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Buying a house is one of the most important decisions in ours lives. To make it easier, we have created tools that will help you to know about the savings of living in a house with an energy rating A, LED lights and guide you about monthly payment mortgage and outlay associated to the buying as well.
Probably you will have lots of doubts about concepts, for this reason, we also have created wikicasa, a list to explain you in an easier way all the terminology related with the real state
Is the termination or the end of a contract or business relationship before the expected expiration date.
The contract can be terminated or ended in advance for two reasons:
- Agreement between the parties: An agreement is made to terminate the contract before expiration. Either by activating a clause that indicates the procedure in the event that certain circumstances arise or if the parties cease the provision of services or goods, because it is no longer of interest to either of them.
- When one of the parties decides to take advantage of the early cancellation it is because the agreements have been missed and exceeded: I.e., the contract has been breached. Therefore, according to the signed clauses, one of the parties, unilaterally, can terminate the contract and cease to be subject to the agreement.
An apartment is a home that, generally, is smaller than a normal flat and is usually located in urban city centres. As a general rule, an apartment will have less equipment than a standard flat and it is designed to take advantage of the common areas of the building, both vertical and horizontal, so that they can be offered at a more economic price.
In real estate property classification, it is normal to come across terms such as duplex, attic, shared apartment, etc. On such a list, by value and size, an apartment is usually toward the bottom of the list, being bigger only than a “studio”, often used as an office. Knowing exactly what type of property we want is essential when trying to find it. As they are easy to maintain and due to their dimensions, apartments are ideal for the rental market, especially for single people or young students. It is true that the definition of “apartment” is not defined in absolute terms and its meaning may vary depending on the country or area that we are looking at.
Types of apartment
There are several types of apartment and they have changed over the years, as the needs of buyers and renters have changed. The division of traditional space that included a bedroom, bathroom, lounge/dining area and kitchen, have disappeared to integrate the kitchen and lounge together (open kitchen or kitchenette), to give the common spaces a bigger role and with the bathroom moved to a secondary location within the apartment. Apartments are no longer stigmatised for being “small” or “uncomfortable” flats, and they have changed from an option for people with low purchasing power to become a fashionable place for young people with medium-high purchasing power, who want independence but also want access to the best parts of a city, even if it means sacrificing some space.
Aerothermics is a technique allowing energy to be obtained from the air and with it: heating, cooling and sanitary hot water requirements can be met. This technology involves a heat pump taking advantage of the heat energy of the surrounding air, this being a renewable and clean energy source for energy consumption. The fact that aerothermal energy uses renewable energy (air and water) for the production of heating, cooling and sanitary hot water makes it one of the most recommended systems in the sector.
How does the aerothermal system work?
The operation of the aerothermal system consists basically of the heat exchange from the system and the surrounding air. The exchange occurs thanks to an aerothermal heat pump, called an outdoor unit, which absorbs and recovers the energy from the surrounding air and transfers heat to the circuit, while evaporating the refrigerant gas contained inside. In this way, the absorbed heat passes into the heating system, making it an economical heating system.
Aerothermics is used in underfloor heating systems, radiators, for the production of hot water and for the heating of swimming pools. In aerothermal systems we can distinguish between: bibloc or two-part aerothermal systems, made up of an indoor unit (hydrokit) and an outdoor unit (heat pump), and monobloc aerothermal systems, made up of a single outdoor unit.
What are the advantages of aerothermal energy?
The most prominent advantages of the aerothermal operation can be summarized as follows; - LOW SOUND LEVEL: The operation is very quiet.
- NO FUEL REQUIRED: It does not use fuel that needs to be stored or supplied.
- CLEAN OPERATION: As there is no combustion, no type of chimney or smoke outlet is needed either.
- MAINTENANCE-FREE: Maintenance is less demanding than in other systems.
- COMPLETE SYSTEM: With the same equipment, heating, hot water and cooling needs can be covered.
- RENEWABLE ENERGY: A system that respects the environment due to the use of renewable energies (air and water).
- MAXIMUM ENERGY SAVING: This system enables greater savings and maximum energy efficiency to be obtained.
What is buildability?
This is the total amount of square meters that can be built on a plot either on one or more floors.
Types of buildability
Two types can be distinguished:
- Gross or zoning buildability: if it corresponds to an area of land that in the future will undergo an urban transformation.
- Net buildability: refers to building plots, with a detailed arrangement that establishes their building conditions.
Building under construction
Defines all new construction work which has started and not yet finished that has the corresponding license and is carried out in accordance with a project endorsed by the corresponding professional association
Building Information Modelling (BIM)
Building Information Modelling (BIM) is a collaborative work methodology for the creation and management of a construction project.
The goal is to centralize all project information in a digital information model created by all its agents.
BIM represents the evolution of traditional design systems based on the plan, since it incorporates geometric (3D), time (4D), cost (5D), environmental (6D) and maintenance (7D) information.
The use of BIM goes beyond the design phases, encompassing the execution of the project and extending throughout the life cycle of the building, allowing it to be managed and reducing operating costs.
Advantages of BIM
The advantages of BIM over the traditional working method are obvious, let's briefly list some of them:
- BIM platforms automatically update the information that is edited in any part of the model. This means that if an element is modified on a drawing, it is automatically modified in sectional, elevations and 3D views, in the same way that if a feature is modified on a list, it changes automatically throughout the project. There is no possibility of human error. Information is always consistent.
- When all the agents work on a single model, there is no possibility of loss of information due to the lack of coordination between versions handled by the different professionals.
- By establishing this method of parallel tasks, all agents can propose from the beginning the options they consider most convenient for the project, directly involving the entire organization. The project is developed in real time in a coordinated way in a collaborative environment, always under the supervision of the client.
- The BIM allows necessary information to be available at all times, not only regarding design and technical, costs, but also execution times, maintenance, etc. It also enables real-time modifications that will automatically update all these parameters, increasing the degree of customization and adaptation of the project to the client's needs.
- Facility management tasks become much more efficient, having all the real information about the property on demand.
What is the basic project?
Basic Project refers to the architectural project that describes the overall conception of the building (form, functions, distribution, construction system, etc.), all represented in scaled and dimensioned drawings of floors, elevation plans and sections; computer models or mock-ups, with a descriptive report of the general characteristics of the work; and a general budget with an overall estimate of each chapter, trade or technology.
This documentation must be developed in enough detail as to obtain the relevant Building Permit and other administrative authorisations, although it will not in itself be enough to start the building work.
A bank cheque is a payment method whereby the holder of an account authorises another person to withdraw the sum written on the cheque. For the cheque to be valid it must state the sum that has to be paid to the bearer, the name of the bank where it can be exchanged for the sum and the signature of the person that issued the cheque.
What types of bank cheques are there?
The traditional cheque allows the bearer to exchange it at the bank for cash as soon as it has been handed over. But there are other equally valid types:
- Account deposit cheque: the cash is transferred directly to the bearer’s account. No cash is exchanged physically.
- Traveller’s cheque: a cheque usually issued so that it can be exchanged for cash at a bank in a foreign country. Even if the cheque is lost or stolen, the cash won’t be lost, as only the bearer/accountholder can cash it.
- Post dated cheque: the payment order is executed on a specific date at which point the issuer of the cheque must have sufficient funds to cover it.
- Guarantee cheque: the bank guarantees that the cheque issuer has sufficient funds to pay it. This is the most secure.
- Bearer cheque: in this case, there is no name stated on the cheque and the person who holds it (the “bearer”) can submit it and exchange it for cash.
When is a bank cheque used?
Cheques were traditionally used as a replacement for cash. Although credit cards and instalment payments are now much more prevalent in these kinds of transactions, cheques are still used quite often. For example, you may use a cheque if you wish to pay someone but you don’t have the necessary funds right at that moment. It can also be used to make an immediate payment when you don’t have any cash or credit/debit card on you, as it can be issued at any moment and for any sum. Traveller’s cheques have become very popular in recent years because you avoid the risk of losing the money or having it stolen but it still guarantee cash liquidity in any place where there is a bank.
It is any type of construction (new construction or rehabilitation) to be carried out on a land or a plot according to a project endorsed by the corresponding professional association
This is the part of the capital that has already been repaid since the beginning of the loan (whether a mortgage or otherwise).
Law 38/1999 on Building Planning - LOE defines the concept of work completion in article 6 as the action by which, the builder, once the building is finished, delivers the work (either totally or partially) to the developer and they accept it. For the delivery to be effective it will be essential to fill in the work completion certificate, which is a document signed by the builder and developer which indicates to the parties involved, the final cost of the execution of the work, an objective work completion statement, indicating (if necessary) the periods within which any observed defects must be corrected, and the guarantees required from the builder to ensure their liabilities. Together with the work reception certificate, a final completion certificate will be delivered signed by the project manager and by the project execution manager.
The completion certificate is the technical document that certifies the works and constructions have been executed and finished in accordance with the project and previously granted licenses. The person in charge of its preparation, drafting and approval is the project management, i.e., the architect who drafts the construction plans.
Final completion certificate requirements
- The legal and legislative framework on which the final completion certificate is based is the Urban Land use and Rehabilitation Law since it is the declaration of a new building. Article 28 of the aforementioned law establishes the necessary requirements for the granting of the completion certificate, which are the following:
- The completion certificate must be drawn up by a suitably qualified professional in the matter (depending on the type of building), i.e., an architect or chartered engineer, who certifies that the building works have been carried out according to the previously approved execution project. Generally, it is carried out by the project management who have drafted the construction project.
- The compliance with the guarantees of the constructed building which include among others the ten-year liability of the developer and the project management, the electrical services installations, water supply and other services.
- The energy efficiency certificate of the completed building. By virtue of the Resolution of April 2, 2013, of the General Directorate of Registries and Notaries, the energy efficiency certification will be mandatory for all completed new construction work, whether it is by a property developer or an individual private undertaking.
-The building records which include the general characteristics of the construction, the aspects to be taken into account for the maintenance and use of the building and the main actors who have intervened in its execution and its guarantees.
- The georeferenced graphic representation of the coordinates of the vertices of the finished building, as established by the reformed Mortgage Law and by virtue of the information from the Real Estate Tax Registry.
Why is it important to sign a Work Completion Certificate?
The work completion or reception certificate is very important, since as of the signing of this document, the warranty and repair periods established by the building planning law begin. Dates which can be seen in the quick guide to construction insurance and guarantees.
If the certificate is signed without reservation, the guarantee periods start from the date of signature. And if it is with reservations, the guarantee period begins when all the defects included in the document have been corrected and repaired.
Who has to sign the final completion?
The document must be signed by the builder and the developer, but our advice is that it should also be signed by the project management, who are the architect supervising the works, and who will have intervened in the works management and the Project Execution Manager, if there has been one during the construction of the building.
