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Is it safe to buy a property which is not registered?

Property Law

Antonio Flores Vila

29th of November 2004

Q. We have found the perfect property but the seller informs to still buy and how do we get registered in our name. Should we insist the seller registers the property before he sells it to us?

Could you contact us by e-mail as we will require legal help in buying this or other property in the near future.

    A. The issue in question will have different treatment if it is the land which is not registered at all in the corresponding Land Registry, or on the contrary is the house, or dwelling, what is not registered even though the land is.

    In the first case, it is the seller who will need to register the property in his name with the Town Hall, and also obtain a Cadastre certificate again from the TH, prior to be able to sell through a Notary Public. The procedure requires also 2 witnesses who will swear on oath that to the best of their knowledge the property belongs to the person selling, and once this is done, at the same time, he will sell to you. The drawbacks are that you will not have a third party claim-proof title, as during two years the Land registry will not fully protect you (against a person claiming, for example, better title), and that banks, within this period of two years, will not lend on this property. Also, you will possibly be taxed twice, once for the first registration of the property and secondly for the sale. This has to be thrown into the negotiation process.

    The above procedure is commonly known as ´Acta de Notoriedad´, or ´Procedimiento del artículo 205 de la Ley Hipotecaria´, and even though it may sound risky it is not normally the case and many of these are performed, specially in small towns, villages and rural areas (it is not uncommon to see ads on local papers with a public declaration, as this is another requirement).

    The second scenario is far simpler inasmuch as what will be required is to register the dwelling with the Land registry, but as this is not a first registration your title will be protected thereafter from the moment of purchasing. The seller can arrange this prior to completion, or alternatively it can be arranged that enough funds to cover the costs of registration will be deducted off the purchase price.

    We can assist you in the process, from the moment you place an offer up until completion.

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