Since the Spanish economic crisis, Spanish house prices have been falling, and in the last two years, the Spanish economy has improved and falling house prices since 2013 have been steadily and slowly rising. By the traditional Chinese "buy up not buy down" investment ideas, many Chinese have taken the opportunity to buy their first home in Spain, or to make a "bottom-up investment". On the other hand, as a result of Spain's investment immigration policy, several Chinese entrepreneurs and investors have also joined the Spanish investment community.
Many Chinese people are saying that there are fewer and fewer good quality homes in good locations at good prices. When they can go back, they have already been "seized by others"; many local Spanish or Chinese intermediaries take advantage of the rush and the lack of legal knowledge necessary of Chinese people to buy a property in Spain, urge the buyer to pay the deposit and sign the deposit contract as soon as possible. Examples are not uncommon, and many Chinese compatriots have suffered losses of as little as a few thousand euros or as much as hundreds of thousands of euros.
In this column, we will continue to look at two cases of Chinese buying property in Spain, and I will also provide you with valuable professional legal advice.
In the past few years, there have been several cases where people have been able to get into the country with the help of an immigration agent. When she arrived in Barcelona, Ms. Zheng was interested in a high-grade villa that the intermediary arranged for her to visit. The first thing you need to know is how to make sure you're going to be able to make the right choice. In the end, Ms. Zheng signed a contract promising to pay the full amount within 30 days, according to the "rules here in Spain". After Ms. Zheng returned to China, she deposited 10% of the total price of the property, totaling 62,000 Euros, to the Spanish agent in China. As a down payment to the landlord, Ms. Zheng did not understand the procedure of international remittance. At this time, Ms. Zheng did not prepare the relevant documents in advance because she did not understand the procedure of large international remittances. The agent and the Spanish lawyer took advantage of the delay to conceal relevant information. Only a week before the contract expired, Ms. Zheng was told that a large transfer to Spain required proof of income to be submitted to the bank and proof of source of funds.
Although the last week Ms. Zheng put down her business and ran around preparing the documents, because of the relevant certification procedures, Ms. Zheng was not able to get the documents. Unable to do so within a few days, Ms. Zheng was eventually unable to remit the payment within the stipulated time. According to the terms of the contract, the deposit of 62,000 Euros was completely taken by the landlord. Ms. Zheng approached the agent, who claimed that Ms. Zheng was not able to prepare all the documents for the remittance and that they had nothing to do with her loss. At present, Ms. Zheng has appointed a lawyer in China to file a civil lawsuit against her immigration agent based on Mr. Ji's advice.
A Chinese food shop owner in Barcelona, Ms. Yan, wants to buy a few apartments for her only son while the prices are falling. After some research, she saw two properties for sale in the city's Born district, which are a shop facing the street and a home on the second floor located in the same apartment building. The owner of the house is a company, and the company's legal representative Jordi showed Yan the notary certificate of his purchase of the two properties. Ms. Yan is not very good at Spanish but still can understand the 2006 Jordi's company for 970,000 euros. The current sale price of these two properties is only 420,000 euros, which is less than half the price at the time, and Ms. Yan felt that the opportunity is rare and decided to buy it.
Who knew that on the day both parties went to the notary to sign the contract, the notary pointed out that the property could not be traded and canceled the signature. After receiving Ms. Yan's call for help, the Spanish and Chinese law firm's staff checked with the notary. The problem with the house was found to be the mortgage: when Jordi's company bought the two properties, it applied for a loan of 857,500 euros. EUR 638,616 of the loan is still outstanding. Even if Ms. Yan paid the entire €420,000 on the day of the transaction, it would still not be enough to repay the bank, so Lawyer Ji analyzed this was the reason notaries legally canceled the signature.
Mr. Jordi and Ms. Yan negotiated that otherwise, Ms. Yan would buy the property for €640,000. Otherwise, his company is heavily in debt and has negative assets. Even if Ms. Yan goes to court, he doesn't have the assets to pay her twice the deposit. Now Ms. Yan says she doesn't want to pursue the other party for paying double the deposit, either, but did not promise the other party to buy his house at 200,000 Euros above market price. Now she is only hoping the other party to at least return the 50,000 euros she paid as a deposit, but the other party is currently finding all kinds of excuses to avoid Ms. Yan. Yan doesn't yet know when she will be able to recover her 50,000 euros.
In the last two years, the number of housing disputes arising from the purchase of a property or immigrants has risen in the experience of Chinese law firms in Spain. Many buyers have been cheated and paid time and money for the lesson.
In this season, Lawyer Ji once again reminded everyone, if you want to buy property in Spain 100% assured, safe, you must improve their legal awareness, pay attention to the following:
1. Do a good legal investigation: before paying a deposit or the full price of the house, conduct investigation of the authenticity of housing information, debts, credit disputes, title investigations, house price verification, and other housing legal background. This is the only effective way to avoid future disputes or property damage.
2. Consult a professional lawyer's advice and review of the purchase contract: before signing the contract, you should 100% know and understand the content of the contract and find out the terms of the unfavorable for yourself in-time. Don't use your own experience to decide whether or not to sign a contract. Avoid trusting the interpretation of a contract by a translator, or by a translator you have brought in without any legal background. To avoid mistakenly signing a contract, which could lead to a situation where it is impossible to claim damages or enforce rights in the future.
3. Beware of "housing traps" and "problematic contracts": many intermediaries or landlords to take advantage of the shortcomings of Chinese customers poor Spanish or ignorance of Spanish law, the production of contracts have been set up in the "trap", such as: deliberately do not write the date of delivery of the house, only agreeing on the payment for buyer's breach of contract and avoiding the payment for seller's breach of contract, etc. Many customers find problems with the contract after signing but it is too late.
4. Separate home buying and lawyer immigration services: hire your independent lawyer to oversee the agent and real estate services. For example, searching for or participating in the housing search yourself and taking ownership of the selection process. Hire an independent third-party lawyer to do legal research on the property provided by the intermediary or the real estate agent before deciding whether to buy the property, to legally supervise the entire process of buying the property, and say NO to the sky-high "house price trap".
5. Recognize the formal credentials of the law firm handling the purchase and immigration: have a professional attorney evaluate your immigration credentials before making a decision.
6. Do not rush into signing a contract or paying a deposit: if you need to send money from abroad after purchasing a property, you should agree with the landlord that it is safest to set the payment period for two months or more when signing the contract.
This article is contributed by Juwai Columnist Lawyer Ji Yi Hong.