A cooperative, in property terms, is a group of people who come together to take on the costs of purchasing a home, so they can obtain the best qualities and prices possible without depending on an intermediary. In this way, instead of waiting for an independent contractor to build apartments and put them on sale so that the buyers can later pay for them, these cooperatives take on the costs of purchasing the land at their own initiative, paying for the construction and insurance, thus making savings on the margin applicable to a traditional construction firm, and obtaining a much lower final price than they would obtain on the market.
Characteristics of cooperatives
- Cooperatives must be registered with the National Cooperatives Registry, a national body that ensures they work in due form.
- The contributions must be made to a bank account that is in the name of the cooperative and they must be insured by an insurance firm or bank.
- To be a member of a cooperative, you have to contribute share capital and a series of fees for the cooperative’s daily maintenance and functions. Contributions to the share capital are always refundable, but there may be conditions involved.
- The average time it takes to develop properties through this method is usually two to three years, depending on the estimated timeframes for executing the works.
- Each of the members will have rights and obligations, and thus it is obligatory for the cooperative to deliver a copy of the bylaws and regulations to each member.
Before joining a cooperative, it is important to know the characteristics of the association, how it works and what kind of obligations and rights you will be taking on. Having all of the information on each step taken by the group is essential to control the timeframes and prices and ensure everything goes according to plan.
A Cardioprotected space is one that has semi-automatic external defibrillators that are easily accessible for first responders, to achieve defibrillation before the maximum recommended time has elapsed since the cardiac arrest has occurred.
The place where it must be installed and first responders trained is characterized as having an obvious risk of cardiac arrest, either because a very high number of users, such as in airports, train or underground stations, casinos, shopping centres, sports centres, hotels, restaurants, etc., or because people are at high risk, such as in sports activities centres or for heart patients.
What are the advantages?
In addition to increasing the chances of saving the life of a victim who has suffered a cardiac arrest, there are the following advantages:
- As these defibrillators are installed in visible areas, whether in companies or any other place, anyone can have easy access and is able to help any victim in need.
- The cardioprotected spaces, depending on the area, may have more than one defibrillator. In many cases, the lives of more than one person have been saved simply by having several.
- The cardiac arrests often appear without warning,hence the importance of always having a defibrillator on hand.
- These devices are specially designed so that the electrical discharge they produce can only be carried out only in the event of cardiac arrest.
- They do not pose any danger to the person who uses it, thanks to its simple operation.
- They include long-lasting batteries and tests are carried out on a daily basis, thus, its availability is guaranteed should it need to be used.
What is credit scoring?
This refers to analysis of information about a loan applicant through an automated application, thus helping the bank employee to make decisions about whether to approve or deny a loan.
What information is credit scoring based on?
We can distinguish two main information blocks:
- Internal information available to the credit entity: customer's personal data, financial obligations, internal credit history, declarations of assets from previous loans and information from external files.
- Documents the applicant is required to provide: income and documentary accreditation, justification of the purpose of the mortgage, information on personal wealth, registration documents and appraisal of the asset to be mortgaged, and documentation that justifies any poor credit history, if applicable.
The main aims of credit scoring are to:
- Standardise credit approval and refusal responses.
- Comply with the protocol and study risks of a credit.
- Process many credit requests quickly.
What types of credit scoring are there?
There are several types of credit scores: for consumption, mortgages or businesses, where the common denominator is a study of the likelihood of a transaction for a specific amount and for a particular customer, purpose and term leading to problems or to default. If this likelihood is lower than the limit set by the bank, the operation will be viable and will be given the green light.
The Spanish Civil Code contemplates the possibility of choosing between three marital property systems: that of separation of property, that of community property and that of participation.
What is community property?
Community property are those assets that belong to the community, to the members of the marriage, and where article 1347 of the Civil Code states that they are considered to be as follows:
1.- Those obtained by the work or industry of either spouse.
2.- The fruits, income or interests produced by both private and community assets.
3.- Those acquired in exchange for a consideration at the expense of the common wealth, whether the acquisition is made for the community, or for only one of the spouses.
4.- Those acquired by retrospective right of first refusal of a community nature, even when they were with private funds, in which case the company will be the debtor of the spouse for the amount paid.
5.- Companies and establishments founded during the life of the company by either one of the spouses at the expense of common property.
It is the spouses themselves who have to opt for one of the three modalities in the matrimonial agreements, imposing by default that of joint property in the event that the contracting parties have not chosen any (except in the case of the Community of Valencia, Balearic Islands or Catalonia)
It should be noted that the legislation allows the marriage regime chosen to be changed at any time for another as long as it occurs by agreement between the parties and the modification does not harm third parties.
Community of owners
The community of owners is an entity made up of all the dwellings and business premises owners that are members of a building, and single-family homes with common areas, which manages their rights and duties.
The participation in the decisions by each owner is expressed in a quota or coefficient assigned to the dwelling or premises, taking into account that the non-use of the service generating the expense does not provide exemption from the corresponding obligation.
Although most homeowners associations leave the legal matters of the building in the hands of a property manager, it is not mandatory, so in some cases, this responsibility is directly assumed by those living there.
All buildings, apartment blocks or single-family homes that have common areas must be governed by the Horizontal Property Law, on the one hand, and by the Owner's Association Bylaws, agreed on by all the owners, on the other.
For the operation of the community of owners, a president is appointed, among all the owners of the dwellings and premises, and whose function will be to convene the board of proprietors, represent the community in matters that affect it through judicial and extrajudicial means and carry out the agreements adopted by the board.
A construction firm is in charge of the whole process of building a house or building. Strictly speaking, the construction firm does not have to own the land or be the company that will sell the buildings once they are completed. Its role is limited exclusively to erecting the building.
What is the construction firm in charge of exactly?
The first step is drawing up the project plans, which is what the architect does. The architect usually works independently from the construction firm, but must nevertheless be in direct contact with the firm. The latter must manage the timeframes and contract, where necessary, the professionals in charge of executing the work: masons, bricklayers, plumbers, electricians, etc. Coordinating their work and the raw materials provided by the suppliers falls under the responsibility of the construction firm.
Process of building a home
- Preparation of the terrain and foundations. The terrain has to be flattened or levelled; then wooden formwork is placed to serve as a template for the foundations and holes and trenches are dug.
- Full structural work: First the structure of the floors, walls and ceilings are built (skeleton of the building). After this comes the structural plumbing, electrical systems and HVAC, as well as all the insulation.
- Beginning of external finishes: bricks, stuccos, stones or claddings. Likewise, access roads and external paths are built.
- Completion of internal details. Internal doors, baseboards, window frames. The final paint coat is applied to the walls.
- Installation of cladding for floors and counters. Completion and flattening/levelling of exteriors. Ceramic tiles, vinyl claddings or wooden floorings are installed, along with counters or tops.
- Completion of mechanical adjustments. Installation of bathroom and electrical accessories.
- Final inspection. The construction firm will take the client on a final walk through the house so that the client can inspect the characteristics and see how the different systems work.
A dwelling type whose main characteristic consists of two units connected to each other by means of an internal staircase.
Deed of sale
What is the deed of sale?
The public deed of sale is a document that grants legal certainty to the buyer and the seller when a property is transferred and registered in the property registry. In addition, it is the last necessary procedure necessary to perform when you are going to buy or sell a house.
Its main characteristics are:
- It is a voluntary document: It is not mandatory to sign the public deed of sale to buy a house, however, it is highly recommended due to the legal security it provides. In addition, it is the only document that will allow you to register the sale in the Property Registry.
- It is reliable: a public deed of sale proves and attests that both parties agree on the sale of the home and that they express their willingness to comply with what they sign.
What information does the public deed of sale of a property contain?
- The willingness of both parties to buy and sell a home.
- Taxes, debts, mortgage or other charges corresponding to the home.
- The proof of payment of the IBI (Real Estate Tax).
- Proof of payment of community charges.
- All legal aspects and tax obligations that the sale entails.
- The distribution between the different parties of the expenses corresponding to the operation.
- The settlement corresponding to the notary expenses when selling a home: tariffs, the fee number and the fees.
- The terms and conditions of payment of the property.
What is a differential switch?
A differential switch or also called a circuit breaker, is an automatic protection system that is installed in the main panel of any electrical installation downstream of the connected load and is designed to protect the installation from leakage to earth or persons from direct or indirect contact, automatically cutting off the electrical supply of the installation when a current leakage occurs.
This refers to a period of the loan, during which, only interest will be paid and no principal will be paid, in terms of total deferment on the loan, this is when neither interest nor principal is paid.
Usually, in mortgage loans, what appears is Deferred Repayment, which allows the holder the possibility of reducing the amounts they pay, since only interest is paid during that period.
This is the first contract that is usually signed when beginning a property purchase transaction. Once the buyer has found the property they want, they will sign a deposit contract, in which the future owner delivers a defined sum to the seller as guarantee for both parties that the transaction will go ahead.
Although many people do not see it this way, this earnest money or deposit contract is more important than signing the official purchase-sale deed before the notary, because the notarial deed will usually simply be a transcription of the previously signed contract.
What information must be included in the deposit contract?
Although there isn’t a single model for these types of contract, it is essential that they contain the identifying details of both parties, the sum delivered as deposit, the data contained in the Property Registry on the property, the price of the purchase/sale and the maximum timeframe for formalising the operation.
What happens if the buyer or seller does not complete the operation?
If the buyer decides to back out or does not receive the bank’s approval for the mortgage, they will lose the deposit. This is why it is essential to have a survey carried out of the property before handing over any money, to ensure that the buyer is able to obtain the mortgage. If it is the seller who withdraws from the transaction, they will have to pay the buyer double the sum delivered as deposit, according to the Civil Code. So in this case, the best advice is to be absolutely certain that you want the property.
What amount should be given as deposit?
The law does not establish a minimum amount or a specific percentage required to formalise a deposit contract. Nevertheless, in most cases, the sum is about 3,000 Euros, regardless of the price of the property that is to be purchased. This payment is considered a payment on account, and will therefore be discounted from the price if the purchase/sale transaction finally goes ahead.
Damage insurance is the policy you would contract to protect a property along with the things inside it. The cost will vary depending on what guarantees are contracted and the terms and conditions of the policy itself.
Types of damage insurance
Property damage and liability insurance covers the liability that may be incurred by the people living in the property as well as financial losses. It is also an insurance against damage to possessions, covering material objects; in other words, the insurance may cover specific and determined elements such as:
- Fire insurance: the insurance firm is obliged, within the limits established in legislation and in the policy, to cover the damage deriving from a fire affecting the insured belongings.
- Theft insurance: as with fire insurance, the insurers indemnity the contracting party for any damage caused by unlawful appropriation of the insured items by third parties.
