Do I need a solicitor to help me sell abroad?

Best known as a presenter of Channel 4’s A Place In the Sun, leading property expert Jonnie Irwin has helped countless buyers purchase property all over the world. Formally a surveyor with a professional background in commerical real estate, Jonnie is also Commercial Director of AIPP Legal Members and International Property Lawyers, Judicare.

Here, Jonnie answers a question we often get asked at AIPP by people looking to sell, rather than purchase, a home abroad.

“Whenever I’m helping someone purchase a property in Spain I’ll ask who the sellers solicitor is and all too often I’m told that the estate agent will be dealing with it. Even in the Judicare office, we regularly get people contacting us to draft up a Power of Attorney for a sale of a property in Spain. Normally the seller wants to grant a Power of Attorney to the Estate Agent to sign the Sale Deeds on their behalf. This always baffles us – you would always use a solicitor to help you sell a property in the UK so why should it be any different abroad? The answer from the other side of the phone is invariably the same – as long as I get my money what can go wrong?

Well quite a lot really as a recent call showed.

The lady in question called quite distressed and frustrated. She had sold a property abroad about a year ago but still hadn’t received the sales proceeds. The Estate Agent had signed the Title Deed on her behalf but hadn’t transferred the proceeds of the sale and was citing “Money Laundering Checks” as the reason for this.

Alarm bells started to ring!

If there was Money Laundering Checks that needed to be done by the Estate Agent, these could have been done prior to completion. Even if they were started after completion it would not take 12 months to complete. This seemed to the client to be an excuse not to transfer the sales proceeds to her. Her suspicions were compounded by the fact that for some reason she didn’t understand that the sales proceeds were split into two cheques and one of them was made out to the Estate Agent personally. Everything that she told us sounded like the Estate Agent was keeping hold of the sales proceeds and was finding excuses not to return it to the client. She finally had enough and rang us to see whether we could recover her money for her.

This, it has to be said is an unusual situation, and whilst the majority of estate agents are honest, sometimes things like this do happen. We have seen situations where a dishonest estate agent has acted for the seller on the Deed and has actually sold the property for a price higher than the seller thought was the case and then has pocketed the difference plus, of course, the commission owed to them. Unless the seller checked the Deed after the event they would never notice this.

These two examples are extreme but are genuine examples of what can happen when you don’t use a lawyer to help you with the sale. In these cases the person taking advantage of the seller was an Estate Agent but this could equally happen with a neighbour or somebody else.

Aside from this, there are other very good reasons why you should use a lawyer to help you sell a property abroad. A Solicitor will be able to advise you on the best terms of the Sales Contract. If the purchaser is using a lawyer to help them buy and you don’t have a solicitor helping you to sell then it is probable that you won’t get the most favourable terms in the contract, which could mean that you are responsible for costs that you shouldn’t otherwise be responsible. It could even mean that if the sale falls through you are disadvantaged in terms of how much of the deposit you have to return to the purchaser. A lawyer acting for you on the sale will protect your interests in this respect. They will also know exactly what to do if there are any problems during the transaction.

A good solicitor may also help you save money on the sale. Structuring the sale in different ways may mean that you could end up paying less Capital Gains Tax. Furthermore is somebody else going to advise you on Capital Gains Tax or, for example, claim back the Tax Retentions in those countries that have them?

So yes, on the face of it a seller only wants their money, but not using a lawyer to help you sell a property abroad may mean that you don’t get as much of your money as you should have or maybe even at all. Why take that risk?“

Our thanks for this article to Jonnie Irwin, Commercial Director of AIPP Legal Members, Judicare

Contact Judicare on 01483 382 058 or email admin@judicaregroup.com