On a daily basis we receive mortgage enquiries from folk who are looking to purchase property as well as those looking to release some of the equity locked up in their homes. Nothing unusual about that I hear you say!
But what is unusual, at least by British standards, is the quality of ownership or clean title that every home owner should have. In plain language, a lot of issues arise out of the historic inability to correctly register changes to and ownership of property which, of course, has a habit of coming back to bite you when you are looking to raise finance. The lender, via their agent, the valuer, will assess their ability to sell the property in the event of a loan or mortgage default. So, if the property that you are offering as collateral already has a legal defect, the bank will not progress matters i.e. release any funds, until this is resolved. And, as we all know, here in Spain that is not always a quick ‘fix’ and some months can pass, at best!
So, where you are looking to purchase a property, ALWAYS use a registered conveyancing solicitor. Don’t even think of saving on a few euros in legal fees when so much is at stake. The solicitor will know the pitfalls and will ensure, before you commit any funds, that title is good. That is that the escritura (deeds) and the Register correctly reflect the current ownership and the state/description of the property. Have them translate that to you for they have not seen the property you have! Some errors are silly (such as build metreage, number of buildings on the land, state and description) and so much can be avoided by asking questions.
And if you already own a property take the time to check out the paperwork, again as above. Do not assume that your solicitor, post the completion at the Notary, has correctly registered the event or any subsequent changes. Most new build or extensions need planning or building consent. Make sure that the formalities have been followed and duly registered.
Take an example. It is common for us to see an escritura where the description does not fit what the client tells us is now actual fact. The metreage of the living area is X on the deed whereas, because an extention has been built, quite legitimately I might add, the actual metreage that the valuer records is Y. Now you may think that the extra value that that adds to the property should not be an issue to a mortgage lender, but it is not their job to run any risk on sloppy paperwork. Why should they assume someone else’s (i.e. your) problem. The changes should have been registered! So if you are one of those owners with such incomplete paperwork, best you get it sorted for, if you try to raise a mortgage or wish to sell your property, you could be looking at some delays at best whilst it is finally corrected.
Do not cut corners or scrimp on legal fees when it comes to ensuring the quality of your property ownership. To do so could compromise your investment and home.
Mark Mountney is a partner in Rose Financial Services, a specialist mortgage brokerage based in the Parque Comercial, Mojacar. He is a fully qualified mortgage and financial adviser in the UK with some 10 years experience in managing his own firm. Mark was also a founder of The Association of Mortgage Advisors, the trade association for mortgage intermediaries with 13,000 members.