- Water damage/flooding insurance: the policy covers damage affecting the insured belongings due to causes related to water, such as flooding.
- Multi-risk home insurance: this kind of insurance is the most comprehensive as it covers any damage caused to the home, to the belongings contained inside and the risks that could affect the owner. It includes fire, water damage, theft, pecuniary losses, general liability, legal defence, etc.
These kinds of policy are divided into “building”, “contents” and general liability. “Building” refers to the structural elements of the home, in other words, walls, electrical installations, floors, windows, storage rooms, etc. “Contents” refers to the furniture, fittings and belongings that are inside the home.
When we ask for a mortgage for our house, by law we must insure it, although we are not obliged to contract that insurance through our bank. The value of the Building that we must provide to the insurers with which we formalise our home insurance policy, will be equal to what it would cost us to rebuild it, in the event of a complete write-off.
The price of rebuilding the house is not the same as the purchase price (the latter includes the value of the land, which does not have to be taken into consideration if rebuilding). It is calculated by multiplying the number of square metres by what it would cost to rebuild each one. The sum varies depending on parameters such as:
- Whether it is an apartment or a terraced house.
- The materials used in the construction.
- The age of the building.
The Euribor is an index, a numerical value that indicates the average reference interest rate at which financial entities lend money on the European market. Every time a bank asks for money from another, they establish an interest rate, using the Euribor as a benchmark. In this way, all the banks can calculate the ‘price’ of their loans in a simpler manner, more in keeping with the current market.
Mortgages and the Euribor
People who have a variable mortgage linked to the Euribor need to take into account rises and falls in this index, as their mortgage will vary depending on its value. If the Euribor rises, the mortgage payments will as well. If on the contrary, the value of the Euribor falls, the mortgage payments will drop. For example, if you were granted a mortgage at Euribor + 1% and at the time of calculating the interest the value of the Euribor is at 2%, the total interest will be 3%. If the Euribor rises to 4%, then you will have to pay an interest rate of 5%.
These upward or downward changes can be positive or negative for people with mortgages. To avoid this uncertainty, there are fixed rate mortgages, which will not vary in accordance with the Euribor, as the interest rate paid each month is always the same. This is a good option for people who prefer something more stable, but is not necessarily more economical.
The value of the Euribor is dependent on numerous factors, such as country debt levels, economic growth, inflation, solvency of the banks and even consumer confidence. To establish the value, the rates offered by twenty-four of the main European banks for their transactions are taken as benchmarks and averaged out.
There are eight different Euribor interest rates, such as weekly, monthly or annual. The latter is especially important because it is used to calculate the rate on variable mortgage loans based on this index.
What is email marketing?
Email marketing is a direct communication tool with the user allowing messages to be sent to your email, adapting the content to different recipients to achieve the marketing objectives that we have defined.
Email Marketing Features
Although email marketing is traditionally thought of as a conversion-oriented channel, in reality this tool can fulfil many functions and adapt to a multitude of situations:
- Capture emails: to attract new customers to our brand - Newsletters or informative bulletins to keep the user in contact with the brand and communicate news (changes in policies, product launches...).
- Administrative emails: to send the user downloadable content or thank them for subscribing.
- Loyalty emails: in which we seek to generate repeat purchases.
An earnest money contract is a private document in which the buyer and seller of a property agree to reserve the transaction, handing over a sum of money as a down payment. The purpose is to contract the obligation of signing the sales contract in the future. This document will contain the details of the agreement, the total sum that will be paid, the payment method, the maximum timeframe for formalising the operation before a notary and how the costs of the sale shall be shared.
What timeframe is usually stipulated between the formalisation of the earnest money contract and the purchase/sale contract?
Generally, the maximum timeframe for formalising the purchase/sale contract is two months, which is normally more than twice the time it takes to obtain a mortgage.
Is it necessary to sign an earnest money contract to buy a property?
No. You can carry out the purchase/sale transaction by simply formalising the public deed directly. However, the earnest money contract is useful if we need a formal contract earlier, for example if we need to carry out certain procedures or use it to obtain certain financing conditions, for legalisation, registration, etc.
Is the earnest money contract legally valid?
Although this contract is private, once it is signed it must be honoured. It has full legal validity and thus a series of rights and obligations will apply to each of the parties from the moment it is signed. The seller will be obliged to transfer ownership of the property and the buyer will be obliged to pay for it. Normally, the agreement will be configured as a “double-rate cancellation” contract, meaning that either of the parties may withdraw, but only by incurring the penalty of losing money. If the buyer rescinds the contract, they will lose the down payment; if the seller does, they must pay a penalty equal to double the sum paid as down payment.
The energy classification is related to the efficiency of your property in terms of the energy consumption. This addresses the fact that certain factors, like the insulation on windows or the energy classification of the domestic appliances used in the kitchen, for example, directly influence the energy classification of your home.
On 1 June 2013, regulations came into force obliging the owners of homes to obtain the energy classification of the property before proceeding with the sale. However, many buyers do not know how to interpret this classification or how it can influence the cost of electricity, which is a very important factor that should be taken into account before making a final decision. Especially if we take into account the increasing electricity prices over the latest few years. And the fact of the matter is, even if a home has a very attractive price, it may not be so attractive when we see how quickly the costs of utilities can increase.
How do we interpret the energy classification of a house?
A house may receive an energy classification ranging from classification “A” to classification “G”; the average home is somewhere between classifications “D” and “E”. This means that if the home we want to buy has a “D” or “E” classification, the energy classification is considered “passable” or “acceptable”. Higher classifications, such as “A”, “B” and “C” mean the property consumes less energy. On the other end of the scale, we have classifications “F” and “G”, which indicate higher energy consumption.
How can I find out the cost of electricity based on the energy classification?
To give you a clearer idea of the costs of electricity of a house you want to buy, we will look at the example of a house that pays an average of 60 Euros per month for electricity, with the following classifications:
- A, B and C – you would spend less than average. Approximately 35, 45 and 54 Euros, respectively.
- D and E – you would spend the average. Approximately 60 and 66 Euros, respectively.
- F and G – you would spend more than average. Approximately 75 and 80 Euros, respectively.
If you want to calculate the energy classification of your house, you can do it using our calculator.
What is the execution project?
The execution project includes, in addition to the documentation included in the Basic Project (descriptive report of the general characteristics of the work; scaled and dimensioned drawings of floors, elevation plans and sections; and a budget with a global estimate of each chapter, trade or technology), details on the structure and facilities in the future building, and the construction elements necessary to carry out all the construction work.
Parts of the execution project
The execution project consists of:
- Foundations, structure and trades report
- Foundations and structure drawings, construction details and diagram and sizing of the facilities
- General and specific technical specifications
- State of measurements
- Budget obtained by applying unit work prices
In practice, and according to the specific circumstances of each case, these documents can be drawn up:
- Either successively, firstly by drawing up the Basic Project and then the Execution Project.
- Or jointly by drawing up a single document, which in this case would be called the Basic and Execution Project.
An ebook is a book in digital format that is offered to the user for free or for payment, usually via download.
The purpose of creating content in this format is to give the user more in-depth content on a topic of interest.
Vía Célere has been publishing guides on a range of topics since the end of 2017, with the aim of sharing knowledge of the real estate sector and related topics in our own unique way. These guides will provide all the details our customers need to know when buying a house, or other information that may be relevant to them.
We currently have a total of 6 guides available:
- Buyer's guide: where we help to give buyers a clear idea of all aspects related to purchasing a property.
- Guide to saving at home: where you will find out about the energy we consume, and which part of it is wasted. We will help you understand your bills, and the habits you should acquire if you wish to keep your home warm or cool.
- Interior design guide: certain aspects must be taken into account in order to guarantee optimal interior design in your home. The most important thing to keep in mind is the way the space will be used, in accordance with our habits, customs or needs.
- Guide to moving house successfully: organising and planning your move properly is key to avoiding feeling stressed, angry and overwhelmed.
- Guide to enjoying your home: ideas to inspire you when organising your home, new ways to have fun with children indoors, and a wide range of tips for working from home.
- CSR Guide: where we set out our commitment to employees, customers, suppliers and administrators, along with social and environmental issues
The agency expenses include all the costs incurred in processing, advising and managing a real estate sale transaction. The tasks carried out by the agency include:
- Paying the notary for signing the public deed corresponding to the transaction.
- Payment of the “Impuesto de Actos Jurídicos Documentados” (tax on Legally Documented Transactions or Stamp Duty), where applicable.
- Payment of Property Transfer Tax on second-hand homes.
- Payment of VAT if the purchased property is a new-build.
- Registration of the property.
- Other deeds and procedures deriving from the sale/purchase of the property
Is paying an agency for the procedures obligatory?
Each and every one of the procedures required to complete the sales transaction and register the property can be carried out by the new owner on their own account. There is no rule that forces them to contract these services. However, most people choose to use an agency as it is easier and saves time. ¿Cuánto cuesta tramitar una compraventa a través de una gestoría?
What is the cost of processing a sales transaction through an agency?
The market prices for these kinds of services can be freely set, which means that each individual agency can decide what they wish to charge for them. However, currently, the procedures necessary to complete the process can incur agency/management fees of between € 250 and € 550, depending on the area.
The price of this service is not connected in any way to the value of the property that is being purchased, because the procedures are identical in all cases. The differences in price result solely from how agencies choose to compete.
As a general rule, payments to agencies/managers are made in advance. During the course of the entire process, different fees and taxes have to be paid, so it is common practice to create an approximate provision of funds to cover these. The fees of the agency/manager are usually added to this provision. If the provision made is greater than the expenses finally paid out, the difference will be refunded.
What is geothermics?
Geothermic is the field of science dedicated to the study of the heat existing below the surface of the Earth. The process by which geothermal energy is extracted for later use as electrical energy is also mainly known by the same name.
Geothermal energy is a type of renewable and clean energy that takes advantage of the heat of the subsoil for HVAC, both for heating and cooling and to obtain sanitary hot water.
Unlike most renewable energy sources, geothermal does not depend on the weather, wind or radiation from the sun, but is based on the difference in temperature that exists between the interior of the earth and its surface. Therefore it is available 24 hours a day, 365 days a year.
What are the advantages of Geothermal Energy?
The main advantages of opting for geothermal energy and geothermal heat pumps are as follows:
- Quick repayment of the investment: Between 4 and 8 years.
- Energy savings of more than 50% compared to other air HVAC.
- Low maintenance cost and reduction of the contracted power - Long useful life of the installation, over 50 years.
- No noise as there are no external fans or compressors.
- No CO2 emissions into the atmosphere.
- No cooling towers, thus eliminating the risk of legionellosis.
- Flexibility in the location occupying very little space without the need for ventilation.
