Getting the contract date when buying property

Buying a property in Malta has been a real whirlwind but we are nearing the end of the first part of the journey. I have the date to sign the final contract and get the damn keys!

Already we have gone through:

1. Initial bank meeting (are you eligible for a loan and on what terms)

2. Finding a property, make an offer, have the offer accepted

3. Signing Promise of Sale

4. Officially applying for the bank loan

5. Getting rejected

Delays to expect when buying a home

As I mentioned in the post about getting rejected from almost every bank in Malta, I finally got accepted by HSBC after weeks of waiting on a decision. So today we’ll talk about everything that happened since then.

Bank delays

I finally received the Sanction Letter (confirmation from the bank on the loan approval and the loan amount) in the first week in December. This was already late, as I had signed the original promise of sale on the property way back in August, but I was so happy to finally know this was going to happen. It took this long as I was rejected by all other banks due to my job title and even HSBC took their time during the application but did eventually approve the loan.

There were then further delays when it came to the bank progressing to the next step. A lot of time was spent waiting for them to allocate an architect, then getting the architect to come out to the apartment to review it. Finally we managed this in February. Had everything else gone smoothly, I could still have got the keys in time for the first promise of sale ending, but of course, that was not the case.

Issues with the building

This is another one that should have been noticed sooner, but unfortunately my architects did not pick up on it during the first visits. But ultimately the bank architect discovered that the apartment did not match the plans with the Land Registry. It transpired that the apartment was simply not built in line with the original plans, some walls were in different places etc and no one bothered to get permits for the changes. Not the contractors who built it wrong, nor any of the previous owners. It was lucky for me that it was spotted during this process, otherwise I’d have had this hassle myself in later years when it came to selling.

But this meant that the owner had to get the entire apartment regularised. We’re not talking one wall a bit too long, or the ceiling an inch too short, we’re talking the entire building having to be approved as it did not match the plans at all.

Then, of course, Covid hit, which slowed down the process further. But at the end of July, MEPA finally confirmed the regularisation.

You got the loan- now what?

Soooo much happens during the process of buying a home in Malta. So, you’ve signed the promise of sale and the bank has issued the Sanction Letter. Then;

• The bank architect will review the property and provide a report to the bank confirming the property is legal, matches plans, has all relevant permits and, in their opinion, is worth the amount of the loan

• Insurances: you will need to arrange life insurance and property insurance, either with the bank or another provider, as you wish

• Searches: the notary will perform searches on the property which means they investigate each owner and purchase since the building was created, to confirm that the current seller is actually authorised to sell it

Architect reports

The bank will assign an architect, which is one stage that can get delayed. It took a few weeks and a LOT of chasing to get the bank to assign the architect and pass his contact details. Then I had to arrange with him when he would go see the property, sending him all the relevant plans and permits some of which are provided by the seller, some of which I had to pay my own architect to locate. For example it cost me €170 to have my architect issue the lands registry plan and Schedule 8 forms, that the bank and the notary needed to proceed.

Insurances

This step also drove me mad. It’s impossible to do anything in Malta online. I had to wait for the banks to reopen after lockdown and to get an appointment for life insurance and property insurance. You also cannot do these in the same meeting, life insurance is with the bank (or, in my case, my account manager) and the property insurance is done via a loan manager.

Searches

Providing the notary receives the land registry plan and the schedule 8 from your architect, the notary can complete these searches quite early in the process. The older the building and/or the more times it has passed hands, the more work there will be to complete here.

Getting the contract date

Once the bank architect has provided them with the information they need and you have completed all of the insurances, the bank will complete Form A, which your notary will need to finalise things on their end. Then the notary and the bank will arrange a date to sign that contract.

I have no real idea what the signing of the contract will entail- do I need to pay the tax at this point? Do I pay the notary fees and how much are they? Does the bank make the transfer to the seller at this point? Will I 100% get the keys during this meeting?