2010-06-17-Property Not Registered at Land Registry

2010-06-17  EWN

SHOULD we continue with the sale if we find out the seller did not register the property?

Q.- We have just found out that the person with whom we signed our private purchase agreement never bothered to register his title to the property and, consequently, he only has another private contract of sale.

The previous owner will accompany us to the Notary's office to sign over the deeds. Until now all agreements have been made with the person we assumed was the "vendor".

The solicitor we engaged never informed us of this; we have been recently informed by the real estate agent. We would like you to confirm if we are in time to withdraw from the sale or whether it would be wise to proceed since we paid a deposit to the person who has the contract of sale and not the registered owner. Would we be refunded the deposit if we withdrew?

A.- Unless the contract expressly states that the person you are buying from is the registered owner you cannot withdraw from the sale since it would be considered a breach of contract. The reason is, that according to the Spanish law, registration of a property in the Land Registry is not compulsory and, therefore, your Vendor' is acting lawfully.

On the one hand,the registration of the property provides protection to the purchaser and that is why lawyers should always advise to register the properties. 

On the other hand, the Vendor who seems to have only a "private purchase contract can pass ownership directly without any legal restraint.

This situation used to be more or less common in new developments where properties were sold prior to completion. Nevertheless, you should have certainly been informed. If you wish to know for sure who is the registered owner, you can apply for a land registry certificate, and act accordingly.

The jurisprudence regarding this states that the owner does not need to be the public owner at the moment of committing to a sale, he simply needs to be able to become the public owner and be able to pass ownership.

ABOGADOS MB MARTIN is an independent legal and tax advisory firm, providing advice in all major areas of Spanish law.---More information is available from the website: www.spanish-lawyers.info