Home HVAC system
The air conditioning options for a home can be multiplied and combine the following possibilities:
- Air ducts or fan-coils with which hot or cold air is distributed, depending on the season, throughout the house.
- Low temperature radiators.
- Distribution of heat or cold through radiant walls, floors or ceilings.
What is Guest Blogging?
Among the many ways that exist to enrich a blog, Guest Blogging is one of the most widespread, and refers to the participation as a guest in someone else's blog.
What are the benefits of Guest Blogging?
There are several advantages for the guest blogger to writing a guest post on a blog that is not their own: from increased visibility and professional relationships, to talking about topics that are not normally covered, or generating links to the blog.
For its part, the blog gains different content, increases brand awareness, reduces costs by having external bloggers and the possibility of attracting new users.
How to make a good guest blogging strategy?
- It is essential to carefully read the blog in which we want to participate.
- Find an interesting topic to offer to the guest blogger.
- Avoid exaggerated self-promotion. It is preferable to place only one link and enrich the text than to abuse and be penalized by the search engine.
Gastos de registro
All real estate properties, including land, will be owned by someone and will have specific characteristics that will be recorded in the Property Registry. This is a type of “census” in place so that people can identify who a property belongs to, any charges, encumbrances, easements, debit memos it may have, etc. For this reason, when someone buys a property, they have to make the corresponding changes in the registry and pay the corresponding registry costs.
Is there a way of avoiding or negotiating registry costs?
No. Spanish law demands that any real estate purchase/sale be recorded in the Property Registry. For these purposes, there are legally approved basic fees that apply equally to everyone. Consequently, these are fixed costs and not negotiable in any way.
Can I follow the procedures in any Property Registry office in Spain?
No. You cannot choose the Registry with which you wish to record the property: you have to go to the corresponding one based on location. Property Registries divide territories by regions, neighbourhoods, districts or areas, meaning you can only go to the one serving the corresponding area.
How much are the registry costs?
The cost of registration varies depending on the value of the property declared in the public deed of sale, to which we have to add the accrued taxes for submission entry and the marginal notes. Nonetheless, registering a public deed of sale is cheaper that registering a mortgage. If the property purchased is a normal home, with an average market value, the price may be about half of the Notarial costs. As an example, if you purchased a home for approximately 100,000 Euros, you would have to pay about 250 Euros for registering the mortgage and about 160 Euros for registering the public deed of sale.
When do the registration costs have to be paid?
The registration costs are paid once you receive the notification that the deed for the property has already been registered and you can go to collect the public deed, which usually occurs a few weeks after the mortgage has been registered. However, if we are signing the public deed of sale at the same time as the mortgage deed, the procedure will be carried out by the real estate manager/agency and the funds should be provided in advance.
A mortgage is a contract by which a debtor provides an asset as collateral (usually a property) to whom the loan is taken out (creditor).
Characteristics of a mortgage
Usually mortgages are applied to real estate such as houses or land. However, it is also possible to generate a mortgage on personal property such as vehicles or works of art.
One of the most relevant characteristics of the mortgage is that the property that has been left as collateral remains in the possession of the debtor.
In the event of the debtor not complying with the payments of the debt, the mortgage establishes that the creditor will have the right to request the sale of the property left as collateral through a public auction (not direct sale).
Basic components of a mortgage contract
- On the one hand is the capital, which is the total amount of resources loaned to the debtor. The principal borrowed is usually less than the value of the asset left as collateral on the mortgage.
- Then there is the interest rate, which implies a charge of a percentage (fixed or variable) on the debt in favour of the loan grantee.
- The third element is the term, this indicates the time by which the borrowed money is expected to be repaid.
What types of mortgages are there?
Depending on the interest rate, mortgages can be:
- Fixed: if the interest does not vary throughout the life of the loan.
- Variable: if the interest varies at any time. In most variable rate loans, an initial term (the first year or the first six months) is established during which the interest is fixed. We have to bear in mind that, almost always, this interest for the first year is higher than that resulting from applying the variable interest that is going to be applied later, so that the first instalments -of the fixed interest period- would be higher than the later
- Mixed: when the interest rate remains fixed for an initial period greater than 1 year and then it is variable
What are the requirements when applying for a mortgage?
The main requirements that are requested when granting a mortgage loan have to do with the economic solvency of the client, although they are not the only ones.
- Having a fixed income. Financial stability is key to any mortgage grant. The bank will ask us for a payslip and our work life records in order to better understand our income flow.
- Initially contribute at least 20% of the home appraisal price. This is known as "the deposit" and is a requirement that banks ask of their customers. For this reason, it is very interesting to know the approximate appraised value of the property, since it is usually a "cut-off figure". In accordance with Royal Decree 716/2009, on the regulation of the mortgage market, a maximum limit of financing allowed for loans and credits is established, which normally means that a financial institution does not grant mortgage loans above 80% of the appraised value.
What is home automation?
Home automation is the array of technologies applied to smart home automation and control, which allows efficient management of energy use, provides safety and comfort, as well as communication between the user and the system.
The control network of the home automation system is integrated with the electrical energy network and coordinated with the rest of the networks with which it is connected: telephony, television, and information technologies, complying with the installation rules applicable to each of them.
Home automation benefits
Among the benefits of home automation, noteworthy is:
- Greater energy savings: smart management of lighting, HVAC, hot water, watering, electrical appliances, etc., making better use of natural resources, using the lowest cost hourly rates, and thus reducing the energy bill.
- Promotes accessibility
- Provides security through automatic surveillance of people, animals and goods, as well as incidents and breakdowns - Converts the dwelling into a more comfortable home through device management and household activities
The horizontal division of a residential building consists of a Public documented act stating the property is divided into independent registry properties with its own Property Tax Register and each one with a share quota depending mainly on its surface.
Once this is done, registration should be carried out in the Property Registry of each of them as independent and private property (unless it is the case of garages or storage rooms, which are registered as annexes to the corresponding private property).
Taxes on the purchase of a home
At the time of buying a home we have to take into account the taxes derived from this transaction, that although there are not many, they are very necessary:
Value Added Tax -VAT- is an indirect tax levied on consumption.
In 2020, the tax rate is 10% of the home purchase price or 21% for commercial real estate and plots of land. It is also 21% if a number of properties is exceeded and they are not bought in lots. For example, if you buy a house with two garages and a storage room, you will pay 10% of the global price. But, if you add one more garage or storage room to that lot, that property will be taxed at 21%.
It is a national tax, so it is the same in all regions, with the exception of the Canary Islands, where it is at 6.5%.
If a deposit is paid before the sale closes, it will be also subject to VAT and applied at the time of payment.
Tax on Documented Legal Acts
This tax only occurs if there is a bank mortgage for the purchase of the property. The signature before a notary public and the registration of the property in the Property Registry is taxed.
Real Estate Tax
This tax will be effective once you own the home. This is a local tax on the possession of a property, whether or not you are a resident of Spain. The tax rate varies depending on the region where it applies, and it is calculated based on the assessed value. The assessed value is the administrative value that is given to the property, based on the value of land and construction. Other good news: the assessed value is usually lower than the price of the house.
Non-Resident Income Tax. Model 210.
When it comes to knowing what taxes are paid when buying a house in Spain, non-residents must take into account the Non-Resident Income Tax. This tax, form model 210, varies depending on whether the property is rented or not.
If you plan to rent the property, and therefore, receive an income, you must declare it and pay taxes for this gain using form 210. The tax varies depending on the circumstances. In many cases, you simply pay a fee of 25% of the income from the rental of the property.
If you are not going to rent it, the tax is paid according to the value of the property (25% of 2% of the assessed value).
If you are a foreign national but resident in Spain, you will pay this tax based on the earnings obtained during the year.
Whether you are a resident or a non-resident, if you have a home in Spain you are liable for Wealth Tax. You will be liable as long as the following is true:
- The value of the property exceeds 700,000 euros and tax is payable on other wealth.
- The value of the property exceeds 2,000,000 euros, even if no tax is payable on other wealth.
- If it is the usual residence, tax is only payable if it exceeds 300,000 euros.
This tax varies according to the Autonomous Community.
What is VAT?
VAT, or value-added tax, is an indirect tax levied on consumption. It is not applied directly to taxpayers' income (as in the case of income tax), but rather is collected at the moment of the transaction for the product or service. Every time we make a purchase, we pay the price of the good plus the percentage of tax applied to its cost.
There are three VAT rates in Spain: general, reduced and super-reduced. The idea is that the more basic the need for a certain product or service, the lower the VAT applied to it.
- General rate: applied at 21%, which is the default rate used for any product or service. It affects household appliances, tobacco products, alcoholic drinks, etc.
- Reduced rate: applied at 10%, for a long list of products such as food, agricultural, forestry and livestock products, water consumption, property sales, including parking spaces and annexes, passenger and luggage transport, catering services, etc.
- Super-reduced rate: applied at just 4%, for products considered basic necessities, such as unprocessed food (bread, milk, fruit, vegetables or cheese), medicines, vehicles for the disabled, or social housing delivered by developers, including garages and annexes.
Tax on Legal Acts Documents
The TLAD (or Tax on Legal Acts Documents) consists of one of the three taxes that must be paid when a home is purchased. It acts in compliance with VAT and the Tax on Property Transfer.
The TLAD is applied to notarial, commercial and administrative documents. It is paid whenever a notarial document stating an economic amount is signed, which must then be recorded in the Registry. For this reason, it is common for it to occur in the event of house purchase and mortgages. Therefore, it represents an expense incurred for the formalization of the mortgage as a public deed.
How much does the IAJD cost?
The TLAD accounts for 70% of the mortgage constitution expenses. However, the amount depends on each of the Autonomous Communities. It is one of the taxes which are organised by local government.
Who pays the mortgage tax?
There are two scenarios depending on when the mortgage was contracted:
- On loans before November 10, 2018: the client. This was established by the Supreme Court on November 6, 2018, when it met in plenary session to clarify this point once and for all. Let us remember that, previously, the same body said that it had to be paid to the bank, although it backed down due to the "radical jurisprudential shift" that occurred after that ruling.
- In mortgages signed as of November 10, 2018: the bank. This is so due to a government decree that entered into force on that date.
What is the IBI?
The IBI is a tax that is paid annually to the local council. This is a tax that is mandatory for all property owners that have spaces such as premises, garages, houses, flats or, in general, any real property in their name.
This tax is one of the main sources of income for municipalities and, for this reason, it is possible that the value of the tax will fluctuate depending on the year in which we are, but they always move within margins set by the state, therefore, there is no absolute freedom but simply a little room for manoeuvre.
What is paid with the IBI?
With the IBI payment what you are paying is a tax that is related to owning real estate, both rural and urban, its characteristics include:
- Annual payment.
