So you have found your property in Mallorca, Ibiza or Menorca!
For whatever reason – be it your first purchase, a second home or a business premises, it’s absolutely essential in today’s market that you have a lawyer based in the Balearic Islands, someone who knows about the ins and outs of the local property market as well as the Spanish legal system, and how to make these elements and others all work in your favour.
Starting the purchasing process in Mallorca, Menorca or Ibiza might seem straightforward at first sight, but if you forgo the proper steps in preparing yourself for the tasks ahead, you’re leaving yourself open to errors, mistakes and misjudgments. Therefore, it’s essential to gain an overview of what to expect in the coming months and how to best overcome any challenges you might encounter during the buying process.
Central to all of this is a preliminary contract. Similar to option contracts or reservation contracts, it is an agreement between the buyer and seller laying out terms and conditions on both sides prior to the final contract. It’s a great opportunity to secure what you want as well as a chance to build familiarity and trust with the other party ahead of further engagements.
These contracts in Mallorca, Menorca and Ibiza are used so as to guarantee the prospective purchaser the right to purchase the property, and almost always come with a deposit payment from the purchaser, which, more often than not, are non-refundable as the seller will be removing their property from the market, costing them the opportunity to discover other house hunters.
Deposit payments of this nature are commonly 10% of the purchase price of the property, and are held in an escrow account, so as to ensure the funds remain unaffected until the signing of the final purchase contract and exchange of the property deed.
Generally, when such contracts are drawn up there is also a time limit agreed so as to avoid the process from dragging on indefinitely, which can waste time and money for both parties as they adhere to slow moving agreement. During this time limit, both parties have time and flexibility to carry out due diligence on aspects of the property, finances and future options
Obviously, it’s of utmost importance to make sure you do not sign anything that goes against your wishes or may compromise the agreement between both
Due to the great importance of such preliminary contracts in Mallorca, Menorca and Ibiza,we highly recommend familiarising yourself with the concept and seeking legal advice from local lawyers when and where necessary. Alternatively, you can always follow the latest news and developments from the Spanish authorities and requests for information made to the respective land registries of Mallorca, Menorca and Ibiza.
Should you require direct legal assistance in Mallorca with subjects related or unrelated to preliminary contracts, please contact our offices today.