Unlike a title deed, which in truth bears little to no importance, what matters in Spain is who appears as the registered owner before the land registry. I’ll provide a quaint example that will help to explain the important role the land registry plays out in Spain.
Back in 2006, when I was still young and idealistic, I worked for an English law firm on behalf of an institutional lender. We were approached by an elderly borrower who wanted to take out a Lifetime Loan against her property on the Costa del Sol. The lady showed us her original title deed witnessed by a Spanish Notary almost 30 years prior; in principle all seemed good and checked out.
However, on requesting an updated nota simple (land registry report) I was shell-shocked. It pans out her property was still registered under the name of her developer, the same one that sold her the offplan property three decades earlier!
The crass error she made was not to instruct her own conveyance lawyer at the time and rely blindly on the developer’s lawyer to do all the work! She had blissfully entrusted the developer to register the property under her name; which of course never took place. This error was compounded by the fact she had never bothered to do a follow up post-sale verifying the property was in fact registered under her name.
To all legal intents and purposes, the developer was still very much the owner of her property three decades on! You may think this is a one-off, a fluke, well you’d be sorely mistaken. I tell you it is not, in fact, I come across such cases every two months on average.
This example goes on to show the (great) importance the Spanish land registry plays. She felt certain her title deed categorically proved her ownership and even had it safely stored in a fancy safe! When in fact the reality was her title deed meant nothing from a legal point of view (wet paper).
In Spain we have a robust two-tier system (notary and land registry) that secures ownership rights and which I personally find very good.
In Spain what matters really is who appears before the land registry as the registered owner. For it is this person, and he alone, who can sell, rent, or dispose of it as he sees fit.
My example goes on to explain the Land Registrar’s motto in Spain, “prior in tempore, potior in iure” which roughly translated is first in right, greater in right. Or more colloquially, first come, first served. He who lodges his right first, has the better claim over a property.
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