Demands for bank repossessions and cheap properties are quite high in Tenerife. Understanding the demands of customers, we at Flogit.properties have enlisted many properties of bank repossessions in Tenerife. These properties usually sell quite fast as people are desperate for such investments. But the only thing is that much information is not available regarding these properties.
Bank repossessions in Tenerife for all kinds of properties
Flogit.properties enlists some of the best properties in Tenerife which are bank repossessions. Interestingly, some of these properties can be categorized under luxury properties like villas, duplex, studio apartments, penthouses and so on. If you are looking for best bank repossession in Tenerife, we provide comprehensive listing for the same.
Maximum information about bank repossessions in Tenerife
Usually much information is not available on bank repossession properties. At Flogit.properties we try to gather maximum information on such properties with photographs as well. We want our customers to get the best deal in any property.
Procedure to purchasing a property in Tenerife
Purchasing a property in Tenerife might well represent the fulfillment of a life-long dream and at “TENERIFE PROPERTY CENTER” we will do our best to find your ideal property and help to make your dreams come true.
Through our experience we offer you the best and most comprehensive pre and post sale assistance, guiding you through the necessary steps in order to make your purchase and /or investment as smooth and hassle-free as it can possibly be.
In the following pages you will find a complete guide to purchasing property in Tenerife.
Acquiring a property abroad needn’t be either difficult or problematic just allow our team to help you every step of the way.
Please let us know what you are looking for and we will be delighted to provide you with a list of properties that meet your criteria.
We will be more than happy to arrange viewings for any of the properties that you feel will be suitable.
Once a property has been chosen, the purchase price and terms will have to be negotiated with the seller.
Such negotiations are usually carried out by our selves directly from our offices, but should you choose to appoint a lawyer, he/she can carry out such negotiations on your behalf.
If you wish to know more about this subject go to our choosing a lawyer and legal advice sections.
Once a verbal agreement has been reached, you will be expected to formalize your offer by signing a private purchase agreement contract and making a deposit payment.
Please go to our private purchase agreement section for further details.
CHOOSING A LAWYER
You are not obliged to use a lawyer for your property purchase in Tenerife. We will, on your behalf, request a ‘nota simple’ which is a document that displays the current status of the property (whether there are any outstanding charges, etc.). Most importantly the Notary will check and confirm all legalities, and the terms and conditions of the transaction. However, should you wish to use the services of a solicitor then there are many multi-lingual lawyers in the south of the island and we also have our collaborating lawyer that we can recommend.
With such a contract both the vendor and purchaser commit themselves to finalizing the purchase at a later date; it is therefore a serious document, which should not be underestimated and consequently, TPC will provide you with a translation and clearly explain its contents in order that you fully understand it.
Contracts legally are drawn up in Spanish and should be accompanied by an English translation.
A typical contract will specify details of the purchaser and vendor, being these the same appearing in the Title Deeds (Escritura), purchase price ( which includes sales commissions, normally this payment is invoiced to the vendor, but under certain circumstances ie: bank repossessions this can be invoiced to the purchaser, but is paid from the agreed sales price ) method of payment, period of contract, guarantee that the property is transferred free of any encumbrances such as taxes, tenants or occupants etc., and stating on whom the responsibility to pay the charges and fees deriving from the purchases will fall. It will also stipulate the penalties for non-fulfilment.
Upon signing the private agreement a deposit usually equivalent to the 10% of the purchase price will have to be paid as a sign of commitment on behalf of the purchaser.
Contracts for new developments are slightly more complex and contain numerous clauses with reference to the legality of the land, location of development and ownership, building permissions, date of completion and are drawn up directly by the developer.
