Is it compulsory to register the purchase at the Land Registry? What is the risk of not doing so?

Question

José Manuel Alburquerque · Accepted Answer

It is not compulsory, because you become the owner when you buy and receive the flat, normally on signing the deed, not when you register. But until you register, the seller still appears in the “Registro de la Propiedad” (the Land Registry) as the owner and you are not protected against third parties. If the seller sells or mortgages the flat to someone else who registers it in good faith, or if the seller's creditors seize it, you may lose it or have to go to court to defend it. Registering costs little compared with that risk. The notary's office normally sends the deed to the Land Registry on the day of signing. What registration gives you The “Ley Hipotecaria”, the Spanish land registration act, protects anyone whose purchase is registered: The flat is presumed to be yours and to be in your possession, so you will not have to prove it. In principle, anything others have not registered does not affect you. If the seller had previously sold the flat to someone else who did not register their purchase, that person cannot assert it against you. If you bought in good faith from the person shown as owner in the Land Registry and you register your purchase, the law keeps you as owner even if the seller's title is later set aside for a reason that did not appear in the Land Registry. That same protection works against you until you register, because it favours whoever registers before you. The risks of not registering The seller selling the flat again. If the second buyer registers it first and in good faith, they keep it and you will only be able to claim against the seller. The seller mortgaging it or the seller's creditors seizing it. If you bought first, you can challenge the attachment in court. But if the flat ends up being auctioned and the person who buys it registers in good faith, that buyer is protected. The practical problems. You will not be able to take out a mortgage on the flat or sell it easily. Years later, you may have to track down the seller or the seller's heirs to put matters right. How registration works Before the signing, the notary checks the Land Registry and, on the same day, sends it the deed electronically. That submission gives your purchase priority over anything that arrives later. Registration is completed once it is shown that the taxes on the purchase and the “plusvalía municipal”, the municipal capital gains tax, have been filed, because the Land Registry will not register without that. It is advisable not to delay those formalities. If you buy with a mortgage, the agency (“gestoría”) proposed by the bank normally takes care of everything. If not, you can do it yourself or instruct an agency. Registering a purchase of 300.000 euros costs about 250 euros under the official scale of fees (“arancel”), including VAT.