Are there any other registers or sources of information that it is usual to search when buying a property or lending money on mortgage? For example:
- The cadastre
- Business registers
- Insolvency registers
- Registers or information held by municipalities or other local authorities
- Information held by utility providers (water, drainage, sewage, electricity etc)
- Flood risk registers
- Deeds not registered in the land register (how are these discovered?)
- Tax authorities
- Landlord/commonhold association/management company/community of owners (especially in the case of apartments)
- Any others?
State what the buyer or mortgagee would want to discover from these sources
1º The Cadastre.
The Cadastre is an administrative registry for taxation purposes administered by the Revenue Ministry. It contains a nationwide territorial map of the land split in cadaster parcels. Cadaster parcels are administrative units for taxation. Differently, land registry properties are legal units defined as the object of property rights and the immovable trade.
There is a legal framework in order to coordinate the description of cadaster parcel and the land registry unit (called in Spain finca registral).The ongoing procedure started with the 13/1996 Act and followed by Cadastre Act called: Decreto legislative 1/2004 de 5 de Marzo texto refundido de la ley del Catastro Here is the link to the relevant disposition http://www.catastro.meh.es/pdf/trl_000104_0503.pdf
Before performing any king of legal act (purchase, mortgage, inheritance, etc…) cadaster information must be collected about the parcel. This search can be done on line through the Spanish Cadastre site http://www.sedecatastro.gob.es
The cadastre parcel description, surface, boundaries, address etc… must be compared with the description of the property in the land registry , finca registral. If both cadastre parcel and finca registral match they will be updated and categorized as coordinated, so information can flow between both registries, land registry will publish the number of the cadaster parcel, and cadaster will publish ownership derived from the land books. Coordination entails full identification of the property, same area ( less than 10% variation in the area of the plot is permitted), updated boundaries, unless there are divergences in fixed boundaries ( paths, rivers, streets, walls…), address, etc..
On the contrary if there are significant differences, the parties can promote a coordination procedure, or they can perform the act with the land registry description.
The coordination procedure entails publications, surveyer’s measurements, notifications to the neighbourghs and to previuos owners, etc.. This procedure can take place either before a judge in a non contentious procedure called expediente de dominio, or before a notary through the acta de notoriedad. Cadastre act contains also a procedure to update the descrption contained in the deed but this procedure is not coordinated with the land registry so at the end land registry could refuse updating information it if serious doubts still arise to identify both subjets.
Cadastre is usually consulted, in order to know the titular, tax value of property and its physical characteristics. Spanish Law establishes the compulsory inclusion of the cadastre maps in deeds when purchasing or mortgaging the property, and also in the Land Register. The last reform of the Spanish Cadastre Law (2/2011 Law) improves the coordination of the Cadastre and the Land Register, and establishes a new procedure in order to enhance this coordination. Land Register is compelled to send periodical reports to the Cadastre.
2º Bussines registers.
Whenever a company is involved in a legal act, Business registry must be checked to ensure the company is properly registered in the Business register. Registration is constitutive in the case of some companies, like stock companies and the limited liability company. It also must be check the registration of the administrator of the company, the legal representative and the proxys, powers conferred to certain person.
At the moment, Business registers are accessible through internet in the site
3º Insolvency register.
The land registry also deals with restriction orders derived from an insolvency procedure, so limitations in the powers and faculties of the owner will be publish in the folio of every asset registered in the name of the debtor. As a result, there is not need to check the Insolvency register to be alert of that situation. Information published in the land registry includes the date of the decision of opening procedure, the Court and number of procedure, so further investigations could be conducted.
There is also a public register of Insolvency. The Real Decreto Ley 3/2009 establishes a Public Register of Insolvent People, which operates from 2010. This Registry is free and public. The Insolvency Law also establishes a complete publicity system of insolvency procedures (every judicial act relating to insolvency must be publish in the Land Register, the Business Register and in the Official Gazettes). The web is directed by the Spanish Register College: www.publicidadconcursal.es
In case of insolvency of the owner, Spanish Insolvency Law (22/2009, Concursal, arts. 71-73) sets the rescission of prejudicial acts done by the insolvent owner during the two former years to the judicial act. But this rescission does not affect to third bona fide owners who were not required in the judicial procedure.
4º Registers held by Municipalities.
Information held in the Municipalities becomes very important when dealing with a immovable property, since the town hall is the first source of information regarding urban and planning obligations, and also with regard to the payment of local taxes attached to the immovable as we explained before.
Local taxes. There are two kind of local taxes linked to the immovable asset, as we will explain below.
Urban and planning restrictions are essential when dealing with a plot of land, in order to know if it is suitable for building. It is also essential in the case of new buildings, since allows to know if the building complies with all legal requirements previous to the occupation and needed before start using the building or its flats.
Unfortunatelly there is not frequent to find a municipal register where these information are directly available, so it is served under demand. However some of this information can be found in the land books, as we will explain in detail in next chapter of this fact sheet.
5º Utilities suppliers.
There is not a national or local register where utility’s infrastructures are registered. Main infrastructures like pipelines, roads, motorways or railway tracks require previous expropriation and will be registered in the land books. Others are subject matter of what is called public servitutes.