Below is a list of the services supplied by the legal representative regards post and pre notary services they would carry out on your behalf relating to your Real Estate purchase
- Legal and Economic counsel
- Verification of all property related documents
- Verification of all registry charges
- Verification of all local rates: ie I.B.I & Basura etc
- Verification of community fees
- Preparation of notary contract and signing date
- Translation of notary contract at signing in notary
- Register the property in the land registry after purchase
- Collect the final Escitura from notary
- Property transfer tax and declaration
- Non resident tax retention and payment
- Registration of the notary contract at the land registry
- Pickup the land registration from the land property registrar
- Inform the land office ( cadastre ) of the change of ownership
- Inform the relevant community office of the change of ownership
- Inform Unelco of change of ownership ( electric company ) Connect to this service for new builds can take upto 7 days
- Inform Entamansur of change of ownership ( water company ) Connect to this service for new builds can take upto 7 days
FINANCING THE PROPERTY & BANK ACCOUNTS
Applying for a Mortgage is an easy process with TPC as we work with several of the major Banks in Spain. We will advise you on the best rates available with our banks here in Tenerife.
• Approximately 260 Euros for a property valuation.
• Approximately 1% mortgage opening commission.
• Insurance, varying from 120 – 240 Euros per year.
• A fee for the Notary & Registration of the mortgage.
Provided you supply the requested financial information, which is very straightforward, the mortgage can be effective within 15 to 30 working days.
You will need to open a non-resident or resident bank account here in Tenerife, to facilitate the transfer of funds prior to signing at the notary, bank transfers can take between 7-14 days so make sure you allow plenty of time.
SPANISH IDENTIFICATION NUMBER (NIE)
A N.I.E. or Numero de Identidad de Extranjero, is fundamental when you purchase a property in Tenerife and has to be applied for at the local Police station prior to going to Notary for final completion. A small stamp duty charge of 9€ is payable at the bank prior to submitting the application.
Residents and non-residents alike are obliged to pay taxes to Hacienda (Spanish Tax Authorities). In order to do this a fiscal representative or lawyer can be appointed.
The Notary is an official appointed by the government and comparable to a judge, who ensures that all the paperwork has been drawn up properly and that the property is free of debts and encumbrances.
The Title Deeds are drawn up in Spanish and are translated by an official translator before being signed to assure that all personal details are correct and that the parties fully understand the nature of the transaction and the type of document that is being signed.
Once signed at the Notary offices, the Title Deeds “Escritura” must be presented in the Land Registry office where the new owner’s details are registered.
This process takes approximately one month.
TCP will pick up the Deeds and make them available for the new owners collection from our office at the customer’s convenience.
TPC or the nominated lawyer will also assist in transferring all billings and standing orders referring to payments for local rates, community fees, electricity, water, etc into the new owner’s name. Please note that with properties over 20 yrs old Unelco may request that a new electrical bolletin is issued, and this may come at an expense normally around 350€ ( but this cannot be given as an exact figure as there are many differing elements that can change this figure )
ESTATE AGENTS COMMISSIONS – how we are paid
Estate agents in Tenerife are by and large paid commission by the property seller. In standard re-sales this is always the case although one could argue that the buyer is actually paying if the seller has given the agency a net price to which they should add their own commission to (as is common practice.) For example, a property owner may request 100,000€ net back to them in which case the agency will set the price at 105,000€ (100,000€ plus 5% commission.) So the agency effectively “adds” their commission. This will be the price which will appear on the title deed at the notary and the agency will submit an invoice for their commission to the seller. Commission is normally around 5% on prices of 100,000€ and above. On sales below 100,000€ it can be negotiated with the owner or a fixed fee may be charged. In these case the buyer will never be privy to the amount of commission involved.
With bank repossessions it is a slightly different process. Our agency is given the property usually at a fixed and non-negotiable price by the bank, we´ll use 100,000€ as an example again. So on a price of 100,000€ we are told to simply “add your own commission.” This is identical to a private seller and would result in a price of 105,000€. However there is one difference and that is that the bank will not allow for the commission element to form part of the final price which will appear on the purchase deed. So whilst the total price to the buyer is 105,000€, the purchase deed may only show 100,000€. The 5,000€ commission would be retained from the proceeds of the sale and we would provide an invoice for this charge post completion to the buyer. Although from the paperwork it looks as though the buyer is paying more than they should be (5%/5,000€ more) there is no difference between this and a standard resale other than an extra piece of paper at the end of the process and no difference in the overall amount they pay for the property.
