Do Debts from Previous Owner Stay on the Property You Purchased?



By MyraCecilia | Date 2017-10-07 | Views 1346


#community fees debts # debt passed on to new owner # does debt stay with house # expats duped into paying utility debts # IBI debts # plusvalia debts # utility debts #



For anyone who thinks the title could be an exaggeration, they only have to visit one of the threads on expat forums to know that the title is factual. Numerous homeowners have paid debts that are not of their making.

These posts are asking for advice on often legal matters but the responses reflect a growing phenomenon of inaccuracies from those who are commonly known as ‘bar stool lawyers,’ residents who gleam bits of erroneous snippets from within the foreign community and then regurgitate the falsehoods. These well meaning residents appear to have no idea that by circulating these urban myths are likely to cause distress and expense to many. What is equally as disturbing is the many recipients who will thankfully accept assumptions as advice even publicly thank those who happily perpetuate these inaccuracies. The public need to more discerning about the information they take as factual. The same then go onto blame Spain for the misfortunes that usually emanate purely from ignorance within our community simply due to taking advice from anyone without checking the facts or source.

So does the debt of the utility bills stay with the house and therefore passed on to the purchaser or new tenant? “No they should not”. The retort by many that this has happened to them is no justification whatsoever in stating that this practice is legal.

The providers of electricity and water are totally aware of their malpractices but, are as equally aware of the lack of knowledge within the foreign community and are able to continue to insist that, the debt from the previous titleholder must be paid before a new contract or change of name can be carried out. Once these companies know that a customer is aware that this is not the case, they will back down and provide the service.

Which debts are in fact passed onto the new owner? Below are a list of debts that unfortunately do remain on the property and could be referred to as a charge:

IBI. (annual rates). The town halls will insist that the new owner pays for this debt. In many cases you will be asked to pay the full debt outstanding. The office of ‘recaudacion’ has the right to claim for debt for the four previous years.

Plusvalia, (town hall tax on increase in land values). This debt if not paid by the vendor, will be passed on in full to the purchaser. The vendor should pay within thirty days from the date of signing the sale at the notary. Most locals pay this bill. The problem arises where some expats who sold and then left the country without paying the tax. Due to this, most of the purchasers lawyers, will ask to retain the amount due, at the notary.

Community Fees. The fees if not paid by the previous owner will become the responsibility of the new owner. A word of warning; The debt could go back for many years and the administrative office could send you the full debt, but by law, they can only collect the debt for the last three years. Example: A property is bought in September of 2013 with a debt going back to 2008, what must be paid: By law the community can charge for 2013 and previously 2011 and 2012, three years.

Most purchasers will have used a legal representative. Checks should be carried out with due diligence so all debts are paid before the signing at the notary. The last bills should be provided and the balance agreed on between the two parties. Be aware that even with a certificate from the community stating that there is no community debt, checks should be made to see if there are any other costs pending such as repairs or renovations which need to be paid at a latter date by the community of owners.


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