- Municipal, i.e., the money collected is kept by the municipalities.
- The owner of the property is the one who must pay this tax, provided that their name appears as the owner.
- The amount of the tax is calculated based on the assessed value of the property, i.e., the value of both the land where it is built and the building.
- The amount is also calculated based on the number of inhabitants in the municipality in question, inhabitants in Barcelona city do not pay the same tax as in a small town.
What is an infographic?
An infographic is a collection of images, graphics and simple text that summarizes a topic so that it can be easily understood.
Use of infographics Why use infographics?
Infographics are excellent to make it easier for us to process complex information. They can be very useful when:
- Providing a quick summary on a topic.
- Explaining a complex process.
- Presenting the results of an investigation or the data of a survey.
- Summarizing a long post or report.
- Comparing different options.
- Creating awareness about a cause or problem.
In short, they are visual interpretations of the texts themselves They serve to explain concepts and present data in a graphical way that is more attractive.
Ingreso a cuenta
¿Qué es el ingreso a cuenta?
El ingreso a cuenta se produce cuando existe un pago en especie entre dos sujetos. A la hora de tributar, al no haber habido ningún tipo de intercambio monetario, es necesario hacer un cálculo sobre el valor de ese pago para de este modo ingresar en la Hacienda Pública el importe correspondiente. Estas aportaciones en especie son cualquier tipo de bien diferente del dinero, ya sean muebles, inmuebles u otro tipo de bienes. Por ejemplo la cesión de una vivienda a un trabajador, la entrega de un automóvil para realizar el trabajo, ordenadores y equipos informáticos, tickets restaurante, transporte o incluso cursos de formación.
¿Cómo se calcula el ingreso a cuenta?
El importe del ingreso a cuenta viene determinado por ley. En el caso de los asalariados se calcula mediante una escala progresiva, debiendo abonar una cantidad en función de los ingresos. Para el caso de los autónomos este porcentaje es fijo y no varía, siendo siempre del 21%.
¿Por qué se realiza el ingreso a cuenta?
El objetivo principal del ingreso a cuenta es aproximar en la medida de lo posible la cuota que resultará finalmente de su Declaración de la Renta, con el fin último de reducir en la medida de lo posible la cantidad y el número de devoluciones que la Agencia Tributaria debe realizar. En muchos casos las cantidades retenidas a lo largo del año superan las que corresponderían ingresar, por lo que Hacienda tendrá que devolver la cantidad correspondiente. incluso en el caso de que el trabajador no tenga obligación de presentar la declaración de la renta (que ocurre cuando sus ingresos anuales no superan los 22.000€ al año) puede realizarla voluntariamente para conseguir la devolución en el caso de que tenga desgravaciones o deducciones.
A real estate firm is a business that acts as an intermediary between the person who is selling a property (such as an apartment, house, land or premises) and possible buyers. The agency acts as the representative of the property’s owner, the seller, the buyer or the tenant, depending on the service required by the client. In exchange for this service, the real estate firm may charge a percentage of the total sale or rent or a pre-agreed commission established by both parties. Generally, the real estate firm will not receive any payment of any kind until the sale has been completed.
These types of companies have always been necessary because of the difficulty of matching up buyers with sellers.
Advantages of real estate firms
These firms guarantee that the transaction will take place in controlled circumstances and with reliable information from both parties; they provide advice to the seller and buyer on the type of home they need, the most suitable market prices, or what they should consider before carrying out the transaction.
The responsibilities of an estate agent are not limited exclusively to negotiating a sale or purchase price, but go much further, such as finding possible buyers, attracting clients, creating marketing strategies to improve sales or organising visits.
The internet has caused a revolution in the property market in Spain. Traditional estate agents have given way to new exchanges, which work online alongside physical offices. However, it is important to distinguish between real estate firms and a simple website on which information is exchanged. On the latter, the user will post an advert so that they can be contacted by possible buyers, but their services go no further than simply creating the contact.
A real estate agent, whether working physically or online, will always provide additional services (such as showing the property to the buyers) and therefore it is important to know the difference and know which option is more suitable. It is very common for buyers and sellers to carry out the sale or purchase directly, but the role of real estate agents is still fundamental, not only because of the assistance they offer when carrying out the transaction, but because of their services and advice.
Integrated project delivery (IPD)
This is a project management approach that integrates people, systems, companies and practices in a process that collaboratively harnesses the talents and points of view of all participants to optimize project results, increase owner value, reduce waste and maximize efficiency through all phases of design, manufacture and construction
What is the Homeowners' Meeting?
The Homeowners' Meeting is the governing body of the Homeowners' Association. It is made up of all homeowners, who pass resolutions by unanimity or majority agreements.
There are two types of Homeowners' Meetings:
- Ordinary Meetings: compulsory annual meetings in which the accounts and budgets must be passed, with the option to deal with any other issues of interest to homeowners.
- Extraordinary Meetings: all additional meetings deemed necessary, with no obligation to convene them every year. They may be called by the President, or at the request of a quarter of homeowners (regardless of their property ownership ratio) or of a number of homeowners representing at least 25% of the property ownership ratios.
What powers does the Homeowners' Meeting have?
- Make and revoke appointments, and process issues raised by homeowners
- Approve the Homeowners' Association's expenditure and revenue plan and accounts
- Compulsory work: all work necessary to suitably maintain and conserve the building and its communal facilities and services, along with all reasonable work necessary to update the building and guarantee universal accessibility
- Approve and amend the Bylaws and Rules of Procedure
- Matters of general interest
What are the minutes of the meeting?
Full details of all Homeowners' Meetings must be set out in minutes drafted by the estate managers, to be signed off by the President and Secretary of the Homeowners' Association. This ensures there is a record of the meeting should any issues subsequently appear.
Last Planner System (LPS)
What is the Last Planner System (LPS)?
This is a planning method carried out by those in charge of production on site, modifying the scheduling and supervision process while reducing uncertainty and variability, based on the Lean Construction philosophy.
Features of the Last Planner System (LPS)
The LPS has two main features that distinguish it from other planning models:
-Firstly, planning is a collaborative process which is carried out through negotiation between all agents involved in the process, meaning the workers who are to perform the tasks are those who undertake to complete them. The person in charge therefore has all the information necessary to carry out his or her work throughout the different phases.
-Another fundamental feature of the Last Planner System is that it is carried out in reverse order to the "pull session", which starts with an overview of the finished work and then considers what is needed to reach completion. This provides a clearer, more realistic complete overview of the project's critical path.
It is a methodology based on implementing continuous improvement and encouraging communication between all agents involved in a project. The benefits of its implementation include, most notably, commitment, coordination and transparency.
The Urban Development Act (LOE), commonly known as the Construction Law, which has been in force in Spain since 1999, is the law that regulates the spheres of application and the competences and obligations of the agents involved in the construction project of a permanent building, whether public or private. This law serves to protect the buyer’s rights if after a certain period of time constructional defects appear in the purchased property. A case may be brought before the courts to determine whether there are parties liable for those defects and thus offer a solution to the purchaser if the judge finds in the purchaser’s favour.
What is the warranty period for constructional defects?
The are three warranty periods established for each type of constructional defect in the Construction Law:
- 1 year: for defects affecting finishes, such as flooring and tiling.
- 3 years: for defects related to habitability, such as humidity.
- 10 years: for structural defects, such as cracks caused by bad foundations.
These timeframes begin from the date of the Deed corresponding to Handover of the Works by the developer or, in its absence, the Final Works Certificate or First Occupancy License File issued by the Council in the municipality. If a defect does appear, it is not obligatory to file the suit during the warranty period, but it is necessary to be able to prove that the defect appeared during that period, by obtaining a notarial certificate with photographic evidence and a Technical Opinion issued by a surveyor/appraiser/expert.
What is the timeframe for filing a claim for a constructional defect?
Once a constructional defect has appeared and we have pre-established evidence of the defect, we have two years to file a claim or suit and demand that the seller offer us a solution to the problem. Otherwise, we lose the right to do so. However, it should be remembered that each particular case will have its particularities, which is why it is always advisable to consult with a specialised lawyer who can tell us how best to proceed.
Horizontal Property Act
What is the Horizontal Property Act?
The Horizontal Property Act is the law that regulates Homeowners' Associations, establishing, for example, their governing bodies and functions, the tasks to be carried out by estate managers, homeowners' rights and duties, or the number of homeowners necessary to pass a resolution at a meeting.
Horizontal division of a property
The most difficult concept to define is the horizontal division of a property, which deals with the compartmentalisation of a block of properties, establishing sub-properties within a larger property. This immaterial concept of horizontal division refers to the division of a property in order to define commercial units, apartments and communal areas within it, as well as the property ownership ratio for each space.
The First Occupancy License is an administrative deed issued by the local council of the area where the property is located accrediting that the works have been duly completed and are in keeping with the issued works license; that it fulfils the requirements established in the urban planning project or works license and those established for a property that will be used as a residence; that it fulfils the technical health and safety conditions and public habitability and decorative requirements; and that it can be connected to the different utility services and supplies. This document is essential when registering the deed for a completed new-build, to ensure that any buyer will be protected in case of any problems that may arise afterwards.
The certificate of occupancy and First Occupancy License are complementary to each other, given that the first certifies that the property fulfils the health and safety, hygiene and minimum equipment requirements.
What happens if you buy a home without a First Occupancy License?
On several occasions, jurisprudence has established that homes built without a license can obtain them provided the following requirements are met:
- Expiry of the period for re-establishing or reinstating the legality of the works. This means that the License can be obtained once the period established in the regulations of the corresponding Autonomous Community, from the completion of the works, has elapsed; this period is usually between 4 and 6 years.
- That the way in which the property will be used and as planned is permissible under the regulations.
- That the technical health and safety conditions are fulfilled. This also means accrediting the fact that the building is safe for its occupants.
What action can I take if I am not given the First Occupancy License?
If you do not receive the license, the utility companies cannot offer their services to the property and the property cannot be sold or registered. This is a clear mechanism designed to protect consumers to ensure they can live in or sell the properties that do not fulfil the minimum requirements. Furthermore, if you have purchased a property that does not have the First Occupancy License, you have the right to annul the purchase/sale contract and receive an indemnity for damage and loss. Consequently, apart from receiving a refund equivalent to the cost of the property, you will also receive the transaction costs, including any mortgage interest, notarial costs, management/agency fees, Registry taxes, etc.
A works license is a permit that the council issues that will authorise works such as reconditioning, improvement, construction, refurbishment or repurposing works. The license is obligatory when carrying out any kind of work that modifies the structure of a building.
When is it necessary to apply for a works license?
