Do you know what you are signing when purchasing an overseas property?

Warren Lewis
2nd June 2014

With many people hunting for the dream property abroad at this time of year, a salutary warning has been issued to have a proper translation of contracts.

Simon Conn is an overseas property and finance expert and has been in the business for nearly 35 years. He’s heard numerous horror stories about people who were relying on smartphones, websites and foreign language students to carry out the translation of their legal contracts.

Research undertaken by Simon has revealed that some people were prepared to either sign a foreign contract they do not understand or even worse, sign a version in their mother tongue without checking it was a correct translation of the original.

One example Simon cites is a Spanish legal document provided by an expert Spanish lawyer (who is used when purchasing a property) which was translated by both humans and online translation services to offer comparisons.

Although understandable, the automated translations were hard to read and much of the phraseology was awkward, disjointed and the words were not put into context. Several Spanish words remained untranslated.

Simon said: “The costs involved with buying a property overseas can soon stack up and some people might think they can cut costs by using a free translation service.  However, misunderstandings in the contracts at the initial buying stage could end up costing people a lot more in the long term.”

As part of an experiment conducted by Simon, an English-speaking Spanish tutor was also asked to translate the document. Several key words and phrases were missed.

“Although people might think it is safe to use a foreign language tutor, because they can understand both languages, realistically they will not have access to the experience or knowledge that a larger professional company would.  Of course, some might, but the majority will probably know very little about Spanish law or the formalities of purchasing a property.”

In this particular document, the Spanish word “censos” was included and normally means a survey (census), however in this context it was referring to a leasehold - two very different things.

Peter Esders, Commercial Director and Solicitor at the Judicare Group, said: “There were big differences between the human and automated translations, which could result in several complications for the buyer if the documents were signed.

“The incorrect use of the word “censos” in this document, could have a fundamental impact on the understanding of what is intended, meaning that the two sides to the agreement  could potentially commit to completely different obligations.”

The correct context of the word “censos” was only picked up by ABC Translations, a professional translation service with linguists who are proficient in over 90 languages and dialects.

When purchasing a property overseas the seller may recommend their own translation services or lawyers to assist you in the purchase, however this is not advised as they may be acting in the interests of the seller.

Simon added: “Legal contracts can feature very technical words and phrases that are alien to people purchasing a property. Therefore, when they receive the translated documents back, they may just assume they are okay and sign them.

“I would also strongly advise people to use the services of an independent lawyer who understands the law in their home country and in the country where they are purchasing. They can check any legal documents thoroughly and advise how it could affect buyers personally on both a legal and possibly tax basis.”

Dennis Phillips is an English solicitor with Sussex law firm Mayo Wynne Baxter and has over a decade of experience in dealing with international property law.

Dennis agrees that translations are necessary. In the context of long legal documents in another language, such as a set of Community Rules, it often makes sense to have a word-for-word translation of the rules prepared by a suitably qualified translator.

“Community Rules are those that govern your relationship with neighbours in a complex with shared facilities. They are fairly commonplace and the clauses are usually set in stone and non-negotiable. So, you need to know what is allowed and what is not to be able to decide if you can live with them,”

He does, however, add a word of caution: “It is often what the document does not say rather than what it does say that is most concerning, particularly when we are talking about an overseas purchase contract. Even the most commercially minded foreign property buyer cannot reasonably expect to know what should and should not appear in a foreign agreement.

Mr B is a case in point. He and his wife had set their hearts on a lovely property at the upper end of the market in Spain and contacted me after their viewing trip. By that time, they had already agreed a good price with the estate agent, and the agent had gone to the trouble of preparing a contract in both languages.

But the agent was putting what Mr B felt was undue pressure on them to pay a deposit. He was a successful businessman and his instincts were telling him he should really call on some professional help. His usual solicitor did not have the expertise to advise them so referred Mr & Mrs B to us.”

Dennis found that the translation was accurate, but a few issues immediately leapt off the page. The deposit was way too high and Mr & Mrs B were being asked to pay the deposit over before Dennis and his team had had a chance to carry out further legal checks. The agent’s contract was also worded in such a way that Mr & Mrs B would not have been legally entitled to back out, even if the results of their legal checks did not stack up.

“We immediately negotiated and secured a four figure deposit, rather than five figures, to reserve the property,” Dennis said. “We also re-drafted the agent’s contract to make sure our clients could get their money back if it was not given the green light following our title and planning checks. More issues came to light further down the line, but we were able to protect Mr & Mrs B’s interests, ironing out the problems and seeing the purchase through to a successful and safe completion.”
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