Buying a home is the most important financial transaction for most families. However, the boom in the Spanish real estate market has brought with it an alarming sophistication of fraud. We're no longer just talking about fake advertisements, but about legal schemes designed for deception.
As lawyers specializing in real estate law, we've seen buyers lose their life savings by failing to recognize warning signs in time. In this guide, we detail the 7 most common scams and how to protect your investment.
1) Fake Owners and Identity Theft
It's one of the most dangerous scams. People present themselves as the owners of the property using falsified documents or taking advantage of the fact that the real owner lives far away or has died.
- How to protect yourself: It's not enough to just see the ID. It's mandatory to verify the actual ownership using an updated Property Registry Extract issued directly by the Land Registry within the last 24 hours.
2) Sale with Hidden Debts and Registered Encumbrances
Many buyers are unaware that in Spain, debts "follow" the property. If you buy an apartment with outstanding property tax (IBI), community fees, or even unpaid liens, you become responsible for them.
- How to protect yourself: Demand the community's zero debt certificate and check for tax encumbrances in the registry. Even those that appear in process (the "presentation entries").
3) Double Sale (Art. 1473 of the Civil Code)
This occurs when the seller signs contracts with several different buyers and collects advance payments from all of them without actually signing a deed with any of them, or signing a deed with only one of them.
- How to protect yourself: Register the public deed immediately and never hand over money without a preliminary sales agreement reviewed by a lawyer.
4) The Danger of Payment in "B" (Tax Fraud)
The seller proposes declaring a lower value in the deed and paying part of it in cash "off the books" to save on taxes.
- The risk: It is an illegal practice that carries serious tax penalties and complications in a future sale.
- How to protect yourself: Reject any payment that is not included in the public deed before a notary.
5) Urban Planning and Habitability Scams
Dwellings in buildings with major renovation works pending, without a first occupancy license or subject to expropriation or sealing.
- How to protect yourself: Conduct an urban planning inquiry at the City Hall, verify the Certificate of Habitability and access the Building Technical Report.
6) Fake Promoters and Phantom Real Estate Companies
Companies that sell properties "off-plan" receive the advance payments and disappear before starting construction or entering bankruptcy proceedings.
- How to protect yourself: Verify the legal existence of the developer and legally require a bank guarantee or surety bond.
7) Forged Contracts and Deeds
Use of documents or even impersonating a notary to give the appearance of legality to a non-existent transaction.
- How to protect yourself: As a buyer, the law gives you the right to choose the notary you prefer. Make use of that right.
Important note
It is crucial to understand that this is not a comprehensive list of all potential real estate scams currently operating. Fraudulent methods are constantly evolving and adapting to new technologies. Therefore, we strongly recommend exercising extreme caution when buying a property and not taking any legal or financial steps without absolute certainty that the transaction is legitimate.
In addition to protecting yourself from scams, it's also very important to thoroughly check the property documentation before buying. You can read our post What to check before buying a house in Spain: a practical guide for foreigners
Why is legal advice your best investment?
Most of these scams succeed because the buyer trusts the other party's "good faith." A professional scammer will always offer convenience and speed. We, as lawyers, will provide you with security and rigor.
What we do for you at MBT Abogados
- Complete audit of the property's registration status and encumbrances.
- Urban planning verification before the corresponding city council.
- Drafting and safeguarding the earnest money contract to avoid abusive clauses.
- Accompaniment until the signing at the Notary's office in the main cities of Spain.
In addition to these four essential steps to avoid scams, at MBT Abogados we offer a comprehensive advisory and support service for buying homes in Spain. Our team assists the buyer from the initial search to the signing at the notary's office, including:
- verify the condition of the property, the identity of the owner, that there are no debts, the registered description and limitations
- negotiation of the purchase price
- choice of notary
- obtaining the documents for signing at the notary's office
- review the reservation, earnest money, and purchase agreements.
- preparation of tax returns
- accompaniment at the time of signing
- any other function and advice necessary for the successful completion of the operation
If you feel you need assistance with the purchase or sale of a property, don't hesitate to contact us email or Whatsapp. Our headquarters are in Barcelona and we provide our services remotely throughout Spain.
——————————————————
Frequently Asked Questions (FAQs) / Real Estate Scams When Buying a Home in Spain
-
What should I do if I suspect I've been scammed?
Do not alert the seller. Contact a lawyer immediately to attempt to have the bank accounts frozen and file a report with the police or Civil Guard. Acting quickly is the only way to recover your money. -
Is it safe to buy with a "Nota Simple" that's weeks old?
No. The property registration status can change in minutes (seizures, encumbrances, or previous sales). The Nota Simple (property registry extract) must be from the same day as the signing or, at most, from the previous 48 hours. -
Does the real estate agency protect me against fraud?
Not necessarily. They are commercial intermediaries, not legal auditors. Most of their contracts disclaim responsibility for the veracity of the seller's documents. Only an independent lawyer can guarantee complete security. -
What does it mean for the seller to be in a great hurry?
This is the biggest red flag. The scammer uses pressure to prevent you from verifying the documents. Never hand over money under pressure without a professional confirming that the property and the seller are legitimate. -
How do I know if my money is safe when buying new construction?
By law, your contributions must be guaranteed by a bank guarantee or surety bond. If the developer does not provide you with an individual certificate of this guarantee, your money is at serious risk if construction is halted. -
Is it legal to pay part of the house in cash ("under the table")?
No, it's illegal and dangerous. You risk severe penalties from the tax authorities and paying significantly more in taxes when you decide to sell the property in the future. Furthermore, the cash is impossible to recover if the sale turns out to be fraudulent.
