Sales with deferred payment:
If it is common to resort to the mortgage loan to pay the price of a property sometimes depending on the circumstances the deferred payment may be another option.
It is not a theoretical problem in about six months we had three cases in the office, the first case is that of a house for vacation rental where the buyer had a part of the price and wanted to postpone the rest after the season. The term was a term of one year and the question was how to guarantee payment.
Another case was the sale of a house that was missing the end of the work due to the ignorance of the owners of the necessary formalities in Spain. At the time of selling the house was not registered, they had to do all the necessary paperwork to get the end of work, get the cedula and register the house. The foreign buyer also did not want to pay the full price if he did not have all the papers and the sellers want to make sure they received the deferred price.
The third case was of a client looking for a property to reform to make a petit hotel, he wanted to enjoy the property paying a rent and be able to reform and write it within 3 years, this operation does not consist of a term sale because it always fits the possibility for those who benefit from the option to desist from this, we must know that this type of contract is also used but it is not a sale but a rent option with different consequences (we will look at another topic of the blog )
In these two real cases, solutions had to be offered.
The buyer and the seller can lovely people , when we speak about money there is no friend. From this observation arises the need to guarantee the payment of the deferred part.
There are several ways to do it:
The guarantee is a guarantee operation for which the guarantee is the payment of an amount owed by the buyer in front of a third party, in our case the seller.
guarantors can be a physical person who answers with his patrimony or can be a bank guarantee.
The guarantee represents a risk for the guarantor. We have seen many people put their endorsement to allow a family member to buy a home without really understanding the consequences of the operation. For me you don't ask to family to be your guarantor because then this can create conflicts if the payment problems arise.
The bank guarantee is a guarantee operation for which the guarantor bank responds of the payment of the amount owed in front of the seller
It is a risk that implies that if the buyer fails to comply with the payment, the bank will require the customer to reimburse the amount already paid by the bank.
The financial guarantee is finalized before Notary, the bank assumes the risk and instead receives a commission function of the type of risk and the term.
It usually charges a commission of around 0.5% and quarterly interest around 1%. The cost of the notarial deed is 0.3%.
To grant this type of guarantee to a client, the bank claims certain guarantees that may be personal or real. So sometimes there is a need to pledge money or securities as a real guarantee of the guarantee that the bank gives us.
Or that the amount in cash is left in the bank, most of the time in a forward account.
Or that we have in the bank values ??of fixed rent (better) or variable (less safe) to guarantee the payment.
In principle, the client can dispose of interest or dividends if they are shares.
It is evident that the agreed upon guarantee will be more important for a cash in cash than for securities that involve risk.
The real guarantees:
They give a feeling of more security to the seller but you have to analyze it
First of all we think about the mortgage, the mortgage is a guarantee that sounds to everyone, we know that if the buyer does not pay the seller will be able to execute the mortgage.
The mortgage is a real guarantee on a property *
The mortgage is fast
You can mortgage another good that the good bought in guarantee of the payment
You have to register it
But when it comes to executing it, it is important to say that this can take years of judgment to get the good to go to auction, it is a good guarantee but there is always a risk, although at times minimal that things go badly.
Another option that is contemplated in many cases the resolution clause
The expressive resolution clause is a clause that will allow in case of non-payment by the buyer of:
return the property to the seller
restitute the price to the buyer, in practice it is often common to include in the initial contract a clause that says that the seller was left an amount X in concept of damages and losses caused.
the clause has a cost:
TPAJD expenses on the total amount covered by the registration expenses condition it is important to take into account that the cancellation of the resolution condition is taxed by the same taxes and generates the same expenses It is very important to warn the client that if in theory it seems to be a very good option , first it has an important cost and second is not so easy to execute, because what happens if the seller does not have the money to return it to the buyer? Again we will be in judgment ... Some prefer to this a very efficient practice in the case of sale of furniture that is the reservation of ownership. In furniture sales the guarantees in invoices that say "the goods remain the property of the seller until payment" are very frequent. Some have thought to extend it to the sale of property. In the German law the BGB recognizes it in article 925, in French law it could also exist according to article 2367 but in practice the truth is that it is not used because of the problems it would entail. The transfer of the house is postponed until full payment. The good is left to the owner's name, then the IBI belongs to the owner. If the owner is left, the problems must be prevented by describing in the contract the consequences related to the risks, the works and everything that could affect the property.