Given that at Perez Parras Economists & Lawyers we act as lawyers in numerous sales and purchases (sales transactions) for Spanish and foreign clients throughout Malaga and Nerja, and even in the rest of Andalusia, we were recently contacted by a person for a sales transaction of real estate villa as-is (conveyancing of a spanish villa), without the advice of a lawyer in the process of sales transaction, and that he was having great problems with the sale and purchase of the property he was trying to acquire.

Specifically, the buyer had signed a private contract of sale of a second-hand villa, and in this contract it had been agreed that he was buying the real estate villa as-is. The contract provided for the possibility of inspecting the villa prior to the signing of the public deed of sale, in order to see the state of the property and its installations. And, although in the first visit prior to the signing of the purchase contract no problems were noticed in the property, in the visit after the signing of the property purchase contract, problems of dampness in the ground floor and some cracks in the walls were observed.

Problem: the buyer now does not want to go ahead with the purchase of the villa, which is worth more than two million Euros, allowing the non-European buyer to obtain his advantageous residence permit in Spain for real estate investors (Golden Visa Spain), and wonders to what extent he is obliged to go ahead because he has signed a private purchase contract, in which it is stated that he is acquiring the property as-is.

And what does it mean to buy as-is?

The purchase and sale of real estate at a lump sum, regulated in article 1471 of the Spanish Civil Code, differs from that carried out by unit of measurement or number, in that in the latter a simple arithmetical operation gives the total price of what is sold, as opposed to the purchase as-is, in which a unit price is paid, in its entirety, for a property, which is known as a joint and lump sum price, and which is not affected by modifications in measurement. That is to say, in the sale as-is, the price is not agreed per unit of measurement, but on a flat-rate basis, so that an increase or decrease in the metres purchased will not cause a variation in the price expressed in the contract.

Our Supreme Court in the year 2000, and following a previous ruling from 1979, established that a property is sold as-is, when it is sold for what it is, regardless of its actual dimensions. Therefore, in order to determine the object sold, it is not necessary to determine its dimensions and, even if this is done, as long as the indication of the specific price per unit of measurement is missing, the law assumes that such individualisation has not had any essential value for the parties, and only constitutes a superabundance of data, which is a presumption of absolute value (lump sum value).

Buying a property as-is implies that if the number of metres varies from those specified in the contract, the purchase price will not change.

Buying a property as-is implies that if the number of metres varies from those specified in the contract, the purchase price will not change.

Do I have to go ahead with the real estate sale and purchase of a real estate villa as-is?

First of all, we must look at the provisions of Article 1471 of the Spanish Civil Code:

“In the sale of a property, made at a lump sum price (as-is) and not at the rate of a percentage per unit of measurement or number, there will be no increase or decrease of the same, even if it results in a greater or lesser size or number of those expressed in the contract”

It is therefore assumed that it was intended to buy and sell everything within the boundaries, and for an overall price.

However, it must be borne in mind that “as-is” does not include or refer to the safety or habitability conditions of the property (finishing defects, impermeability, watertightness, etc.) but is linked solely to the concept of the surface area of the property being purchased. Thus, the property is defined as a body delimited by its constructive limits (especially by its walls) and a flat-rate purchase price (lump sum price) is established, i.e. a single price, not per unit of measurement, as the price is not specified per square metre.

In this type of sale and purchase on a flat-rate basis, it is assumed that the buyer has had the opportunity to visit the property and has verified the actual surface area and has accepted both the surface area and the propoerty price agreed for the entire property.
But this is precisely the main conclusion in relation to the client’s enquiry: buying as-is means that the client has verified the actual surface area of what he is buying, but has not had to verify the other conditions of the property.

If a real estate is purchased as-is, the private purchase contract can be terminated if serious deficiencies are found in the real estate after the purchase contract has been signed.

If a real estate is purchased as-is, the private purchase contract can be terminated if serious deficiencies are found in the real estate after the purchase contract has been signed.

Conclusion

Therefore, the fact that you have purchased a property as-is does not prevent you from terminating the private purchase contract signed, for serious breach of contract, due to the existence of damp and cracks that have nothing to do with the surface area and the size of the property. And the fact is that buying a property as-is means that a single and global price is accepted for the property and, even if the final meters of the property that is acquired vary (for example because the Land Registry records a surface area with different measurements), the agreed purchase price will not vary. However, the purchase and sale of a real estate villa as-is does not have any further implications than the agreed price with regard to the surface area seen and verified by the buyer, and does not bind the buyer to any possible construction defects of the property that may be observed.

If you wish to buy a property, business premises, building or car park, or sell a property, at Perez Parras Economists and Lawyers Firm we are experts in the sale and purchase (conveyancing) of properties in Malaga, Nerja, Axarquía and Sunny Coast, with a team of lawyers and economists who will advise you to avoid surprises. Do not hesitate to contact us and ask us for a quote to accompany you in the process of buying or selling your home in Spain. 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, and we will help you and process all the taxes associated with your purchase and sale operation, optimising for example the spanish IRPF to be paid if the property comes from an inheritance, advising you until the end of your purchase, or sale of the property, including the tax return submission and any other procedure with the Administration or Land Registry. You should also know that with the purchase of your property for a value of at least 500,000 euros we can help you to process your investor residence permit (or Golden Visa Spain) for you and your family members. Likewise, if you have any difficulties after the sale or purchase of a property, do not hesitate to contact us so that we can advise you and defend you in court or out of court if necessary.