As summer holidays draws to a close and we drift into September, the familiar routine returns and autumn seems just around the corner. You might be thinking wistfully about your holiday and maybe even buying a property abroad. If so, you are not alone, believe me!
Many of my clients make enquiries about buying overseas shortly after making a trip – it’s only natural to follow up on the idea that struck you when you were away from home. However, if you are thinking of buying overseas there are some common pitfalls, which, if you are aware of, could save you both a huge amount of heartache and avoidable expense.
First of all – contracts. The dreaded paperwork could hide all sorts of issues, if you are not thorough. When buying abroad you may only receive one contract in the local language, in which case, you MUST get a professional translation completed. I know of cases where people haven’t bothered and, well if this is the case, then you only have yourselves to blame if something goes wrong! If you are given two copies of a contract, including the original and a translation, then get the translation checked by a professional. Don’t skimp by getting a cheap translation done.
You need to ensure that the translation does not contain any errors, omissions or additions, otherwise you could be unwittingly agreeing to extra conditions or charges not covered under the original contract. One simple check is to see that any translation you are given has the same number of paragraphs as the original. If not, then there is almost certainly a problem.
Time constraints may prove to be an issue with some contracts too. In some countries, conditions are set at the time you sign a sales contract, which mean you must either pay certain amounts of money at set times, or complete the transaction within a defined period. Time constraints may be set due to national laws, rather than a developer’s or agent’s timeframe.
Some of the conditions set are unreasonable and do not take into account delays which may be beyond your control. For example, if the property is still being built, there may be construction delays, or if you are applying for a mortgage to purchase the property, you may encounter financial or valuation difficulties.
If finance is essential to enable you to purchase the property, then please ensure any contract you sign states that all monies/deposit are refundable in full, if finance is not forthcoming.
I would advise that you research a developer’s or agent’s earlier work to see if they have previously met their own deadlines. It wouldn’t be a bad idea for your independent lawyer to obtain financial references on the developer, to ensure that they have the cash resources to complete the construction of the development. He/she could also establish what compensation you would be entitled to, if they do not meet the agreed timescales.
The last thing you want to happen when you are buying overseas is to lose your hard-earned deposit. At the time of signing the sales contract, developers or agents may set dates when a holding deposit or larger stage payment is required. One of my pet hates – and this happens quite often – is the lack of a cooling-off period or restricted timescales, beyond which you are unable to withdraw from the contract without losing your deposit. I personally would like to see cooling-off periods of up to 30 days as standard. Cooling off periods currently apply for timeshare in some jurisdictions, so why not for outright ownership?
Before parting with any cash, ask your independent lawyer to check the contract for clauses that become applicable if you decide to withdraw from the purchase. Ask for a cooling-off period of at least 14 days. This will give you plenty of time to return to your home country and seek other professional advice before proceeding any further.
Beware if you are paying for any holding deposit by credit card. Make sure that the developer or agent is not utilising your rights under the credit card laws regarding refunds, to avoid giving you a cooling-off period.
Contracts, paperwork and payments represent some of the common apprehensions of many buyers, but if you are sensible and get professional, independent advice before proceeding, then they need not represent a problem.