A recent Supreme Court ruling of 15 November 2021 has sent an estate agent to prison for fraud for having drawn up a fraudulent earnest money contract (arras) in order to obtain a deposit of €6000 from prospective purchasers. 

Specifically, the High Court considered it proven that the agent signed a contract with the buyers for a property whose owners had rejected  the purchaser’s offer and, moreover, had deposited the money into his account and used it for purposes other than those related to the prospective sale.

Sadly, this type of case is not unusual and so, once the decision to buy has been made, buyers can avoid losing their deposit with a few simple precautions:

1: Ask the owner’s representative or the estate agent for a simple informative note from the Land Registry to check the ownership of the property and any charges entailed on it;  

2: Ask the owner’s representative for the Power of Attorney under which they are acting; 

3: Ask for a copy of the arras contract to review prior to signing it;

4: Consult a wholly independent qualified professional (abogado);

5: Do not pay any deposit until the abogado has reviewed the documentation and once they are satisfied, ask the agent to have the vendor sign the contract first, on all pages and attaching a copy of their or their representative’s ID.

Always bear in mind that many vendors put their property up for sale with several estate agencies at the same time and it is essential to obtain proof of the owner’s acceptance of the offer before paying the deposit, however much an agent insists that a deposit has to be paid urgently on the grounds that someone else is interested in the purchase.

Author: J. Escobedo

I am a member of the Tenerife Law Society since 1989 with a dedicated team for anyone who needs an immediate answer or long term solution to any practical or legal issues appertaining to any property or business investment in Spain. If you have decided to move to Spain to start a new life, whether that´s buying a property or a business, then you will definitely need the services of a good Spanish Lawyer who is fully conversant with Spanish protocol and who has a good command of the English language. I am based in the south of Tenerife and I am specialist in Property Law, Inheritance issues and taxes as well as Tenerife and Canarian law and a great deal more. ABOUT MY STAFF All my friendly and professional staff are fluent in English. We have been working for foreign clientes for over 30 years in Tenerife, providing legal advice and litigation services to all our clients investing throughout the whole of Spain and we pride ourselves on providing a high quality service to our clients in the form of clearer communication and advice.

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