Properties not registered in the Land Registry
Problems of properties not registered in the Property Registry
The registration of a property in the Land Registry is always advisable. The main purpose of registration is to prove ownership to third parties. Sometimes the registry information does not match the real ownership of the properties, which often results in problems for owners who never managed to register their properties, and who have subsequently seen their ownership questioned by third parties.
Is it necessary to register a property in the Land Registry in order to acquire it?
The answer must be negative. The registration of the title, which in the case of real estate is usually a public deed, in the Property Registry, is voluntary and merely declaratory. It has no constitutive character in any way.
That is, registration in the Land Registry is not necessary for the acquisition to take effect. The registration does not give rise to rights (unlike what happens in the case of the mortgage whose registration does have a constitutive character as provided by the art. 13 of the Mortgage Law).
To defend the ownership of real estate against third parties, when the current ownership has not been registered in the Registry, it will be essential to be able to prove that the acquisition to favor of the headline actually took place. We will see below that there are two requirements that the Civil Code requires for this purpose: The so-called “title” and the “mode”.
When does the acquisition take effect?
To answer this question, we must analyze the requirements that Spanish Law requires for the acquisition of real estate. Our regulations have accepted the so-called “theory of title and mode” regarding the acquisition of property, applicable to the sale, exchange, and the rest of the figures that grant the acquisition of real estate by contract.
The acquisition process occurs in two stages:
a) The “title” is the act by which the will to alienate and ultimately transfer the right is established. Understood the term title not in the physical sense of the document itself, but in the expression of a mutual will between the transferor and acquirer. For the “title” to exist, therefore, no written document will be necessary, it is enough that both parties have agreed on the conditions of the transmission.
b) The “mode” is the act consisting of the actual delivery of the property. The transferor executes the alienation, and the acquirer receives the property. In the purchase and sale of homes or business premises, the mode requirement usually translates into handing over the keys.
Consequently, for the acquisition to be perfected and take effect,it is necessary for the parties to agree on the transfer and also for the delivery of the stuff. It is a dualistic system, since both stages must concur. Consensus between the parties or the signing of a document, whether private or in public deed, is not enough.
This doctrine derives from articles 609, second paragraph and 1,095 of the Cc:
Art. 609.- (…)
“Ownership and other rights over assets are acquired and transmitted by law, by donation, by testate and intestate succession, and as a consequence of certain contracts through tradition”.
Art. 1,095.-
“The creditor has the right to the fruits of the thing from the moment the obligation to deliver it arises. However, he will not acquire real right over it until it has been delivered to him ”.
Our mortgage legislation comes to endorse, as it could not be otherwise, the normative regime of the Civil Code. As all the doctrine has outlined without exception.
The title and mode doctrine has long been recognized and applied by our courts without exception. We cite, for example, the Judgments of the First Chamber of the High Court, among which it is worth mentioning that of March 29, 1965, May 24 and July 5, 1980 and November 25 and December 1 and 22, 1986, November 23, 1991, February 18 and 23, 1995, June 27, 1996 or July 10, 1997.
The jurisprudence has unanimously accepted private documents as proving the title, as long as they have been endorsed by other means of proof that attest to delivery of the transferred asset. We cite below examples of judgments handed down in this sense: Judgment of the Provincial Court of Málaga of September 15, 2002, Judgment of the Provincial Court of Albacete of October 22, 2004, Judgment of the Provincial Court of Las Palmas (Section 4), on January 23, 2004.
Are they questioning the ownership of your property for not having it registered?
In our office we have resolved numerous matters, in favor of clients who saw their properties threatened for not having registered their properties in the Property Registry.
A typical case is the seizure of the property by the courts and the threat of forced sale by judicial auction. This can occur when the courts pursue the execution of the assets of the former owner who does appear in the Registry as the owner. To decree the seizure of assets, the courts do not question the veracity of the registry data, so it is possible to be seizing an asset that does not belong to the debtor whose assets are to be prosecuted.
When this happens, the true owner fears for the loss of his property . In application of the doctrine set forth above, and once it has been clarified that the notarization of the contract and its registration in the Property Registry do not constitute essential requirements for the transfer of real estate, the success of your defense will depend on the evidence that can collect on beneficial ownership. In this sense, some of the following can be considered sufficient evidence:
- Public or private document
- Certificate of registration in the property subject to controversy.
- Receipts for supplies in the property, and justification of their payment.
- Leasing contracts signed by the actual owner with third parties.
- Rental receipts and justification of the receipt of said amounts.
- Minutes of the community of owners meeting that accredit the participation of the owner.
- Any other document that proves the use of the property or its ownership by the real owner.
The defense of the owner in these cases requires the appearance in the foreclosure procedure where the seizure has occurred, and the formulation of the call “ third party domain claim”. The court will assess whether the tests carried out, and where appropriate the title exhibited, show the reality of the ownership and does not constitute a mere fraudulent artifice.
Conclusions
- First: In all cases, the registration of real estate in the Land Registry is recommended, regardless of the way in which they were acquired. The registration grants presumption of veracity, for more information you can read the article Proprietary presumption of the title registered in the Registry
- Second: Inscription in the Registry is not an essential requirement for the acquisition to take effect.
- Third party: For the transfer of assets to be considered valid, the common will expressed by the acquirer and transferor is required, and the effective delivery of the asset .
- Fourth: It is possible to defend in court the rights of the owner who never registered his title.
