any other part of the property could be out of order.

It was also important to bear in mind that both the earnest money contract and the public deed of sale indicated in its Exponendum II that:

“The selling party undertakes and obliged himself to assume any cost or type of payment resulting from the legalisation of the aforementioned swimming pool (until its registration in the Land Registry)”.

After carefully analysing the contractual situation once again, at Perez Parras Economists and Lawyers Firm we concluded that the clause contained in Exponendum II of the public deed of sale did not release the seller from all liability in the event that he could not legalise the swimming pool, if a clause releasing the seller from liability had not been agreed in the public deed of sale. And, according to the Spanish Supreme Court, in repeated rulings, it has stated that in order for the clause in the earnest money contract that releases the seller from liability to have effect in the public deed of sale, this public deed must at least make a reference to the initial act or contract (earnest money contract in this case). And this requirement was not met in this case, in which the private earnest money contract and the public deed of sale were independent contracts, without the latter making any reference to the former in any case. They were, as the Supreme Court says, mutually discordant documents, so that it must be considered in this case that what is agreed in the latter contract (public deed of sale) must replace what was agreed in the former (private earnest money contract).

Despite having the buyer of an asset in Málaga received the advice from a real estate agency when buying a property in Malaga, had the buyer received a correct legal advice for this conveyancing transaction?

On the other hand, we contacted the director of the real estate agency in Malaga, who had mediated in the purchase and sale transaction, and who could be a good witness for the buyer in court, but also for the seller. Well, the director of the real estate agency in Malaga told us that the seller did not guarantee the legalisation of the swimming pool and that he clearly did not want to assume any responsibility in this respect. This situation put the buyer, who was not accompanied by a lawyer in the purchase transaction, in a very bad position, and who was now asking for our help after having signed the public deed of sale and, therefore, having formalised the purchase of the property in Malaga.

In conclusion, we could not defend that the purchaser of the property in Malaga had bought without knowing that the swimming pool could not be legalised from an urbanistic point of view and that the seller had misled him. In this case, and as the buyer had not been assisted by a lawyer, the buyer should have made sure before purchasing the property in Malaga whether or not the swimming pool could be legalised, by consulting not only the Land Registry in Málaga or the Cadastre, but also the Málaga Town Hall itself. The purchaser of the property could also have waited until the Málaga Town Hall had finished the municipal administrative file in relation to the process of legalisation of the swimming pool, having agreed, for example, a longer period of time to sign the public deed than the one agreed in the earnest money contract. And, even to put the purchaser in a worse situation in this property purchase and sale transaction, given that he was dedicated to real estate investments, in legal proceedings it could be interpreted that he was a “professional” who should know about these matters, and not a simple consumer who was buying a home, being therefore more unprotected in terms of the legislation that would apply to him. Therefore, to try to defend in court that the buyer did not know that the swimming pool could not be legalised and thus annul the contract of purchase and sale was a complicated mission. It is because of this type of issues that, from the Law Firm Pérez Parras Economists and Lawyers, we recommend our foreign and national clients to get advice from expert lawyers in property purchase and sale in Malaga, to avoid that after signing the deeds of sale and acquisition of the new property in Malaga, this type of problems following the purchase of a property in Malaga may arise that should have been taken into account before the purchase and sale procedure (conveyancing operation in Málaga), with the help of expert lawyers in property purchase and sale in Malaga, as we have in this legal firm.

It is essential to seek the advice of expert lawyers when buying a property in Malaga, Nerja or Andalucia. Your lawyer will inspect the Land Registry and Cadastre, as well as the urbanistic state of the elements of the property, such as the swimming pool, to verify that no problems following the purchase of a property in Malaga may arise with the legalisation of elements that were not legalised before signing the public deed of sale.

Had the seller breached the contract of sale of a property in Malaga?

In the end, and unfortunately for the buyer, it could be interpreted on the basis of the earnest money contract and, in particular, the subsequent public deed of sale, that the seller of the property had not breached the agreements with the buyer of the property, but the correct legal interpretation was that the seller was simply obliged to assume the costs of legalising the swimming pool in the event that it could be legalised.

The buyer was not even in a good position to claim that an essential element of the property was missing that had not been provided to him in the purchase and sale transaction, since it was documented that the buyer had visited the property, so that he was aware that there was a swimming pool, and therefore there was no essential element missing in the purchase and sale transaction that would now allow the buyer to request in legal proceedings the termination of the purchase and sale transaction that he had already carried out. The purpose of the contract had not been frustrated, unfortunately for the buyer, by the situation of having bought a property with a swimming pool that could not be legalised, and that the buyer could have been aware of beforehand and should have made sure of this circumstance if he had been accompanied by an expert lawyer in sales and purchases of assets and properties in Malaga. As can be seen, there were many problems following the purchase of a property in Malaga that the buyer of the property was now encountering.

In this particular case, moreover, the property buyer had started the legalisation process of the swimming pool that he was selling together with the property, and showed the property buyer in Málaga the documents to start the administrative process. The buyer himself, before coming to us, had himself initiated the procedures with the Urban Planning Administration in Malaga to legalise the swimming pool, but was unsuccessful, as the relevant municipal administration refused to legalise the pool, understood as a new construction of a new building, while proceeding with the legalisation or demolition of the buildings attached to the house because they did not comply with the minimum separations with the dividing walls and, therefore, only demolition was possible.