Our maximum commission on repossessions of 100,000€ or more is 5%. An additional charge of 1% of the mortgage amount is added where a mortgage is obtained for the purchase. We do not negotiate on commissions as we see no reason why we should make less commission that any other estate agent in Tenerife – please do not ask!
The work required to sell a repossession with a mortgage of up to 100% is far greater than the work involved in a standard resale. Even so, we do not charge anymore for a repossession sale. Regardless of whether or not the commission is included in the price on the deed or is charged separately, the price the property is advertised at on our website will always be inclusive of any commissions. And that is the price a buyer should concern themselves with.
SENDING YOUR MONEY ABROAD
Banks versus Forex exchange brokers
One commonly overlooked area which can produce substantial savings,.. is what is the most cost effective method of transferring your funds abroad?? Don’t forget it can take several days for the banks to provide this service, so you will need ready to send the funds here in preparation for the purchase your new property. Banks over the last decade or so have not done their reputations any good by the financial chaos they created, mainly caused by their bad judgment and greed, all of which has contributed significantly to the financial mess most of us are still experiencing. Banks primarily exists from making money from its customers ie: YOU, where forex exchange brokers exist by saving its customers money…..ie: getting you a far superior exchange rate for your hard earned currency. As a rough example using a forex exchange broker on a transaction of a 100,000 STERLING could earn you between an extra 1,000 to 2,000 EUROS via the better rate they will get for you.
BASICALLY NOT A HARD CALL TO MAKE IS IT
Obviously it’s a minefield out there…… and there will be good and bad services in every sector of business, so here are a couple of FOREX COMPANYS WE USE ON A REGULAR BASIS.
Foreign Currency Direct plc
FEES AND TAXES
A number of taxes and legal fees derive from the purchase of a property.
Prior to going to notary TPC or the nominated legal representative will provide an estimate of such costs generally known as “closing costs”.
The closing costs usually sum up to between 8 and 10 per cent of the purchase price and they consist of:
• Transfer Tax (IGIC) at present 7% of the official value of the property if purchasing a new property from a developer or 6.5% when purchasing a resale.
• Legal documentation tax (Impuestos sobre actos jurídicos documentales, AJD) at normally 0.75%
• Plus Valia Tax the increased value of the land, which is calculated at various rates on the increasing annual value since the previous sale.
Legally the vendor is liable for the “Plus Valia” tax but in practice the purchaser is often asked to pay all fees & taxes for transferring the property.
• Notary Fee for drawing up the title deeds and researching the property.
• Land Registry Fee final registration of new owner’s details.
• Cheque drawdown ie: amount the bank will charge to prepare the bankers draft for the purchase, varies from 0.25% to 0.50% of the cheque value
Whether you are purchasing or selling a property, LTP shall walk you through the process, step by step assuring your best interests at all times.
A time may come when you wish to sell your property. As a non-resident you will have to pay 3% of the declared value as a retention to “Hacienda” the Spanish Tax Office, this is to cover any public or private debts that could be outstanding.
Provided that your accounts are up to date, you can claim most of the retained monies back within 5 to 6 months.
RENTING YOUR PROPERTY ( please see section re letting laws )
If you do not intend to use the property you are acquiring all year round, you might choose to rent it out.
If this is the case, there are a few things you need to know and take into consideration.
There are two main types of developments in the south of Tenerife:
If you choose to purchase in a residential complex you should consider the fact that short term holiday lettings in such a community would not be permitted.
If you are considering holiday letting you should look into acquiring your property in a complex registered with the Ministry of Tourism.
On the other hand medium and long-term rentals (from three months onwards) are allowed in all complexes.
The practicalities connected with letting your property (such as acquiring and screening your tenants, signing contracts, collecting deposit and rental monies, cleaning and maintaining the property, changing the laundry, etc.) can be dealt with through a management company such as TPN Rental Department or with an exploitation company should there be one already present in the complex.
