Code of Ethics
For the AEGI Code of Ethics, click here
The government of Spain abolished its licensing laws in June 2000. The industry is currently unregulated and licenses titled “API” (Agente Profesional Inmobiliario) are no longer valid but are recognized by the public as a high education standard for real estate.
Various organizations are lobbying for standards in the industry but in general there are no restrictions on practicing real estate. Foreigners in Spain are permitted to enter into real estate transactions. Any transaction in Spain must be done in conjunction with a registered notary who can ensure that transaction is legally valid.
No minimum educational requirements are in place though AEGI, although it has a collaborative agreement with UNED, an education provider that improves baseline understanding of skills for Spanish real estate practitioners.
Foreigners are permitted to own property in Spain and are granted the same rights as Spanish nationals. Fee simple ownership is permitted.
Land Registration System
The Public Registry system in Spain requires that title, whether in trust or in fee simple ownership, must be registered in order to give notice to third parties as to the interest in the property. A certificate can be obtained from the Public Registry in the municipality where the property is located. This will provide information as to encumbrances on title. Title insurance is just beginning in Spain, with Stewart Title working to develop this concept on a broad basis. It is projected that title insurance will be popularized by the numerous British citizens owning property in Spain.
Other industry professionals
Some lawyers are involved in the promotion and sale of real estate as a specialty, as are certified public accountants. A law or an accounting degree, however, is not a requirement for selling real estate in Spain.
All deeds transferring title to real property must be executed before a Spanish Notary Public who is a quasi-public official appointed by the governor of the state in which the Notary Public is practicing his profession. The notary must be an attorney and is responsible for the legal form of the deed, as well as the tax declarations which are required when a foreigner is involved as buyer or seller.
An appraisal made by an appraiser appointed by the local municipal government is also a requirement of transfer in many parts of the country.
The real estate agent is prepared to list and promote property for sale. Increasingly, agents use the Internet for marketing properties. Separate buyer and seller agency is not common in Spain, and most agents represent both parties. The foreign agent who wishes to represent his/her buyer should obtain a written agreement with the listing agent outlining duties and responsibilities of each agent and determine the method of payment of commission and amounts, at the beginning of the negotiations
Property Marketing Systems
On-line multiple listing systems (MLS) are used in limited areas of Spain and it is hoped that usage and cooperation with other agents will increase. Some property marketing systems include the AEGI portal as well as a network called ComprarCasa. AEGI is collaborating with the National Association of REALTORS® in the United States to implement a national MLS.
At present Spain does not have a national referral system, or an official referral policy. Multinational franchises, such as Century 21 and RE/MAX, encourage transnational referrals but success is limited at this point since many Spanish practitioners are not yet accustomed to representing different parties and sharing commissions. Members of AEGI are more accustomed to referrals since many represent large multinational franchises.
Relationship of Buyer/Seller to Practitioner
Separate buyer and seller agency is not common in Spain, and most agents represent both parties. The foreign agent who wishes to represent his/her buyer should obtain a written agreement with the listing agent outlining duties and responsibilities of each agent and determine the method of payment of commission and amounts, at the beginning of the negotiations.
More generally, relations between the Spanish public and real estate professionals are generally not very positive. Spanish public opinion is fairly negative towards practitioners, but AEGI is working to alter this perception.
The real estate agent generally works on a commission basis, not a salary. Commission is generally paid by the seller at the time of the buyer’s signing of final documents at the Notary Public office. It is important for cooperating agents to obtain a written agreement with the seller’s agent prior to closing of the transaction.
Escrow (Handling of Trust Funds): Traditionally, the buyer and seller have met at the Notary Public’s office to sign the deed and to exchange funds and deliver possession of the property. With increasing sophistication in the marketplace, some agents have established trust accounts and manage third party funds for release upon the performance of conditions. Currently no bonds or errors and omissions insurance are available in Spain to protect these funds. Some companies in the country have established escrow services as third party neutral agents, and certain U.S. title insurance companies are now offering escrow services through their U.S.-based escrow accounts when used in conjunction with the issuance of a policy of title insurance.
Since agent management of third party funds is a new area in Spain, foreign parties should check carefully on costs, operating procedures, and the reputation of those who will be handling the funds in a transnational operation.