LEGAL
Why using a lawyer is essential when buying abroad to protect your interests
he fi rst point to make is that using a lawyer when buying abroad is arguably more important for your fi nancial protection than when purchasing at home in the UK. In most European countries, due to the role of notaries in the conveyancing process, it’s not practice for locals to employ a personal lawyer. But if you’re tempted to save on legal costs too, consider this: wherever you’re thinking of buying, when you fi rst arrive there you’ll be just another foreigner with no-one to go to for impartial advice, the legal system will be different to the one you’re used to and you probably won’t understand the language, at least on a level that enables you to translate the small print on a purchase contract. In short, you’re highly open to manipulation and making mistakes. We always recommend using an independent lawyer – so not the one your developer advises you to employ, probably at a discounted rate, or one affi liated to any other parties involved in your property transaction. Ideally the lawyer will be bi-lingual and have a good knowledge of the country’s land laws. You may opt to use a UK- based legal fi rm, which will probably have offi ces or use associates abroad, or a fi rm in the country in which you are buying. To fi nd a good one, seek recommendations from other buyers and/or contact the AIPP
T .
The fundamental role of a lawyer abroad mirrors the UK – that is to do all necessary due diligence for you, their client, ensuring you are happy your purchase contract achieves everything you expect and have agreed on, and to act as facilitator between the different parties involved in the transaction. To make things easier, when buying abroad it is common to give your legal representative power of attorney. Crucially, your lawyer’s work starts long before you come to sign any contracts. They should obtain and translate all relevant documents for you, do searches on your behalf and advise on any potential issues relating
to land law or ownership. They should also check planning licences and that the property you’re buying is legally built and free from any liens (legal claims on the property by a third party, typically a relative of the vendor) or encumbrances. They should also talk to you about inheritance law, specifi cally how your overseas property fi ts into your worldwide estate, how to minimise inheritance tax and how to ensure your property is passed to your preferred heirs. You should never sign any contracts, including a
reservation contract, without having it checked by your lawyer (even if you think you understand everything in it, it is often what is left out of a contract that causes problems further down the line). When you come to complete on the property, your lawyer should check the public title deed drawn up by the notary before you sign it and pay the outstanding balance. Usually, a ten per cent deposit will already have been paid on the signing of a purchase contract – again, overseen by your lawyer. After completing, your lawyer should oversee your compliance of tax affairs and ensure your deeds are registered at the Land Registry. Typically, fees for an overseas lawyer are 1-1.5 per cent of the purchase price, with a minimum fee. These will vary by country and could increase if unexpected representation or consultation is required.
The Role of the Notary
Notaries (notaires in France, notaios in Italy and notarios in Spain) are legal representatives of the state whose job is to oversee and rubber- stamp property transactions. While it’s the job of a notary’s office to draw up deeds, their neutral position means it is not their responsibility to indicate whether the deeds are in favour of either the vendor or the buyer.
AIPP CONSUMER GUIDE 25
SECTION 3 ESSENTIAL SERVICES
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