A example of reservation contract

Introduction

The journey of buying a holiday home in Spain for foreign investors is akin to navigating uncharted territories. The reservation form serves as the initial compass that guides this adventure. It’s the first formal step that secures the buyer’s intention to purchase a property, setting the stage for the legal and financial processes to follow. Given its importance, a thorough understanding and evaluation of this document are paramount.

Reservation form of property XXXXXXXXXXXXX, in favor of

XXXXXXXXXXXXXXX of xxxxxxxxxxx nationality, with xxxxxxxxxxxx, and home address xxxxxxxxxxxxxxxxx

HOUSING indicated with the number xx, floor xº, typology x  of Block XX and the Parking Space number xx  a surface area of  XX,XX m2 the house and of XX,XX m2 of parking space.

HOUSING PRICE:

EUROS (xxxxxxxxxxx €). To this amount is added the amount corresponding to the Value Added Tax (VAT) at the current rate of 10%.

PAYMENT METHOD AND DEADLINES…

• SIX THOUSAND EUROS (6,000.00.Euros) paid as a deposit or deposit, which are acknowledged received by the seller, granting an effective payment letter with the signing of this contract by deposit or transfer to the special account of Banca MARCH, IBAN: XXXXXXXXXXXXXXXXXXXXXXXXXX BIC: XXXXXXX opened in the name of XXXXXXXXXXXXXXXXXXXXXXX, for which collection and credit to the account of this, the present sale will be deemed perfected and will begin to produce its effects.
• Before the date of XX of XXXXX 2024: The amount corresponding to 30% of the price plus the corresponding VAT (xxxxxxxxxx euros) by deposit or transfer to the special account of Banca MARCH, IBAN: XXXXXXXXXXXXXXXXXXXXXXXXXX BIC: XXXXXXXX opened in the name of XXXXXXXXXXXXXXXXXXX, for which collection and credit to the account of this, the present sale will be deemed perfected and will begin to produce its effects.
• And the remaining amount until completing the total price and its corresponding VAT, once the works are completed and the keys to the home are made available to the buyer, by bank check made by a Bank or Savings Bank with an office open in Spain, procedures which is expected to be completed by XXXXXXXXXXXX, 2025. It is agreed that, in the event that the home is completed before that date and the keys to the home are made available to the buyer, the purchasing party undertakes to appear at the act of receipt of keys with payment of this pending amount plus its corresponding VAT and, with the granting of a public deed in your favor, within a maximum period of 20 calendar days counted from the day in which XXXXXXXXXXXXXXXXXXXXXXXXXXXX notifies you of the completion of the works.
• Third.- DELIVERY OF POSSESSION AND INTEREST.- The completion of the works is initially set for XXXXXXXXXXX**, 2025** and the keys and possession of the home being transferred will be made available to the purchasing party within a maximum period of twenty days from the issuance of the certificate of completion and request for municipal authorization for its occupation (Certificate of Habitability, Declaration of Responsibility or equivalent document), and this provided that the purchasing party has fulfilled all of its obligations. But in the event that the home is completed before that date and the keys to the home are made available to the buyer, the provisions of the previous paragraph will apply. In no case will the seller be attributable to any delay in the completion and delivery deadlines that is due to delays in the granting of administrative authorizations, strikes in the sector or the presence of just cause or force majeure.-
• And the remaining amount until completing the total price and its corresponding VAT, once the works are completed and the keys to the home are made available to the buyer, by bank check made by a Bank or Savings Bank with an office open in Spain, procedures which is expected to be completed by XXXXXXXXXXXX, 2025. It is agreed that, in the event that the home is completed before that date and the keys to the home are made available to the buyer, the purchasing party undertakes to appear at the act of receipt of keys with payment of this pending amount plus its corresponding VAT and, with the granting of a public deed in your favor, within a maximum period of 20 calendar days counted from the day in which XXXXXXXXXXXXXXXXXXXXXXXX notifies you of the completion of the works.

Bills:

All expenses, fees and taxes arising from the sale are borne by the purchasing party, except for the Municipal Land Value Increase Tax (Plusvalía), which will be borne by the seller.

In accordance with the regulations governing this matter, the return to the purchasing party of the amounts on account delivered by it for the purchase of the home during the construction period is guaranteed, through a surety policy signed for this purpose, as joint guarantor, by authorized entity for this.

This is how you sign and accept,

Signed

BUYERS      VENDOR

PROCESSING OF PERSONAL DATA. In accordance with Organic Law 15/1999, of December 13, on the protection of personal data, the purchasing party gives its consent for its data to be incorporated into the computer files of the selling company, which will keep them confidential. , without prejudice to mandatory communications, and also authorizes the data to be transferred to the financial entity designated to receive the advance amounts.

The buyer may exercise the rights of access, rectification, cancellation and opposition in accordance with the provisions of the aforementioned Organic Law on Protection of Personal Data and other regulations applicable to this purpose.

Examination of key components

1. Reservation in Favor of: The form begins by identifying the buyer, including nationality and address. This personalization ensures that the agreement is tailored specifically to the buyer’s legal standing, which is crucial for enforcing rights and obligations.
2. Housing Description and Price: Detailed information about the property, including its size and the allocated parking space, lays a transparent foundation for the agreement. The inclusion of VAT in the total price is a legal requirement in Spain, reflecting the form’s compliance with local tax laws.
3. Payment Method and Deadlines: The structure of payments is clearly outlined, starting with an initial deposit, followed by a substantial payment before a specific date, and concluding with the balance upon completion. This staged approach aligns with standard real estate practices in Spain, offering a clear timeline for financial planning.
4. Delivery of Possession and Interest: The anticipated completion date and the conditions for possession delivery are critical. They provide a timeline while also detailing the protocol for early completion. This section importantly stipulates that delays due to external factors like administrative or force majeure events won’t be attributed to the seller, which is a fair clause protecting both parties.
5. Bills and Expenses: Clarifying that the buyer is responsible for most of the taxes and fees, except for the Plusvalía tax, is standard in Spanish real estate transactions. This clarity helps avoid future disputes over financial responsibilities.
6. Guarantees for Payments: The assurance through a surety policy is a significant protective measure for the buyer, ensuring the return of payments if the construction doesn’t proceed as planned. This aligns with consumer protection laws in Spain.
7. Processing of Personal Data: Compliance with data protection laws is crucial for maintaining the confidentiality and security of the buyer’s information. This clause reassures the buyer of their privacy rights and aligns with EU regulations.

Due Diligence recommendations

• Legal Verification: Ensure that the reservation form complies with Spanish property law and the specific regulations of the autonomous community where the property is located.
• Financial Planning: Review the payment schedule and ensure readiness to meet the financial commitments, considering currency exchange rates if applicable.
• Property Verification: Conduct a thorough due diligence of the property, including its legal status, any debts or charges against it, and the developer’s reliability.
• Insurance: Confirm the details of the surety policy, including the insurer’s credibility and the coverage extent.

Conclusion

The reservation form is akin to embarking on a space journey; it marks the launch of your adventure into the Spanish real estate galaxy. With careful scrutiny and the right guidance, you can navigate this voyage confidently, ensuring a safe landing into your dream holiday home.

“Just as astronauts rely on meticulous preparation and the right support systems for a successful mission, so too should foreign buyers approach the reservation of a holiday home in Spain with expert advice and due diligence.”

Navigating the complexities of purchasing property in Spain requires a comprehensive understanding of the legal landscape, akin to charting a course through the vast expanse of space. Armed with expert knowledge and careful planning, the journey to owning a holiday home in Spain can be a fulfilling voyage of discovery.