When carrying out a refurbishment inside a house that does not affect any external elements, common elements or elements protected for national heritage reasons, a works license is not required. If the works affect or may affect the structure of the building (demolishment or replacement of a load-bearing wall or pillar), then it is necessary to apply for a works license.
There are three types of administrative procedure for requesting a license:
- Prior notification: these are for actions that will have a very limited urban and environmental impact, and which are not technically difficult. An example might be the construction of a shed on your property.
- Simplified procedure: if the action does not require a technical project and the effects will be limited, it may be sufficient to follow this simplified procedure, which consists of getting a signed statement from a technician certifying that the installation or refurbishment fulfils the applicable regulations. Obtaining this license may take one month, sometimes more.
- Ordinary procedures: this is for works that require a technical and detailed study and project to ensure it fulfils the regulations; in these cases, you must apply for the license using the ordinary procedure.
What documentation is necessary when applying for a works license?
The procedure will vary depending on the council, but they are usually the same and comprise four stages:
- Submission of an Official application form, duly filled-in and sealed, to the Council.
- Documentation of the natural or legal person that will be in charge of works management/supervision.
- Itemised budget and technical details (where applicable) of the works, including VAT, signed by the contractor or builder.
- Receipt proving payment of the corresponding taxes.
In most cases, it isn’t necessary to process any license whatsoever, but it is important to be aware of the characteristics of the property and its surroundings before beginning the works.
One of the characteristics of new build homes is that the developer will have obtained a works license so that they can then sell the homes. This is not the case with second-hand properties and in fact, this is one of the problems with second-hand homes: what happens if you buy a house in which refurbishments have been made without the corresponding works licenses?
The answer is simple and, unfortunately, also unfair: the new owner has to legalise the works performed by asking the Council to issue the license that was not issued at the appropriate time, along with the “Approved Technical Project” (which is not really a project, because the works have already been performed), drawn up and signed by an architect.
Use and maintenance guide
What is the use and maintenance guide?
This is the document that includes the specifications for correct use of the element or elements resulting from the work (building, commercial unit, construction element, development work, etc.), along with all maintenance operations and regular reviews necessary for conservation.
All use (precautions, requirements and prohibitions) and maintenance (to be carried out by the user or specialised personnel, or frequency of maintenance operations) must be specified for each construction element or facility.
This document is part of the Building Book, which must be made available to all homeowners. It must also be updated over the course of the building's working life, adding any incidents that may arise, as well as any inspections and repairs carried out.
What is a mock-up?
This is a scaled replica of an object, which can be used to forecast the end result or to study the project from all angles.
Mock-ups can be used to check elements such as the functionality and appearance of a certain product.
This term is applied in many fields, such as architecture, engineering, industrial design, graphic design, music, the arms and naval industry, etc.
The building specifications report is considered one of the main instruments that serve as a guarantee to people who are buying a home that has not yet been built. The act of buying a house based only on the plans can carry certain risks, as we won’t know what the final result of the works will be.
For this reason, the law obliges the seller to deliver a free copy of the building specifications report, which must contain a description of all the materials that will be used in the construction. If any modifications are made, they must be notified to the owner of the house. This includes the thermal and acoustic insulation of the building and common areas.
The objective is to ensure that the buyer has all the details and information required on the house they are going to purchase and that it is delivered in good condition and with all the guarantees, in terms of both the visible finishes and in terms of possible latent defects that we may encounter from day to day.
It is important to read the report very carefully, especially the matters related to the building’s structure. The decoration or distribution of the house may be modified, but the structure of the building and its characteristics cannot.
It is not uncommon to find homes that are supposedly luxury homes that have excellent visual finishes but hide deficient executions of the structural elements. The insulation, waterproofing, the roof and covering and façade systems, the carpentry, the ducts of the utilities and the type of concrete used are factors that need to be taken into account, very carefully, before buying an off-plan property.
When buying a house, it is normal to ask how many square metres it has in total. This is one of the most important factors that influence the decision to buy or not. There is no “ideal size” for a home, as it will depend to a large extent on the buyer’s preferences, the number of people who will live in it and the distribution of the home itself. However, it is true that most people start from a minimum number of built-up metres that they want as a requirement before they will move.
What is the difference between built-up metres and useful metres?
It is common to make mistakes when making these calculations. One of the most frequent is to confuse the built-up metres with the useful metres. The built-up metres account for the space that is inside the perimeter of the home, including partitions, walls, pillars and false ceilings/surfaces. If the walls are shared with a neighbour, the perimeter is measured from half the wall and usually the partitions, galleries and ventilation ducts are also taken into account. On the other hand, the useful metres only count from the space inside the house, including the wardrobes/cupboards.
Do common elements and external areas count in the built-up metres?
If it is specified that the built-up metres include common areas then the common areas are included, but not if the built-up metres are stated alone. The built-up metres including common areas will be the surface recorded in the cadastre. This is why it is normal for the useful surface, or simply the built-up surface in buildings and residential complexes to be very different from the value recorded in the cadastre. This is because the concept includes the corridors and common areas proportionally for each house. The terraces and covered balconies are calculated at half their size, unless the balcony is closed off on three of its four sides, in which case it is calculated at its total size.
What about car parks and storage rooms?
The square metres of the car parks and storage rooms should not be included in the home’s built-up metres, because, as occurs with the balconies, the dimensions of these spaces, in which one cannot “live” as such, can end up inflating the amount of metres of the property artificially.
The useful metres of a house are those that can be put to a real use, which usually coincide with the space that can be walked on. They include the interior parts of the home (including wardrobes). To find out the exact value it is necessary to measure these areas very thoroughly or ask an architect for help.
When it comes to valuing the size of a house, it is important to know what scale is being used, given that the number of square metres varies and these figures have a significant effect on the final price of the purchase, the taxes that have to be paid and even the owners’ association fees.
Difference between useful metres and built-up metres.
These data are different and the value is practically never the same: normally the useful metres are less than the built-up metres. The built-up metres include all the elements that are within the home’s perimeter including partition walls, ventilation ducts or the installations required for their use. The useful metres are those that can be put to real use, in other words, those that match the entire surface on which you can walk. This measurement is very important when it comes to calculating whether the space that we are buying will really be able to satisfy our needs. It is important to remember the built-up metres in common areas are those including the corridors and the rest of the spaces that form the communal premises and that are used by all residents.
Which types of metre are used to calculate the value of a house?
When an appraisal or survey is made, it is usually based on the built-up metres including the common areas, not the useful metres or just the built-up metres. To have a faithful reference of the square metres in a determined area, this scale is always used because if they are calculated by, for example, only taking into account the useful metres, the measurement cannot be compared with other properties and we won’t be able to obtain a relevant estimate of the real price.
What elements are included in the useful metres?
Normally only 50% of balconies is included within the useful metres, unless the balcony is closed on three of its four sides, in which case 100% is included.
The storage rooms and car park areas are not included in useful metres.
The surface of the built-in wardrobes and cupboards is included in useful metres, but not the space occupied by walls, partitions, pillars or false ceilings/surfaces, etc.
This is the document which establishes the part of the outstanding loan (between parties or to third parties) for each one of the properties when several are mortgaged at the same time as a guarantee of a single loan (joinability of action), or when the mortgaged property is divided into two or more parts, or some part is segregated from it (joinability thereafter).
The land registry report is a document issued by the Property Registry that includes reliable information on the details of a property, its location, the details of the owners, and any possible encumbrances and charges associated to the property. Thanks to this report, anyone interested in purchasing a property can obtain true information on the property for legal purposes. The most common reason to ask for this report is to know about any possible encumbrances on the property, find out about the solvency of the owner or obtain specific details in respect of any court cases or inheritances, which may correspond to each owner. However, the bylaws of the association are not obligatory.
What details do I need to ask for the land registry report?
This information is public and any natural or legal person can ask for it. What should be remembered is that it is a purely informational document and not an official certification. Consequently, although the request for a land registry report can be processed with only the property’s address, it may be rejected. For this reason, it is important to provide as many details as possible on the property, such as National ID Document number and full name and surnames of the owner, the number in the Property Registry or the Registered Property Unique Identifier (IDUFIR).
Why is it important to request the land registry report?
It is very important to have this information in our possession before proceeding to purchase any property, to ensure that the person claiming to own the property actually is the owner and to ensure that there is no kind of lien or encumbrance on the property, as any debts on the property will be passed on to the new owner: mortgage, usufruct, preventive embargo annotation, social housing, tax settlement embargos, violations of town planning/construction regulations, etc.
How do I request a land registry report for a property?
Remember that if you are managing the purchase through a real estate company, this company is obliged to obtain the land registry report before signing the earnest money contract and to attach it with this document. However, if you are buying directly from a private person without any intermediaries, then you will have to obtain it yourself, which can be done online or directly at the local Property Registry.
A notary is an official who formalises the private documents submitted in the form of public deeds, while attesting to the legality and legitimacy of those documents. In a property purchase transaction, once the transaction has been agreed and the mortgage granted, the notary must certify the change of ownership. Notarial services must be used even if you are not applying for a mortgage.
How much are the notarial fees/expenses?
The fees charged by a notary depend on the price of the property and, although they may vary depending on whether there are guarantors or not, the number of copies that have to be issued of the deed or its length. However, they are not set by the professional notary directly, but are determined by law, in the form of a tariff rate that is the same for all citizens. If you have asked for a mortgage, you will have to pay for two deeds, but not if the purchase is through subrogation or paid cash on the spot. Thus, as an example, if we want to buy a house worth 250,000 Euros and we have asked for a mortgage of 175,000 Euros, we will have to pay the notary about 900 Euros for the purchase/sale deed and the mortgage deed.
Who chooses the notary? The buyer or the seller?
As there will always be a conflict between the buyer’s and the seller’s interests, it is essential to have an independent third party to ensure the legality of the transaction and provide advice to the two parties as to the most appropriate solutions. If both parties agree, they can use whichever notary they want. If they do not, the buyer will choose the notary, but within certain limits based on the property’s location. For example, if the property is in Sevilla, the notary must be based in that city or in its vicinities, but not in Madrid, for instance.
Experiential Sales Office
What is an Experiential Sales Office?
Since 2015, Vía Célere has opted to include Sensorial Marketing when selling homes, offering the customer an experience that moves away from the traditional way of selling off-plan by raising emotions through the five senses and enhancing everything the customer takes into account when buying a home.
Themed experiential sales offices
The so-called Experiential Offices were set up to provide an experiential circuit where the customer will find 5 themed areas, divided in different seasons:
- Virtual visit: use an app to interactively view the building, its communal areas and inside the property.
- Outdoor communal areas: customers can touch the grass, the water, all accompanied by smells that recreate their different sensations.
- Indoor communal areas: customers will see a recreation of the Social-Gourmet Room, an icon in Vía Célere’s developments.
