This is a legally binding contract between both parties, provided that the local notary verifies all signatures. Upon the signing of such a contract the purchaser pays a deposit, which is normally 10% of the agreed purchase price. This is a non-refundable deposit unless specifically stated to the contrary in the contract. If the buyer breaks the contract he loses the deposit. Likewise, if the seller should default he is legally obliged to return the deposit plus compensation which is normally equal to the deposit paid. It is perfectly acceptable for the buyer or seller to request copies of the promissory contract translated into their mother tongue. This contract covers a number of key points which include the following:

• Confirmation of the exact identity of the buyer and the seller
• Exact description of the property
• Confirmation of the clear title of ownership
• Agreement for a deposit to be paid and the terms if the contract is broken
• Confirmation of the official validity of the contract
• Confirmation of the completion of sale date

Before this promissory contract is signed the vendor has to produce all the relevant paperwork relating to the property for the buyer or his lawyer. All of these documents then have to be checked and searches made to verify the information. These include the relevant extract from the local land register, an up-to-date copy of the caderneta predial for the payment of rates, and the habitation license, which confirms that the property has a residential licence.