Buying houses in Spain with squatters inside: risks, price reductions, and the profile of those interested in this type of housing

A simple search on any real estate portal often reveals very high market prices given the current market situation, with limited supply and high demand. There is only one exception: apartments sold with squatters inside .

These properties are sold at a much lower price than usual. The Idealista website lists more than 20,000 homes whose owners acknowledge they are squatted. This isn't an investment for everyone due to the high risk involved . In fact, lawyers don't recommend this option for regular buyers.

Iñaki Unusain , a real estate personal shopper with extensive experience in the sector, is clear about the profile of these buyers: "They are experts in the market , they know it very well and they buy for themselves because there is a risk."

This professional points out that investors who consider this type of property follow three steps: "buy, renovate, and sell." He also explains that these are people who "know how to choose the right type of squatter."

Attorney Sandra Aurrecoechea of ​​Marín y Mateo Abogados, who receives inquiries about cases of this type, points in the same direction. "They've already investigated who's involved. They negotiate with them and look at the quality or condition of the property," she explains. She also emphasizes that these investors seek legal advice not so much to learn about the risks but rather to understand the procedures they should follow before embarking on the transaction.

Among the tangle of squatted homes, there's one particularly sensitive issue: squatters or "inquiokupas" who have been declared vulnerable . "If that's the case, they won't move in. Furthermore, these evictions are suspended until May 2028," says Aurrecoechea, who also points out that any such attempt to "force" evictions against protected individuals could lead to legal problems.

Although these are eye-catching listings, Ferran Font of pisos.com points out that on a website with nearly 400,000 listings, the number of those that specify that they are occupied is "relatively small." The main benefit of these transactions is that the price can be reduced "from 30% to 50% . In exchange for the much lower price, the risks are that, in many cases, "you can't go in to see it and you don't know the conditions."

Regarding the legal aspect, Arantxa Goenaga, a real estate lawyer and partner at AF Legis, emphasizes that the main problem with dealing with this type of property is that "you don't get possession, and you can't actually hand over the keys." She also points out that these types of squatted apartments are often in a rather deplorable state when the people move out, which later requires a new investment .

Goenaga emphasizes that these situations are now even more prominent due to the Housing Law: "It provides consumers with guarantees regarding the condition of the home." In other words, it's also a way of demonstrating the agreement of all parties before the sale begins. Regarding eviction procedures once an agreement has been reached, the lawyer highlights two main ones: the injunction and the ordinary procedure .

For the former, "a period of one year from the occupation is required, so in many cases you don't usually put it in writing." For the latter, "a corrective action is carried out." Likewise, if a legal action has already been initiated, the new owner "subrogates to the case and replaces the previous one in the proceedings."

On the other hand, investors must consider other legal issues. It's not enough to have done their research, as all the parties involved in this report point out, but " you assume debts such as property tax or the community property tax, where you also have to pay the current community tax and three years' worth of debt ."

"Banks don't usually offer mortgage loans; they usually use their own funds or ask for a personal loan," Goenaga adds.

Housing specialists also point to the effects the Housing Law has had on these transactions. Font believes that "the Housing Law has created a certain feeling of vulnerability among homeowners, which is pushing them to consider selling." These buyers must also have "significant liquidity and specific legal support."

Goenaga emphasizes in this regard that "regulations are increasingly restrictive regarding vacant apartments, which is why attempts to get rid of them are proliferating, while others come from foreclosures."