At Summons, we advise our clients on Real Estate Law. While the primary activity of a real estate lawyer is providing legal advice in the purchase and sale of property, there are multiple circumstances to consider, such as the type of property being acquired or the necessary contracts to complete the purchase process or to obtain a return on the acquired properties.
The properties subject to a sales contract can be of different natures, with the most common being residential or business premises.
At Summons, we are experts in advising our clients from the signing of the first reservation document or the deposit contract to the signing of the deed at the notary. We have experience in a multitude of situations related to the purchase and sale of property.
In addition to residential or commercial premises, a property sales contract can involve the sale of a hotel or the purchase of shopping centres, offices, warehouses, logistics centres, land, golf courses, etc. Our real estate lawyers are experts in operations involving any type of real estate asset and have extensive experience in reviewing these assets and preparing the due diligence report, the private sales contract, and the sales deed.
We also advise on the review and preparation of lease contracts (residential, with purchase option, business premises, seasonal, etc.) and real estate contracts such as architecture contracts, construction management contracts, project management contracts, etc.
The deposit contract is the private document that is usually signed by the parties prior to the sale of a property in order to document the interest of the buyer and seller in carrying out the sale.
It is important to know that the deposit contract (arras)can be of two types:
(i) Confirmatory (arras confirmatorias) : This is a commitment to purchase and its payment will be deducted from the final price. If a party does not complete the sale, it would be in breach of an obligation and the general remedies for breach of obligations of the Civil Code, including the obligation to fulfil the sale, could be applied.
(ii) Punitive (arras penitenciales): This is not a commitment to buy and sell, but rather a guarantee in the event that the sale does not take place. In the event of non-compliance, (a) if it is on the part of the buyer, he will lose the amount paid; and (b) if it is on the part of the seller, he will have to return the earnest money in duplicate. Neither party can force the other to buy or sell.
The articles of the Civil Code apply to the purchase and sale of real estate assetes. The transfer of ownership occurs with the delivery, therefore a priori it is sufficient to sign a private purchase contract with delivery of the property for the traditio to occur and for the buyer to be the owner of the property (articles 1.462, 609 and 1.095 CC).
However, the deed is recommended, among other things, because of the probative value that the private contract does not have. Furthermore, a public deed is required in order to be able to register the sale and purchase in the Land Registry and for it to be effective against third parties (Article 1.526 CC). If the property has been sold to different purchasers, the ownership will belong to the one who has registered it first.
