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Rights and registration
What types of holding right over real estate are acknowledged by law in your jurisdiction?
The types of holding right over real estate are as follows:
- sole ownership;
- co-ownership; and
- condominium and time sharing (part-time easement).
The types of charge are as follows:
- administrative charges;
- usufruct (beneficial use);
- right of use and right of residence;
- heritable building right;
- leasehold; and
- land easement.
Are rights to land and buildings on the land legally separable?
Due to the principle of ownership by accession, rights to land and to buildings on the land are not separable. There is one exception: the heritable building right. In this case, ownership of the building and the land is separate. The beneficiary of a heritable building right is entitled to build on or under the land of the property owner in exchange for a periodic rent. However, this arrangement is temporary: once the agreed duration has expired, ownership of the building passes to the property owner. For individuals, this duration may not exceed 99 years; whereas for legal entities, there is no limit. It is compulsory for formal validity that the heritable building right be recorded in a public deed and entered in the Spanish Property Registry.
Which parties may hold and exercise rights over real estate? Are there restrictions on foreign ownership of property?
Natural persons and corporate bodies ‒ both private and administrative ‒ may hold and exercise rights over real estate. Since 1992, the regulations governing foreign investment have liberalised all investments in Spain. Nonetheless, express authorisation may be required in special zones of interest for national security reasons, and in coastal zones and islands where foreign property ownership can be restricted. However, for EU citizens these provisions mostly lapsed following Spain’s accession to the European Union in 1986.
Moreover, since 1999 transactions are considered foreign investments only if the amount involved exceeds 3,005,060.52. In such cases, a simple retroactive notice to the government is required in order to satisfy governmental formalities. On the other hand, there is a formal obligation to report any investments that originate in so-called ‘tax havens’ prior to carrying out the investment. Together with the current anti-money laundering legislation, a considerable amount of information is requested from foreign investors. The rules on investment are always linked to the place of origin of the investment, rather than to nationality. EU citizens are exceptions to this rule.
How are rights, encumbrances and other interests over real estate prioritised?
The Property Registry is governed by the rule of chronological inscription. Thus, the first-ranking right has precedence over all subsequent rights, according to the principle of prior tempore potior iure (ie, earlier in time, stronger in law).
Must real estate rights, interests and transactions be registered in your jurisdiction? What are the legal effects of registration?
As a general civil law rule, real estate rights, interests and transactions need not be registered at the Property Registry to be legally valid. Therefore, registration is merely declaratory, not mandatory. Nonetheless, there are important exceptions: for example, mortgages must be registered first in order to take effect. However, it is recommended that all rights be registered in order to protect their position against third parties (the erga omnes effect). As a consequence, as a matter of practice, every real estate transaction is recorded in the Property Registry.
What are the procedural and documentary requirements for entry into the national real estate register(s)? Can registration be completed electronically?
In order to enter a transaction in the Property Registry, a public notarial deed is required. Access may also be provided to enforceable proof of indebtedness, court decisions and other official court documents. Full electronic registration is not available, although notaries can file public deeds first electronically in order to secure first ranking in the Property Registry. The registration can then be finalised through submission of the original documents ‒ in either hard-copy or electronic form, depending on the complexity of the transaction and the region where the property is located.
What information is recorded in the national real estate register(s) and to what extent is such information publicly available?
All information recorded in the Property Registry is publicly accessible, including the name of the registered interest holder, except personal data which is protected under data protection rules. The information recorded includes:
- the exact plot registration figures;
- a general description of the property; and
- an indication of existing charges and encumbrances, both private and public.
Is there a state guarantee of title?
Article 34 of the Mortgage Law provides as follows:
A third party who, in good faith and in return for payment, acquires a right from a seemingly entitled person according to an entry in the real estate registry, is protected in his acquisition from the moment in which the right is recorded, even though, subsequently, the title of the transferor is annulled or terminated for reasons that did not themselves emanate from the real estate registry.
The unregistered ‘real’ owner has a right to seek compensation from the party from which it acquired the right.
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