COMMUNITY OF OWNERS
Apartments and villas that form part of a building complex will generally be subject to the ‘Law of Horizontal Division’. These laws regulate and protect the interests of the various owners of property, i.e. ‘the community’, on that complex. It requires that a ‘Community of Owners’ be formed to manage the running of the complex. Initially, the builder usually forms this Community when the construction is first completed. The total costs of running the complex are shared between the owners, usually based on their individual ‘area of ownership’ as a fraction of the total area of the properties. This fraction of the total ownership is the owners ‘quota’ and is used as a basis for calculating the owner’s share of the community fees and for assigning ‘voting power’ at the Annual General Meeting.
The purpose of a Community is to provide and maintain the various services required by any community. The supply of water, electricity, satellite TV, swimming pool maintenance, communal lighting and cleaning services, etc, all need to be implemented, scheduled and paid for. Although individuals within the community can meet these tasks, most complexes appoint a professional ‘Administrator’ to take care of this. The President and Committee members should hold regular meetings to consider the needs and requests of other owners, and then direct the Administrator accordingly.
MAKING A WILL
Nobody likes to talk about wills, implying as they do, the departure of a beloved one….unfortunately when the unexpected happens it is imperative to have made provisions to make sure that your assets will be distributed in accordance with your wishes.
Spanish assets can be incorporated into a British will but this can cause a great deal of time-consuming negotiations.
It is therefore easier and highly recommended to draw up a Spanish will, a rather straightforward and inexpensive document that our staff can prepare and present to the authorities.
Although such insurance might cover privately owned portions of the building, under no circumstances will it cover your contents.
In order to protect your home and your investment you are advised to take up a comprehensive “building and contents” insurance.
Due to our collaboration with the insurance agents, Israel Cabrera, who have offices in Los Cristianos, Costa del Silencio and Valle San Lorenzo, you are guaranteed to receive professional advise either by them directly or through the staff at LTP on all insurance matters, including life, car, pet, etc.
IMPORTANT INFORMATION REGARDS HOLIDAY LETTING LAW
Bolkestein, Canarian High Court, judgments, Spanish Supreme Court, constitutional rights, illegal letting, tourist licence, residential complex ….. In the words of the old comedy Soap, “confused? You will be”. At least, you will be unless you inform yourself of some very basic principles.
The confusion comes mainly from the proliferation of outlets where the issue has been discussed since the 1995 law regulating Tenerife’s tourism started to be enforced in late 2010. Previously, the law had been widely flouted, and only infrequently and unenthusiastically enforced, but with increasing evidence of an imminent economic crisis and collapse of the property sector, the Canarian Government saw an opportunity to take tourism by the scruff of the neck and drag it upmarket to compete with a burgeoning range of new offers provided by luxurious and sophisticated resorts. That it might raise some money in fines and mollify an increasingly worried hotel sector in the process was no doubt seen as a bonus.
In recent months, video after video has appeared showing the 5* hotels and niche markets – from windsurfing to walking, astronomy to vulcanology – that Tenerife can offer. And in recent months too, maybe late in the day, the realization has dawned that the Government is actually serious about its enforcement of tourism legislation, and that the fines being issued are not inconsiderable, and neither are they going away.
The situation has not been helped by the announcement that the Canarian Government is in the process of approving a new tourism law, and the discovery that three early fines under existing legislation have been overturned in the Canarian High Court on the grounds of the EU’s Bolkestein Directive, a document whose main intent seems to be to send its readers to sleep, or to the bottle, within thirty seconds.
So, to sum it up in plain and simple English, the situation is the following:
- Under tourism legislation as it presently stands, private individuals may not independently let their properties commercially, for holidays, under any circumstances. If their property is licensed for tourism, however, they may let it for holidays through an approved agent: in the case of tourist complexes, this will be an on-site sole agent. Residential lets are permitted, but if they are for fewer than three months, the Department of tourism will deem them to be commercial holiday lets.
