The five real estate realities in Spain

Given the importance of real estate in economic activity, the different fields of the Law have sought to regulate it. One of the main challenges of our work is having to work with five different realities, each one of them with partial, different and sometimes even contradictory information, making it necessary to have a transversal knowledge to cover them all.

All the real estate realities are only partial reflections of the situation of the property, which is complex and made up of information dispersed in a multitude of documents. Only with the sum of all the partial realities will we be able to know the true legal situation of the property we want to buy.

Phisical reality

The physical reality is what the property is: its size, the constructions, etc. What you can see with your eyes, regardless of its legal configuration. Of course, in this section it is also advisable to have the advice of an architect, especially if you want to know the construction situation of the property.

Knowing the physical situation of the property will answer questions such as:

• How big is the land?

• How big is the building?

• How many rooms are there?

• Does it have parking / storage / outbuildings?

• How well maintained is it?

Private law reality

The civil or private law reality of the property is one of the most relevant: since property law is essentially civil in nature, there are many civil law issues that can affect a property.

The biggest problem in determining the civil status of a property is that there is no organised source of information. A real investigation (due diligence) of the situation of the property has to be carried out. The Land Registry will provide part of the information, but not all of it.

Knowing the civil status of the property will answer questions such as:

• Who is the owner for private law purposes?

• Are there any contracts attached to the property?

• Are there tenants/occupants?

• Are there legal proceedings?

• Are there any debts on the property that may affect me?

Land registry reality

Land registry reality is the information about the property that has been entered in the Land Registry.

It is a highly valuable body that provides security to legal transactions. In spite of this, the information it contains is not all that is necessary (as a consequence of the existence of other realities) and, furthermore, it can sometimes be incorrect or not in line with reality, for various reasons:

• Because not all legally relevant issues for the property access the Land Register, as we have pointed out above (legal easements, covenants without real transcendence that may affect the seller's title, private contracts, town planning situation, etc.);

• Because registration in the Land Registry is voluntary, so it is possible that certain actions have not been registered (changes of ownership, declarations of new construction, constitution of easements, mortgages not cancelled by registration, etc.) or even that the property itself is not registered in the Land Registry;

• Because, in the past, the data on the description of the property was a manifestation of a party, which resulted in incorrect surface areas, outdated boundaries, etc.

The Land Registry can provide information on the following questions:

• Does the description match the physical reality?

• Who is listed as the owner in the land register?

• Are there any limitations to buying?

• Are there any mortgages on the property?

Cadastral reality

In the Real Estate Cadastre there is a different reality, which is important for tax purposes.

The cadastre is an administrative register under the Ministry of Finance that includes physical, legal and economic characteristics of real estate. Registration in the cadastre is compulsory and free of charge.

The cadastre aims to be a true reflection of reality, especially through inspection and regularisation activities, as it can incorporate ex officio any modifications to real estate, if individuals have not declared them.

Nevertheless, the cadastre may also contain incorrect data, as a result of erroneous measurements, the impossibility of distinguishing the boundaries between two properties, etc.

The following questions can be answered by analysing the cadastral reality:

• Does the description correspond to the physical reality?

• What surface area is described?

• What is its location?

• What is its cadastral value?

Town planning reality

The town planning reality will allow us to know the adequacy of the property to the town planning regulations. It involves checking the regulations applicable to the plot, as well as the adequacy of the construction to the licences granted by the Town Hall.

In the urban planning reality we will find the answer to the following questions:

• Does the property correspond to the plans and the licences?

• Are there any illegalities, has the property been built or extended without the corresponding licence?

• Can I renovate legally?

• What can I build legally?

• What uses are permitted (if it is a house, an office, etc.)?

Other branches of the Law involved

In addition to the realities referred to above, depending on the type of real estate operation we are going to carry out, there may be other branches of the Law involved, from labour law - cases of company succession -, coastal regulations, environmental regulations, military authorisations, etc. without forgetting, of course, the tax implications that real estate operations have.

All of the above means that it is necessary to have professionals to guide us through the process, and it is necessary to have the advice of a lawyer specialised in Real Estate Law, who will analyse the situation of the property from all perspectives and allow us to carry out the operation with minimum surprises.

Our team is prepared to guarantee your legal security in real estate transactions.

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