Prospective investment - Spanish Apartment

cactusworldnews

First time poster, so apologies if I have the wrong part of the forum.

I am considering helping out a young relative who has lived in Barcelona for some time. They are looking to purchase a 2 bedroom apartment in the city. I am considering giving them 25% of the purchase price.

If I was to do this and thereby have a 25% interest in the property, (1) what formalities would I need to be aware of with regards to documentation, ensuring that my name was shown etc
and (2) if anything was to happen to me, how would I ensure that this 25% interest past passed on to my next of kin etc

Alternatively is there any Website that I could pointed in the direction of with regards to this type of transaction.

thanks
CWN

kidmugsy

Do you have any familiarity with Spanish property law? Will he be getting a mortgage?

dimbo61

I love Barcelona as it is a beautiful city BUT you have no idea of the property market in spain at this moment in time.
With very high unemployment and the problems with the EURO how do you work out the value of a flat in spain.
There are good and bad areas in every city and areas where property goes up in value and places where its not safe to walk the streets at night!
Spanish property law is very different to english property law!
You need to use an english solicitor who speaks spanish and understands spanish property law.
You maybe causing huge problems for your relatives who may want the equity out of the flat in 5/10 /15 years time when the value of the flat maybe very low.
Consider this very carefully

Amber_Sunshine

Also be aware of the worst case scenario that they cannot pay the mortgage. In this event, the bank not only repossesses the flat, but the mortgage debt must be paid off in full. Unlike in the UK, the proceeds of the sale of the flat will not be used towards paying off the mortgage. Where would this leave your 25%?

cactusworldnews

kidmugsy - they have lived in Spain for approx. 5 yrs and intend to put down 20% deposit, but I guess they would have no experience of Spanish Property Law.
Thanks also to dimbo61 & Amber Sunshine.
My main issue is ensuring that I am shown as having a 25% interest in the property in law, even though I reside here in the UK, and how to be sure that this would be shown correctly in law in case anything happens further down the line.
Is there anywhere in the UK I could look to for advice
thanks............CWN

TrickyDicky101

Might I ask why you want to have exposure to the Spanish property market at a time when it is in freefall?

jamie11

What is to stop you buying the whole place in your name, then renting to the young couple and using the money to reduce the mortgage? You could then gift it to them when it's paid off.

Beware though, the Spanish rental market is very different to the UK model.

And

Might I ask why you want to have exposure to the Spanish property market at a time when it is in freefall?

That's a really pertinent question.

GDB2222

cactusworldnews wrote: »

kidmugsy - they have lived in Spain for approx. 5 yrs and intend to put down 20% deposit, but I guess they would have no experience of Spanish Property Law.
Thanks also to dimbo61 & Amber Sunshine.
My main issue is ensuring that I am shown as having a 25% interest in the property in law, even though I reside here in the UK, and how to be sure that this would be shown correctly in law in case anything happens further down the line.
Is there anywhere in the UK I could look to for advice
thanks............CWN

You'll need an English-speaking Spanish lawyer, preferably a separate one from the one dealing with the flat purchase. Even if you find a UK website that deals in general terms with Spanish property law, it won't deal with your decidedly unusual situation.

missile

In my experience it is better to employ a good Spanish lawyer (Abogado) who speaks English. Please note the legal qualifications are different, do not be tempted to save money by employing a Gestor.

To answer your question directly:
Your interest should be detailed in the title deeds (escritura). You should be present and sign when these are notarised. The property cannot be sold without your signature.

As others have said, there are risks which you may not be aware of, e.g. they could arrange loans and incur other debts on the property. Thus you would become liable for debts without your knowledge and consent.

In effect you would be gifting the relative a loan with no guarantee of repayment. Do you trust them?

C_Mababejive

Maybe a visit to Britishexpats forum would help further...?

cactusworldnews

Thanks to all of you for your replies

CWN