- Discover your Property: this room gives customers the chance to see the construction details of their property, as well as the benefits of its "A" Energy Rating.
- Personalise your home: here customers can use the app to access a range of personalisation options, see in real time what each of the proposals selected on the screen look like, and also check out the materials and see their textures in detail.
- Once the experiential visit is over, the customer can take a guided tour of the pilot apartment and see everything in detail.
This is undoubtedly a uniquely different experience, one which focuses on customers and allows them to examine all the important points to take into account when buying a home.
What is a new build?
This refers to everything that is constructed on a plot or piece of land where there are no pre-existing elements or constructions, regardless of its surface area. The first step to obtain a permit for a new build should be to submit the preliminary project for approval at the respective Municipal Works Department, although this first stage is optional. Once the Preliminary Project is approved, the Building Permit is processed under the supervision of an architect, thus allowing construction work to begin.
The bylaws of an owners’ association are a set of complementary regulations that establish how the common floors, apartments, premises, services and installations of the Homeowners’ association will be used, along with the expenses that will be required for maintenance, administration, insurance and/or repairs.
According to the Horizontal Property Act, all owners’ associations are obliged to have a foundational deed that includes a description of the building, the floors, apartments and premises and the shares of participation corresponding to each owner. However, the association’s bylaws are not obligatory.
Where can I find out about the bylaws of an owners’ association?
If you are thinking of buying a house, you must be aware that the bylaws of an owners’ association are very often included along with the deed of sale. If they are not, we need to find out if the association has them, by asking the president or administrator of the association to provide a copy. If there is no copy, we can go to the Property Registry where the property is registered. There, they will tell us whether there are any bylaws registered and we should be able to examine them if so.
What happens if the Association has no Bylaws?
Most associations do have them and others simply use a partial transcription of the Horizontal Property Act. In reality and as a general rule, the Association’s Bylaws are simply an adaptation of the legislation in force to the specific circumstances of that association. However, it is important to know that even if there are no official bylaws, we cannot act in any way contrary to the provisions of the law and that when they are adapted they cannot contradict the law and must be decided by the association as a whole. If any subsequent modifications are made, they must be unanimously approved by all the owners and registered in the corresponding Registry.
What is horizontal property?
Horizontal property is a form of co-ownership between the different owners of a building that is divided into apartments. This property regime is set out in Article 396 of the Spanish Civil Code, which in turn distinguishes two types of rights:
- A unique, exclusive right of ownership on private elements (apartments, commercial units, parking spaces, utility rooms, etc.).
- A joint, inseparable property right on the communal elements of the building (stairs, gardens, entrance halls, mailboxes, etc).
In the case of the latter, communal property relations are governed by the fundamental aspects of horizontal property, based on Act 49/1960 of 21st July on Horizontal Property.
All horizontal property must be constituted by means of a public deed executed before a notary public either by the sole owner or all the owners, provided they represent 100% of ownership of the building.
How is ownership of communal elements divided up?
In the horizontal property, each floor, commercial unit or private space has been assigned a share in the building, which reflects the percentage held by each owner of all communal elements in the building. This percentage is set in accordance with the net floor area of the individual property relative to the net floor area of the building, its location, and the envisaged use of the different services and communal elements.
At Vïa Célere we offer a Personalisation Programme* with different options, based on our customers' individual tastes and needs.
A whole world of possibilities and proposals that will allow us to design an environment in which each customer can feel fully identified from day one, choosing from the materials, colours and textures we offer for walls, floors, cabinets and kitchen. Our advanced configurator allows customers to see what the finishes and materials in their home look like, choosing and assessing different options so Vía Célere's personalisation team can adapt the home in line with the buyer's tastes.
Known colloquially as the “plusvalía” or “capital gains”, this is a tax on gains in the Value of Urban Land (IIVTNU). It is a tax that applies to increases in the value of a property over the course of time (up to a maximum of twenty years) in any of the following cases:
- Transfer of the property between two parties:
- Transfer through inheritance or legacy.
- Transfer through declaration of inheritors, without testament.
- Transfer through direct donation.
- Transfer through purchase of the property.
- Forced expropriation of the property.
- Alienation through public auction.
- Limited rights of use of domain
- Usufruct (use and enjoyment of the property for life or for a limited time)
- Right of use and habitation
Who must pay the capital gains?
This will depend on the type of operation.
Lucrative title: the person purchasing the property pays the capital gains. An example of this operation is when a property is donated, thus there is no purchase/sale transaction, and therefore the party receiving the property, or transferee, is responsible for paying the tax.
Onerous title: this is where the property is exchanged for valuable consideration, thus there is a purchase/sale transaction, and thus the transferor of the property pays the capital gains. However, there is an exception: transferors who are natural persons who do not reside in Spain are exempt.
How is this tax calculated?
When calculating this tax, two factors need to be taken into consideration: the increase in the value of the land (established through an official property survey, measuring the difference between the appraisal at the time of the initial purchase and the current value) and the tax rate applicable to this type of operation, which is established directly by the local council in place at the time, which means that there can be large differences between the capital gains paid in one city and in others.
What is podcasting?
Podcasting refers to the distribution of multimedia files (usually audio, possibly including text such as subtitles and notes) through a rebroadcast system, allowing users to download a copy and listen on a personal device after the original broadcast, along with the option to subscribe.
Origins of podcasting
Its origins date back to the digital revolution of the 21st century. In essence it is related to radio, but goes one step further. Although they are fundamentally audio products, some podcasts can also be watched. The term podcast emerged in 2004 from an article in The Guardian. A year later, in 2005, the Oxford Dictionary chose it as its Word of the Year. But all this started some time before, between 2000 and 2003, when Dave Winer and other daring technologists started testing Really Simple Syndication (RSS) with the aim of including voice notes in online blogs.
Podcasts are usually led by a presenter, several collaborators and interviewees, who, over a period of time, outline and develop a specific topic, making up a series of episodes on a range of subjects.
Differences between podcasts and radio
Although there may be similarities with radio, the main difference between podcasts and radio is permanence over time. They can be listened to on demand at any time.
The competitive advantage of podcasting lies in its format: the content can be consumed anywhere and at any time, even while carrying out other tasks.
What is a developer?
The Spanish Building Regulations Act states that the developer is one of the building agents. The developer can be any individual or legal entity that chooses, promotes, programmes and finances a building project using own or external resources.
Obligations of the developer
The developer's obligations include:
- Holding a right on a plot of land, thus allowing it to be built on.
- Commissioning the project and providing the designer with the initial information required, and authorising any amendment to the project.
- Managing and obtaining the licences and authorisations necessary to build and hire the execution of the project.
- The developer is civilly liable (without prejudice to the liability of any other building agents) for execution defects relating to the completion of the work for a period of one year, for a period of three years for any construction defects or faults affecting the habitability of the property, and for ten years for any defects affecting its structural elements.
The developer is responsible for drafting the Building Book, and for delivering it to the homeowner or the building's Homeowners' Association when signing the deed.
What is the Property Registry?
The purpose of the Property Registry is to register or record deeds, contracts and judicial or administrative decisions affecting property and other rights on real estate, as well as certain judicial decisions affecting legal capacity.
Functions of the Property Registry:
Its functions include:
- Registering all deeds affecting the property or rights in rem on real estate, whether public or private. Certain administrative concessions and public assets may also be registered.
- Ensuring legal certainty for registered rights, thus favouring security and agility for legal traffic, and saving transaction records.
- Providing the registered acts, actions and rights for parties with a legitimate interest in knowing them.
All Property Registry documents must be filed in numbered, legally validated books. They will be numbered in order of age, and, furthermore, those of each municipal district will have a special correlative numbering system.
All books for the Property, Commercial and Movable Property Registers must be kept in digital format, allowing electronic access to their content at any time.
What is rendering?
It is a type of graphic representation that consists of an image generated through a 2D or 3D model. In most cases, an optical effect is achieved to provide a realistic view with depth and texture. Since these representations have the advantage of giving a more realistic perception of a space or environment, they are often used in a range of sectors and professional areas such as architecture, design and interior decoration, video games, animation and virtual reality.
The technique involved in this process is also known by the same term, rendering, in Spanish.
What is termination?
In legal terms, termination consists of leaving a contract or obligation without effect, bringing all agreements to an end in order to prevent their consequences.
When can it be requested?
Termination of a contract may be requested whenever there is an imbalance between the benefits and the economic considerations.
What are the effects of terminating a contract?
- Defects can be remedied through ratification.
- Defects can be remedied through extinguishment due to the passage of time, because usurpation also applies in cases of absolute nullity.
- A request can be made to discontinue the contract.
Terminations of contract must be requested in a civil suit filed before the appropriate Civil Courts.
What is virtual reality?
Virtual reality, or VR, is an immersive three-dimensional virtual recreation of an environment, giving us the sensation of actually being inside it. This recreation is generated using state-of-the-art computer technology involving sophisticated software and interfaces, and requires a pair of virtual reality goggles or a headset in order to enjoy it.
Advantages of virtual reality
The advantages of VR include, most notably, the fact that it offers virtual environments to people who are unable to leave their homes, creating spaces for social interaction.
Although VR has been used extensively, especially in the video games field, we are talking about a technology that has undergone significant evolution and has expanded to other areas such as the world of sport, medicine, education, the family environment, industry, art and the aeronautical sector.
It is important not to confuse virtual reality with augmented reality, where the user is in a real situation in which objects and images are inserted in order to recreate a scene.
What is mortgage subrogation?
Mortgage subrogation is a type of novation, i.e.: a modification of any of its factors, such as:
- Of the debtor or between individuals: changing the mortgage holder. Banks only admit the new debtor following a risk assessment, as with any other type of loan. The existing debt can therefore be taken on without becoming liable for new taxes, although subrogation does involve a series of fees (notary, agency, registry, and a subrogation commission as signed at the time the mortgage began).
- Of subrogation of creditor or between entities: consists of changing a mortgage from one bank to another, generally obtaining an improvement in the loan conditions, without the need to cancel it or formalise a new one. It is therefore possible to benefit from a change in the conditions and in the amortisation period without incurring any payment of taxes, although the subrogation expenses will have to be paid (notary, agency, registry and subrogation commission).
Net floor area
The floor area delimited by the perimeter defined by the internal face of the external walls of a building or an element of a building, including half of the floor area of its covered private exterior spaces (such as terraces, balconies and clothes lines, porches, overhangs, etc.), measured according to the horizontal projection of the roof.
The net floor area does not include the floor area occupied by partition walls, vertical structural elements, piping or ducts with a horizontal cross-section of over 100 square centimetres, and any floor area with a clear height below 1.5 metres. Net floor area also does not include floor area occupied by uncovered outdoor spaces.