- A team of Inspectors is employed to find evidence of illegal activity, and this includes online adverts and, most recently, inspections in person in the guise of tourism standard quality surveyors asking the occupants of apartments how long they are staying, how much their holiday cost, and whether they are happy with the tourist services included with their booking, etc. Anyone renting their property out illegally is taking a huge risk of being discovered and of a fine being imposed.
- Fines are being issued for those who are considered to be breaking the law. First offences are being fined at around 18,000 Euros, a sum being reduced to around 14,000 Euros on first appeal to the Government. Second and subsequent offences will be fined at around the 30,000 Euros and 60,000 Euros mark. After confirmation of the fine, the next stage appeal is to the Canarian Courts and the first cases are now going through this process. To avoid the Government placing an embargo on bank accounts and property after a fine has been imposed, and adding legal interest, the fines must either be paid up front at the point of going to Court or placed in an escrow account at the Court itself in case the appeal should fail.
- There is nothing, technically, in the law itself prohibiting owners of residential property from applying for a tourist licence, but for the last decade or so the Government has had a moratorium on granting all tourist licences except for 4* or 5* hotels. This moratorium, or ban, on issuing tourist licences, has been renewed at regular intervals, and the new legislation will incorporate it into law so that it is a legal principle that residential property is not issued with a tourist licence. There is some evidence that there will be a few exclusions in the new law for certain types of villas in certain circumstances, but until the legislation has completed its Parliamentary process and becomes statute, it is impossible to know for sure what the situation will be.
- Three recent judgments by the Canarian High Court have overturned fines on the grounds of the Bolkestein Directive. These, however, are no grounds for hope for those who wish to let their properties personally because the rulings have nothing to do with the inspections and fines imposed on individual property owners. They were imposed on companies for running tourism businesses without Canarian authorization, but the Bolkestein Directive means that they do not need such permission. Even so, they must themselves conduct their business in accordance with the law. The law is still the law, as described above, for individual property owners and agents alike, and the rulings do not affect that. Holiday lets may not be undertaken on residential complexes at all, and on tourist complexes, may only be undertaken by the registered on-site sole agent.
- Finally, it is worth mentioning that Canarian close control of its tourism offer has been upheld by Europe on the grounds that the Canaries is denominated an ultra-peripheral region. The EU has eight such regions: Réunion, Guadeloupe, French Guiana, Saint-Martin, Martinique, Azores, Madeira, and the Canaries. The classification is designed to compensate regions for the special circumstances arising from their great distance from their national centers of power. It is this status, for example, that gives the Canaries their particular and beneficial customs allowances, and permits residents discounted travel within Spain. It also allows the Government to develop policies that might be seen as protectionist elsewhere, and which some see as protectionist here, but the Government believes that our tourism is our most valuable resource and deserves protection – and that is something with which we will surely all agree.
ENERGY PERFORMANCE CERTIFICATE REQUIREMENTS IN SPAIN F.A.Q
What is an Energy Performance Certificate?
Energy Performance Certificates (EPC’s), or as they are properly called, Certificado de Eficiencia Energética (CEE), are documents which will show how energy efficient your home is displayed as a rating from A to G. Much like the stickers you see on things such as fridge freezers, washing machines or air conditioning units, the Energy Performance Certificate in Spain gives the property a standard energy and carbon emission efficiency grade from ‘A’ to ‘G’, where ‘A’ is the most efficient and ‘G’ is the least efficient.
Who needs an Energy Performance Certificate?
After 1st June 2013 every domestic property for sale or long term rent needs to have an Energy Performance Certificate in Spain. This does not apply to properties that are currently rented out on a long term basis. These only require an Energy Performance Certificate when a new tenancy is agreed.
Are there any exceptions?
If you have a long term tenant in place you do not need an Energy Performance certificate in Spain. If your property was built after October 2007 you may find that you already have a Spanish Energy Performance Certificate. To check this, look on your plans to find the architect and contact him. Likewise, if you only rent your property out on a short term basis (ie as holiday rentals) you may not need an EPC in Spain.
Will I be able to rent or sell my house without an EPC?
