One of the most important steps when buying a home in Spain is to obtain information about the property’s legal status.
This vital data, provided mostly by the Land Registry, gives us an essential overview of the property’s legal standing. However, Land Registries do not always include information about bankruptcy and this omission may mean that a transaction cannot be registered, jeopardising your purchase. In this blog post, we suggest a vital tip to help you avoid this situation.
What’s on a Nota Simple in Spain?
Once you have decided to buy a property in Spain, your lawyer starts the conveyancing process. A vital part of this procedure involves getting documentation, known as a Nota Simple in Spanish, from the Land Registry regarding the property you plan to buy.
The Nota Simple includes details about the property such as:
- Identification number for the property.
- Information about the property including location, size and boundaries along with any modifications made in the past.
- Names of the current owners, their share of ownership and how they acquired the property (e.g. through purchase or inheritance).
- Charges on the property for outstanding debts including a mortgage.
Your lawyer checks all this information and if necessary, acts on charges and claims. In the majority of purchases, this is sufficient.
What might not be on a Nota Simple in Spain
However, due to the way the registration system works in Spain, a Nota Simple is not infallible and may lack some information. For example, it may not include bankruptcy information about the seller.
In Spain, when an individual or company goes bankrupt, the Bankruptcy Law allows the legal intervention of the individual or company’s power of administration and disposition as well as its assets.
This intervention is recorded in the Public Bankruptcy Registry but not in the Land Registry. As a result, a Nota Simple does not record information about seized assets.
In practical terms, this means that you may be unaware that the seller is officially bankrupt or that they have seized assets that may include the property you want to buy.
If the property has been legally intervened, the seller is not permitted to carry out any transactions on the property (including its sale) and you won’t be able to register the property in your name.
How to avoid this problem
To prevent buyers from facing unpleasant surprises caused by asset intervention, Spain created the Public Bankruptcy Registry in 2003.
The Registry was subject to further legislation in 2013 and now lists all assets subject to bankruptcy proceedings. Access to the Registry is free and you or your lawyer do not need to provide a reason for consulting it.
If you or your lawyer suspect that the seller (individual or company – a developer for example) may be in financial difficulty, it’s well worth consulting the Public Bankruptcy Registry.
A simple check will reveal whether the seller is in bankruptcy proceedings and as a result, have limited selling administration power over their assets.
This check should be done before you sign a deposit contract so that you do not find yourself buying a property that you cannot register in your name.
How to get help
At CostaLuz Lawyers, we have assisted thousands of foreigners in buying a property in Spain.
Our conveyancing process always includes the pertinent checks on the property you wish to buy and we act independently and in your interests only.
As a result, you buy with complete peace of mind and 100% legality.
Get in touch for advice on how we can help you buy your property.