Contract - Page 2

Well, first thing that should never be done. The Estate Agent is never the right person to keep a deposit, this kind of payments should always go via solicitor and be held by them until completion. In case anything goes wrong, that is your garanty that the deposit can be handled in an acceptable way.

On the other hand, I don't think that legally you have a great chance to pull out of the deal without loosing your deposit anyway. The contract you have signed is a legally binding document and there are ways to fulfil your contractual obligations even with travel restrictions in place (power of atorney) and I think that your solicitor should have advised you about all that and should also be able to advise you about the options with the contract. (I hope you do have a solicitor that is independent from the Estate Agent).

It’s sad to read that you are prepared to renege on a deal you have made in the hope of getting a better deal financially. If I were the vendor, I would be horrified with your attitude. How would you feel if you were the seller?  I grew up with the word HONOUR in my vocabulary.  Decency is another word.  Clearly you want the property but now that people are dropping their prices, you are prepared to back out and buy cheaper nearby or elsewhere. As I have said before, anyone believing that they can make a profit in Spain is only fooling themselves. I always advice people to hold tight to their home in the U.K. as they will be guaranteed that it will increase in value. 

Do unto others as you would unto yourself. 

Thanks for reply 

And your opinions on the morality of life 

What I was asking nothing more nothing less is the original contract nil and void 

And if so am I legally able to get my deposit back 

Hi there

And perhaps if that’s all you’d asked, instead of sharing the “why” you wanted to know, then that’s probably all members would have replied to. You chose to share the “why” and of course, others will have their opinion of that 🤪🥂

Hi bhambulls,

Which "deposit" have you paid?  The so-called "reservation fee", or one of the legally binding contracts, such as a Private Contract or Deposit Contract?  In both these cases you would have paid a deposit equivalent to 10% of the purchase price.  If the latter, the only way you'll be entitled to the return of your deposit is if the seller has frustrated the contract.  You have already said that is not the case - Covid has frustrated you both.  

Notwithstanding the moral issue of what you propose, walking away from the deal and buying a different property is one matter, but to renege on the original deal and try to renegotiate the purchase of the same property would be very risky, not least because it would alert all parties concerned to your motive and could result in the vendors pursuing you to the full extent of the law.

Also, I assume you are aware of Complementary Tax?  If applied retrospectively, this could result in negating any additional saving you may be able to renegotiate on the purchase price.

Kind regards,

Kim

Complementary tax enlighten me 

https://blog.abacoadvisers.com/myth-busting-spanish-complementary-tax/

Hi bhambulls,

Just to add to the Abaco Advisers link that Lancelot has posted: the example used in "Myth Five" is for a property in Murcia, hence the Spanish transfer tax rate of 7%.  You don't say where you're proposing to purchase, but as your location is showing as Almoradi, which is in the autonomous region of Comunidad Valenciana, please note that the property transfer tax rate would be 10%.

Kind regards,

Kim

Whilst tax is generally a bad thing, as a rule of thumb it's got to be better to pay the least you can for a property. 

Even if you end up paying 10c in the EURO for what you save you still save 90c in the Euro meaning the tax does not negate the saving, unless I'm missing something?

I think a number of posts on this thread have suggested that you speak with your abogado on this - they are the best placed to advise you on any proposed course of action and what you may be exposed to as a result.

They are the qualified independent professional who are the only one who have your interests at heart in the property purchase transaction. If you have not got independent legal advice to support you in either the purchase you ultimately choose to go with or in extricating yourself from it, you should.

On the tax point, I think broadly speaking what Lancelot is saying is correct (noting they can charge interest) - I would also imagine that if there is deemed to be wilful avoidance (i.e. tax evasion)  - through whatever means - then the tax authorities will also hit you with a material fine and criminal prosecution.