Retentions on house sale/purchase

[tjtops]

Can a buyer's lawyer legally demand an extra retention on the purchase price 'in case there are any unpaid utility bills'? And if so, how much?
Someone who 'works in real estate' told me this morning that it's the 'law' and they can withold 2,500 euros....
I am seething because there ARE no flipping unpaid utility bills...everything is bang up to date...even IBI. I was even going to play the white man and take a meter reading on the day, get an estimate from Sevillana and pay the buyer what it said..
I obviously already 'lose' 3 per cent to the hacienda..time will tell if it can be clawed back...and now, with five days to go, my buyer's lawyer has hit me with this?
Can this utter nonsense be true??? And how/when the blazes do I get it back??
Just because I'm paranoid doesn't mean they aren't out to get me.....

[Beachcomber]

It is the job of the buyer's lawyer to check that there are no unpaid utility bills outstanding. Wanting to retain funds 'in case there are some' is nothing less that absolute laziness and, in any case, is a matter of mutual agreement not 'the law'. The only justification could be that there may be a backlog of IBI due to the revaluation of your valor catastral and there may be an electricity bill in the pipeline so it might be fair to leave your bank account open until it has been paid and then divide it up according to the dates to save the buyer a problem.

Anyway, this is something for your lawyer to handle but if it comes to the point that you need to agree to a further retention so as not to lose the sale insist that it is written into the escritura. This will give you more security when it comes to the point of trying to reclaim it.

As far as the tax retention is concerned, it is not a matter of 'time will tell' whether or not you get it back. Your lawyer knows all of the figures and your current fiscal situation. He should be able to tell you whether you will be able to reclaim some or all of the retention.

[tjtops]

Ah....thanks Beach -- as always! ( )...
So....it's not 'law' then that he HAS to retain 2,500 euros?? (Just goes to show how these urban myths go round...this was straight from someone who 'works in real estate so I know'.(quote().....

You're quite right about the IBI issue and I have agreed to pay it ( )...fair cop. Thing is of course, I can't physically pay it without a bill and although my guy has managed to get the figures from the Town Hall, of course there is no bill yet!

What I AM objecting to is him witholding any more than that......as I said, I will give them the amount estimated by Sevillana.....or agree to that and no more.

Ref tax retention....yes...he is going to reclaim it for me...just I don't believe ANYTHING here until it is in my hand!

[Beachcomber]

A friend who sold a property was in a similar position regarding an IBI backlog the amount of which could not be ascertained at the time of the sale as the town hall was way behind in its work. He agreed to an estimated amount being retained which, once the payment came through, turned out to be less than half the amount retained.

The purchaser stated that she had been told by 'a friend in real estate' that the retention was hers and that she was entitled to keep anything that was left over once outstanding amounts had been paid. Luckily I had insisted that the matter of the retention be included in the escritura and after we put some pressure on the purchaser she agreed to refund the unused portion of the retention which had been made.

These words sound familiar but I make no apologies for saying it again, be very careful that you don't get taken for a ride.

[tjtops]

As an update.....in the end, it all went through..and have to say, my lawyer was an absolute superstar -- amazingly, there ARE some good ones out there!!

[DavidSearl]

FROM DAVID SEARL

FOR TJTOPS AND BEACHCOMBER

All correct as Beachcomber cogently notes. We are pleased that your lawyer was a star and all went through as desired.

For your files, ask now to see your lawyer or accountant's preparation of Form 210, which will declare the exact amount of capital gains tax you pay on top of the three per cent withholding tax or the amount you wish to claim back. Ask also for a copy of your buyer's Form 211, on which he declares that three per cent as paid to the Tax Agency. Just to be sure.

In fact, the Notary should not have cleared the sale without seeing that Form 211.

Did you check with the "Oficina Liquidadora" to make sure the Tax Agency will accept your declared price?

Good luck with it, David Searl

[tjtops]

For your files, ask now to see your lawyer or accountant's preparation of Form 210, which will declare the exact amount of capital gains tax you pay on top of the three per cent withholding tax or the amount you wish to claim back. Ask also for a copy of your buyer's Form 211, on which he declares that three per cent as paid to the Tax Agency. Just to be sure.

In fact, the Notary should not have cleared the sale without seeing that Form 211.

Hi David
No....unless I request a scanned copy from my lawyer, I don't see how I can see anything now!
As for capital 'gain', like so many people I had a thumping capital loss....so surely this doesn't apply?
And there was certainly no sign of any other form at the signing that I could see..the cheque for the retention was given to the notary I think...

BTW no check about 'fair price' was made and to be honest, if they subsequently come back to the buyer at a later date saying the price was too low ........tough! (10 days before signing, the buyer announced she hadn't got a mortgage so hey presto, I lost ANOTHER 15,000k.....!)

Am just so heartily thankful to have finally escaped with a whole skin....mas o menos....

[Beachcomber]

In fact, the Notary should not have cleared the sale without seeing that Form 211.

Surely the 3% would not have been retained until the parties appeared before the notary to sign the escritura so he could not possibly have seen the form 211. Anyway, the purchasers have a month in which to pay the retention from the date of signing.