No. After 1st June 2013 you will be required by law to present your Energy Performance Certificate in Spain when your property is for sale or long term rent. When you sell your house the Notary will need the original EPC and when you rent your house the tenant will have to be given a copy of your Energy Performance Certificate in Spain.
When will this come into effect?
The law was formalised on the 5th April 2013 and will take effect on the 1st June 2013. You will be expected to comply as soon as possible after this date. This applies to properties currently offered for sale or new rentals and for properties new to the market. Whether your property is for sale or rent you will have to have a Spanish Energy Performance Certificate in place before your property can be advertised. This does not apply to current long term rentals. If you already have a long term tenant in your property then you do not need the EPC in Spain until you have a new tenancy.
Who can issue the Energy Certificate?
Only certified and registered assessors are able to issue the Energy Performance Certificate in Spain. This includes architects, technical architects and some engineers. In the South of Tenerife, we know that the following web address has been recommended to The TPG as providing good value:
How can I get an Energy Performance Certificate for my property?
You will need to contact a registered assessor who will be able to assist you in getting your Energy Performance Certificate in Spain.
How much does an EPC cost?
The cost depends on the size of your property so you would need to contact a registered assessor for further information. Payment is due once the Energy Certificate has been issued. You do not need to pay in advance for your Energy Performance Certificate.
Who has to pay for the Certificate?
Ultimately the owner of the property will have to pay for the Certificate. What if I get a low rating on my EPC? Along with your Energy Performance Certificate you will receive a report giving advice on how to improve your property’s energy rating. The report will recommend cost effective measures which could be undertaken to improve the energy rating of the property. It will also contain information about the rating that could be achieved if all the recommendations were implemented.
Why have Energy Performance Certificates been introduced?
The EPC has its roots in the Kyoto Protocol which was a worldwide initiative introduced in 1997 to address the issue of Greenhouse gases. Since then the European Union has formulated the European Directive for the Energy Performance of Buildings, which applies to all member states, with a clearly defined timetable of the measures that must be introduced. An Energy Performance Certificate (EPC) is a certificate which demonstrates the energy rating of a building. It forms part of the ‘Energy Performance of Buildings Directive’ (EPBD).
How is the rating on my EPC in Spain worked out?
A Registered Energy Assessor will visit your property and take measurements and recordings from things such as your air conditioning, your hot water system, type of windows fitted, type of insulation, type of construction and so on. The readings taken will then be entered on-line into one of the Governments approved programmes which will generate the rating for your property giving its energy efficiency and environmental impact. The programmes used are the same for all properties so a potential buyer or tenant will be able see the projected energy costs for each property viewed. Your Energy Performance Certificate in Spain will be registered in the Catastro reference for your property.
Can I get an EPC before 1st June 2013?
Yes although the law is not due to come in until 1st June you can book for your Energy Certificate in Spain before this date.
Do I need an EPC if I only rent my property out for holiday lets?
Yes In general you do still need an EPC in Spain even if you only rent your property out for holiday lets, although there are exceptions.
What if I rent my property out through an agent?
Either you or your agent will need to obtain a Spanish Energy Certificate for your property for long term rentals or sale. An agent will not be legally allowed to offer your property for long term rent or sale without a Certificate.
Can I advertise my property without an Energy Certificate?
No. As from 1st June 2013 you will need an Energy Performance Certificate in Spain to be able to advertise your property for sale or rent.
How long is the Energy Performance Certificate valid?
The Energy Performance Certificate in Spain lasts for 10 years.
What if I make changes to my property?
You can have your property re-assessed at any time during the currency of your EPC.
What if I have an existing tenant?
If you have an existing long term tenant you do not need an EPC in Spain. However, when you issue a new tenancy agreement you need the EPC for the incoming tenant.
Can I get into trouble if I do not have an EPC?
The government has said they will fine people that have a property for sale or rent that does not have an EPC. Fines of between €3,000 and €600,000 can be given to any person who requires one, but has not applied. This includes agents as well as private individuals.