6º Information from the regional goverments ( Comunidad Autónoma).
There are two kind of relevant information held by the Comunidad Autónoma. Information with regard to the taxes imposed to the transmission of ownership, and the asset owner’s liability. We will explain this in the following paragraph. Regional authorities produce and held relevant territorial information in the field of environmental policy ( cattle tracks, protected areas, forests, regional protected areas…) We will explain in more detail this question in the next chapter of this fact sheet.
7º Tax authorities.
There are three levels of state powers, all entitle to different tax incomes arisen from the transfer of ownership of an immovable property.
A) Central State taxation authorities.- ( Agencia Estatal de Administración Tributaria, also known AEAT, its web site: http://www.agenciatributaria.es/AEAT.internet/en_gb/Inicio.shtml ).
Information about taxation for non residents is available in english language here: http://www.agenciatributaria.com/
Income tax.- when a non resident transfers ownership, the purchaser is obliged to retain 3% of the purchase price: Withholding on account The person acquiring the building, whether resident or non-resident, shall be obliged to withhold 3% of the agreed payment and deposit it with the Public Treasury. For the seller, this withholding acts as a payment on account of capital gains tax arising from the transaction.
The purchaser will deposit the withholding using form 211, within one month from the date of transfer, and will give the non-resident vendor a copy of form 211, so that the vendor can deduct the withholding from the tax liability resulting from declaring the net gains. Should the withheld amount be greater than the tax liability, it is possible to obtain a refund of the difference.
Value Added Tax (V.A.T.).- if the seller is a company or a professional performing, when selling the immovable, his business activity, the purchase will be taxed with the VAT tax, which excludes regional tax for the same transmission.
B) Regional Government Authorities ( Comunidad Autónoma)
Patrimonial Transmission Tax (Impuesto Transmisiones patrimoniales ITP)
The transmission of ownership is taxed by regional authorities, up to 8 per cent of the asset’s value( this figure may vary from one region to another). Payment of this tax ( duty stamp) is a prerequisite for registration, form 600. According to law the taxation value of the property does not match necessary with the purchase price. On the contrary, the law states that taxation will be calculated on the real value of the asset. This means that the revenue’s regional authorities are empowered to review the tax declaration and claim for additional payment in case it is considered that the real value of the asset is higher than the purchase price declared by the parties in the deed. The action for reviewing the declaration lasts four years. Although the tax obligation falls on the purchaser, the asset itself is attached and affected to the payment of this tax, so in case asset is transferred liability will follow asset’s ownership in case of main debtor’s failure.
Land registry publishes notices about this affection, and the remaining time of liability, but to be completely sure about this checks could be done before the Comunidad Autonoma local office. In some regions this office is located in the land registry office.
Succession and donation tax.- transmission of immovable assets by means of succession or gifts is also charged with taxes. It is also competence of the regional authorities , and the scheme is similar to the ITP tax we had just explained. Forms to be presented are 650 and 660.
C) Local tax authorities, Town Hall or municipal government (Ayuntamiento)
Two kind of local taxes are related to immovable properties,
Capital gains arising from the selling of a building or a flat ( Impuesto increment de valor de terrenos, also known as Plusvalía). Difference between purchase price and selling price often derive in gains for the seller who will be taxed also by local authorities. The debtor will be the seller, but a declaration of the transfer must be done to local authorities before registration of the transfer. The purchaser will not be obliged by this tax.
Immovable property tax. (Impuesto de bienes inmuebles). This is a local tax imposed to the owner of an immovable property every year. The asset is attached to the payment of this tax but only for the current and the previous year taxes, whoever the owner is, so the obligation passes with the transfer of ownership. More information can be found above in the tacit legal mortgage.
If a person has tax or judicial debts, they always can be known by third parties once they have acceded to the Land Register, by order of the Judge or the Tax Authority. Spanish Land Register Act (art. 42 an 69 ss.) and several Procedure Laws establish the compulsory registration of the procedure in order to be prejudicial to third bona parties.
7º Non registered deeds.
As we already explained, non registerted deeds can not affect at all the registered owner and the future owner.
The Spanish Hipotecary Act tries to encourage the registration, by the effects that the art. 32 and 34 establish (Ownership deeds or other real property rights which are not duly registered in the in the Spanish Property Registry will not be prejudicial to the rights of third parties).
Also explained in the first chapter of this fact sheet. Leases must be respected by the new owner even when they are not registered for the remaining five years time of the lease contract, even in the case the lease is not registered. For longer leases only if it is previously registered it can prevail over ownership.
There is not a registry of leases. Spanish mortgage act allows the registration of leases in the land registry, but as far as registration is not compulsory there is no obligation to do it, and in fact this is the most common situation. Rights of tenants and correlative obligations and restrictions to ownership had been already explain in chapter one of this fact sheet. The only way to be aware of leases is by means of direct inspection, to check whether there are occupants or not in the property.
9º Condominium expenses.
The community of owners must inform about the current payment of the community costs as a legal requisition to sell or mortgage the property. A certificated information from the administrator of the building about the flat’s expenses account is usually demanded before performing a transaction.