Gross floor area not including communal areas
The net floor area, including the floor area occupied by the interior elements mentioned in the above definition and including 100% or 50% of the exterior walls, depending on whether they are enclosure walls or dividing walls, or if they are walls shared with other elements of the same building, respectively.
Variable interest rate
What are variable interest rates?
Variable interest rates are those that apply to a specific loan, and can change over its lifetime.
The best-known ones are those given in mortgage loans and those that set the mortgage fee to be paid each month. Variable interest rates depend on the interest rate differential, which is a constant percentage plus (usually) the Euribor rate, which fluctuates every day and is taken as a reference in each mortgage review (every year or every six months).
Difference between fixed interest and variable interest
Unlike fixed interest rates, variable interest prevents the consumer from knowing exactly how much the monthly mortgage repayments will amount to over the lifetime of the loan.
Fixed interest rate
The fixed interest rate is any interest rate whose value and amount remains constant throughout the lifetime of the loan or credit.
This implies a greater risk for the entity issuing the credit, since it is impossible to adapt the conditions of the loan to the current situation, for which reason fixed interest rates are generally higher than variable interest rates.
Mortgage appraisal and methods
A mortgage appraisal is an assessment of a property to be used as collateral for a mortgage loan.
There are different methods to carry out the appraisal:
- Comparison method: This is the most widely used method, and consists of valuing the property under appraisal by comparing it to similar properties whose market value is known.
- Residual method: This consists of calculating the value of the property once constructed, and subtracting all expenses incurred during construction. It is normally used when the comparative method is not possible as there are not enough similar properties for comparison.
- Capitalisation method: This consists of using economic formulas to calculate the value of the property by updating, as of the appraisal date, all net income it will generate. This method is used when valuing large-sized businesses.
- Cost method: This consists of calculating the replacement cost of the property being valued. It is used to provide support for the appraiser, ensuring that the comparison method is logical.
What information are property appraisals based on?
The aspects taken into account when making the appraisal include:
- Location of the property
- Visual inspection of the property
- Apparent state of conservation and state of construction
- Existence of visible easements that could affect the value
- Check that the property coincides with the description shown in the documentation
- Check the state of occupancy of the property
- Check that the property meets urban planning rules.
The factors that can affect the appraisal include, most notably:
- Recent sales
- Floor area
- State of conservation
- Materials and facilities
- Surrounding area
- Public transport
The appraisal is valid for six months from the date of issue
A tax is a duty that is paid when private use is made of a public utility or service, in this case water. It is separate from a fee or rate, because the fee or rate used in the private sector, is variable and changes depending on supply and demand and general market conditions. Where water tax is concerned, it is the municipalities, through the councils (in most cases) that collect water tax from the citizens.
Why is there a tax in place for water?
The water service in Spain is public. Although in some towns and cities it may be privatised, it is the public sector’s obligation to provide this service to the people. Unlike many other markets where there is private competition and several companies can offer their services, this market is kept exclusively public because due to its nature, having different companies enter the market would not be economically efficient, as it would result in redundant infrastructures and inefficiencies in the system.
Who has to pay the water tax?
Every natural or legal person that uses the public water system and who owns real property must pay for its use. The method most commonly used is independent collection for each home, property or installation. A technician or sometimes the owner will read the cost directly from the water meter. Depending on the council, this tax may be collected every two months, every three months, or together with other local taxes.
How is it paid?
In general, there will be an office where the tax is paid in cash by presenting the corresponding bill. However, if the meter is publically accessible, it may be possible to establish a standing order with a bank account. The council is responsible for facilitating payment methods and the citizen is responsible for paying the tax.
APR (annual percentage rate)
What is APR?
APR (Annual Percentage Rate) is the interest rate that indicates a product's effective cost or yield. It is used as a reference interest rate in order to ensure uniformity in loan and credit operation types and conditions with different settlement periods, charges, commissions, etc., and differs from the interest rate in that APR also includes bank charges and commissions together with the compensation received by the owner of the money (whether a bank, a private individual, etc.) for temporarily assigning it.
The Annual Percentage Rate is presented as a percentage, and is calculated according to a standardised mathematical formula that takes into account the nominal interest rate of the operation, the frequency of payments (monthly, quarterly, etc.), bank commissions and some operation expenses.
Since it is not known how interest rates will evolve over time, APR for variable interest loans or credits is calculated assuming that the rate remains at the same value as at the time of calculation. In these cases, the expression used by the credit entity will be "Variable APR", always indicating that this figure is for information purposes only and will vary in accordance with interest rate reviews.
What is a Consultative sale?
This is the type of sale in which the seller gives customers personalised advice so they can adapt the product in line with their requirements, understand how to use it, feel satisfied after acquiring it, and, consequently, come back again to buy. We could say that the consultative sale is a guided purchase.
When we sell a product or service, we also sell the guarantee that the customer will get the most out of it. The consultative sales representative sells and builds loyalty in the same process.
The 3 aspects that modified the concept of sale known until now, giving prominence to the consultative sale, can be summarised as:
- The sale: the consultative sales representative's goal is not only to sell, but also to ensure the customer returns, which can only be achieved by offering a good experience.
- The customer: the customer is now in control of the process, is proactive, looks for information, searches, visits stores, negotiates payment methods, buys and receives the product.
- The seller: the person who manages all these variables, and makes the sales service stand out in order to ensure the customer not only buys but also returns every time he or she needs the product.
Techniques used in the consultative sale
Furthermore, in the consultative sale it is necessary to take into account the three different techniques used:
- Cross-selling: interpret the purchase and offer a compatible product, creating a price offer for both products.
- Upselling: offer a superior version of the product at a good price.
- Feedback: this is an after-sales technique that is used to study customers and make them part of the company.
In old times, houses were ventilated naturally through cracks in the walls, windows that did not close properly, clearances around entrance doors, as well as conscious ventilation by opening the windows to refresh the air, which lowered the comfort of the indoor temperature.
Improvements in building construction quality and current trends in building mean that homes are more airtight and ventilation is required to ensure indoor air quality without losing the comfort temperature, while seeking to improve energy efficiency.
What is dual-flow ventilation?
Dual flow ventilation consists of a ventilation system in which air is introduced in each part of the building or individual property, with stale air being extracted from the wet rooms (kitchen, toilets, bathrooms, etc.) thanks to a suitably regulated duct system.
Key to dual-flow ventilation is the mechanical ventilation unit with heat recovery, which recovers the heat or cold discharged and includes filters to improve air quality, while also ensuring minimum consumption.
This achieves constant air renewal, clearly increasing air quality, as well as optimising ventilation to improve health, energy efficiency and comfort, with a system that does not require excessively advanced technology.
This refers to homes located in a building made up of properties grouped together with communal elements and entrances, with maintenance, use of communal elements and services, and good neighbourliness rules all being governed by the Horizontal Property Act or by resolutions of the Homeowners' Association; here, homes or properties are accessed from communal spaces, which act as the link between the indoor space of the properties and the outdoor public space.
This category, also known as collective housing or collective residential, would include apartments, studios, duplexes, penthouses, apartments, ground floor properties with garden, lofts and attics.
This refers to the part of a building that protrudes from the wall that supports it.
What is a property for primary residence?
For the Tax Authority to consider a property a primary residence, it must meet the following requirements:
- Be the taxpayer's residence for a continuous period of at least three years.
- Be moved into and inhabited by the taxpayer within no more than twelve months.
- Parking spaces acquired jointly with the property are also subject to deduction for primary residence.
What type of properties are not considered primary residences?
Annexes or any other elements that do not effectively constitute the individual property itself, such as utility rooms, gardens, recreational areas, swimming pools and sports facilities acquired jointly with the individual property are excluded from the concept of primary residence.
These are important considerations, since failing to meet any of these requirements will mean the Tax Authority no longer considers the property a primary residence, and as such it will not be liable for tax deductions and any deductions made will have to be returned.
However, there are some exceptions that ensure the character of primary residence is not lost, such as:
- Circumstances that require a change of address
- The property becoming unsuitable for use due to disability
These are properties which, due to their characteristics and location, are most likely to be used as a temporary residence, regardless of their current use.
Such properties must always be declared before the Tax Authority, even if they are not the taxpayer's primary residence. As a general rule, 2% of the value of the property must be paid for properties that are not primary residences.
This refers to homes located on an independent plot, in an isolated building, or horizontally grouped to another building used for housing or any other use, with exclusive, independent access from the public road or from a free public use space. Single-family homes also include all properties that, grouped together under a co-ownership system or homeowners' association, meet a set of conditions in line with the typology of terraced houses with communal elements and services.
This category would include detached houses, semi-detached houses, terraced houses and bungalows.
What is a virtual visit?
It is a digital tool that can simulate a real space using images or videos, which are joined together using special software for 360º viewing and interaction.
The information in the simulation can be supplemented as required, from placing markers through to moving along the route, zooming in and out, checking photos, maps, videos, etc., thus adding value to the user experience.
Advantages of a virtual visit
Virtual tours or visits have many advantages:
- Increase customer confidence
- Improve website visibility
- Attractive, differentiating content
- Can be shared on social media, websites, blogs, etc.
Variable rate loan
This is a loan in which the specific value of the interest rate that is applicable does not remain constant over time, but varies depending on the evolution of an index or reference known by the parties and is reviewed each period of time agreed by them.
Common areas and elements are those that are necessary and useful for the correct usage and enjoyment of the building by the residents. These are garden areas, the entrance, the caretaker’s premises, the room containing cleaning tools, etc. There may be more or less of these areas depending on the needs of each owners’ association and they must be recorded in the Foundational Deed of the condominium.
What are the common areas and elements of a condominium?
- Floor/land: the floor and land on which the building has been built, covering both the surface occupied by the building itself and the area of the whole plot, including gardens, swimming pools, sport facilities, car parks, etc., as applicable.
- Foundations: formed by the lower part of the building and everything that comprises the building’s structure, such as pillars, beams, floor slabs, load-bearing walls, girders, etc.
- Flights: the parts of the building not attached to the ground, in other words, the flights of stairs and different floors that have been built in accordance with building regulations.
- Roofs: unless otherwise specified in the Foundational Deed, all roofs shall be considered common areas.
- Access elements: all the areas through which the residents can access the private areas, such as their homes or premises, or other common areas, such as stairs, entrances, corridors and gateways.
- External elements: these include the facades, the terraces, balconies, windows and external cladding.
- Patios: the inner courtyards are also considered common areas in theory. However, in practice they are included as private elements for the premises and homes that have access to them.
- Ducts, conduits and channels: apart from the drains and downpipes, these include the supply installations of all kinds up until they reach the point where they are channelled off in to each owner’s home, from which point they are considered private elements, rather than common.
- General installations: these include lifts, tanks, meter rooms and cisterns, among others.