In summary, and from the Law Firm Pérez Parras Economists and Lawyers, located in Malaga and Nerja, we always recommend to check that the main house and its annexes, including swimming pools for example, are legalised from the urbanistic point of view and registered before proceeding with the purchase and sale of a property in Malaga, because the legalisation process can be lengthy in some cases, and can also end with an administrative refusal that even requires demolition, which puts the buyer in a very bad situation if he has already concluded the purchase and sale procedure and granted a notary public deed of sale, as it happened in this case.

It is important that the buyer of a property in Malaga verifies before proceeding to formalise the purchase of the property in Malaga that the seller has legalised and registered the property and all its annexes. The process of urban legalisation of a property and its annexes can be laborious and time-consuming and can also result in the rejection of the application due to an urban infraction, which will be a serious problem for the buyer who has completed the purchase of the property. A planning infringement can lead to the demolition of a property.

What was the legal position of the buyer, in view of the problems arising after the purchase of a property in Malaga of this foreign person who did not seek the advice of an expert lawyer during the purchase process?

What the property buyer did obtain, as a result of the application for legalisation of the swimming pool, was a report from the town planning architect justifying the refusal to legalise the swimming pool. This report not only justified that the swimming pool was illegal, but also explained that other parts of the purchased property were also illegal constructions, unless demolition work was carried out on part of the building, the transfer of which was made in the public deed without the clause in the private deposit contract releasing the property seller from liability, for the reasons detailed above, being applicable. It can be clearly concluded from this report of the Municipal Town Planning Administration that part of the construction that the seller has sold to the buyer is illegal, and therefore the seller should compensate the buyer in an amount of 146,815.00 euros, as contractual civil liability, whose calculation corresponds to the difference in value between the amount paid by the buyer as price, and the amount determined by the built metres that are outside urban planning regulations, with the consequent loss of value of the property acquired.

What is clear is that it is not a good solution for a property buyer to have to go to court to claim compensation for contractual liability of the buyer, nor is it really a good solution to the problems following the purchase of a property in Malaga, with all the damages that this situation entails for any buyer of a property, the time involved in the legal process, and the consequent economic expense and loss of opportunity for the person who has made the financial investment.

Buying a property in Spain or in Malaga is not a simple process, and there are many issues to take into account to ensure that the property you are going to buy is not going to give you problems. For this reason, it is essential to seek the help of a lawyer who is an expert in the sale and purchase of properties in Málaga, buildings or real estate in general.

Summary of the legal analysis of the position of our client, who had bought a property in Malaga without the advice of an expert lawyer in property purchase and sale

Faced with this complicated situation that our client in Malaga presents us with, regarding the purchase of a property in Málaga that suffers from illegal built parts, a seller who is not willing to terminate the contract of sale of a property and return the money paid to the buyer of the property, to make the situation even more complex, the seller claims that the buyer has carried out minor works in the purchased property, so in a way he has accepted the sale with it, and neither the contractual termination at this stage, nor the compensation of any amount is appropriate. The truth is that in the legal analysis carried out in this office with regard to this purchase of a property in Malaga, the contractual termination would not be appropriate because the buyer really knew that the swimming pool was not legalised, and even so he formalised the purchase of the property in Malaga. However, the compensation for the meters of the property that the seller transferred to the buyer, which also happen to be a construction outside of the urban planning regulations, which we calculated before, would be applicable.

If you want to buy a property, business premises, building or parking, or sell a property in Malaga, and you want to avoid problems following the purchase of a property in Malaga, in the Law Firm Pérez Parras Economists and Lawyers in Málaga we are expert lawyers in the purchase and sale of properties in Malaga and Nerja, with a team of lawyers and economists bilingual English / Spanish who can advise you to avoid surprises in the purchase of your property. We have offices in the centre of Malaga and Nerja. Do not hesitate to contact us and ask us for a quote to accompany you in the process of buying or selling your property. We will prepare and review your earnest money contract after ensuring that the purchase you wish to make is viable and secure, without hidden charges of any kind, and we will help you and deal with all the taxes associated with your property purchase and sale operation in Málaga, optimising for example the IRPF to pay if the property comes from an inheritance, advising you until the end of your purchase, or sale of the property, including the tax declaration, whether you are resident or taxed as a non-resident, and any other procedure with the Administration or Land Registry. You should also know that with the purchase of your property worth at least 500,000 euros in Spain we can help you to process your Golden Visa Investor Residence Permit for you and your family members. Equally, if you have any difficulties following the sale or purchase of a property, please do not hesitate to contact us so that we can advise you and defend you in or out of court if necessary. If you are a highly qualified professional in Malaga and wish to purchase your property in Malaga, we will also advise you in every step of the purchase process, ensuring that the property you wish to buy and the investment you wish to make will not cause you any problems, protecting your interests, organising your taxes and taxation as a highly qualified professional, so that you can develop your professional career and settle your life and your future in Malaga with all the guarantees of the best legal advice.