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What is a "Reconocimiento de Deuda"?

Property Law

Antonio Flores Vila

25th of June 2002

Q. We are in the process of purchasing a property in Majorca, the estate agent has advised us of the "Reconcimiento de deudas" which in this case amounts to 8.988 euros. Could you explain what this is, and is it normal practice to add this to the advertised purchase price?

John Anderton
Wigan Lancs

    A. This is the first time I have seen that a property is being advertised together with a legal concept.

    A "Reconocimiento de Deuda" is basically an acknowledgement of debt, where a party undertakes to ackowledge a debt in favour of another person. This unilateral undertaking can either be written down on a private document, or alternatively be agreed on a public deed before a Notary Public.

    These documents do not have access to the Land registry ´per se´, and therefore property is not affected by this debt once it has been sold. However, it could be the case that the beneficiary of the ackowledgement of the debt has executed such debt through the courts, in which case the property owned by the party making the undertaking could well carry a legal attachment to ensure payment.

    The registration of the charge against the property does not mean it cannot be sold normally, but an amount equivalent to the debt, plus interests, legal costs and damages, if any, has to be deducted from the purchase price to satisfy the creditor, who will proceed with the cancellation of the debt.

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