It sometimes happens that clients see a nice property but change their mind afterwards. However, they have signed a reservation contract and paid a deposit. What can you do in case of a mis-sale? Below is an illustrative example.
A recognisable scenario
Suppose you are going to view houses in the Alicante area with a Belgian, Dutch or Spanish real estate agency. An estate agent shows you a number of interesting properties. In the end, you decide to buy a beautiful villa with garden and swimming pool. You sign the reservation contract in the estate agency and immediately transfer 2,500 euros as an initial deposit.
Once back home in Belgium, you view the reserved property on Google Maps. However, you see that several undeveloped plots of land surround your villa...You had not noticed this during the viewing. You fear the worst: what if people start building on those plots? You are convinced that possible works will prevent you from enjoying your second home for many years. What can you do about a mis-sale?
Don't panic: you are not obliged to buy
With a reservation contract, you have taken the property off the market for a certain period of time so that you can do the necessary research (or have it done). This does not mean that you are obliged to proceed with the purchase. As long as you have not signed a compromise, you are safe.
Why it is best not to sign the compromise in Spain immediately? We explain with a practical example.
However, some estate agents already compromise immediately or require you to transfer a deposit of 10% of the purchase price within a certain period. It is not advisable to sign this before you have had the property surveyed. This is because the Spanish property market is not regulated, which means anyone can become a real estate agent and the Spanish notary will not advise you on possible defects.
Read more about cowboys in the Spanish property market.
I have not signed a compromise. What about my first deposit?
The reason for an initial deposit is to assure the seller that - once in Belgium - you will not simply change your mind. If you then wish to cancel the purchase without a specific reason, it is normal to lose the first deposit.
However, you are entitled to a refund if defects are found during the legal checks. For example, lack of necessary permits is a common problem.
In addition, you can reclaim the deposit if the reason for purchase that is decisive for you is not possible. An example: you bought a Spanish property with a view to holiday rentals. If afterwards it turns out that it is not legally possible to rent out that property, you are entitled to a refund. The condition is then that you inform the estate agent in advance that it is essential for you to be able to rent out the property to tourists.
Reducing damage from mis-selling
So you would do well to disclose your reasons for buying to the estate agent and your legal counsel beforehand. Thus, clauses can be included in the reservation contract, with any suspensive or resolutory conditions. Also keep your communication with the estate agent, so that there can be no discussions about your buying motives later. If you can prove through written communication that the estate agent misinformed you, you are entitled to a refund.
