Many international buyers looking to acquire a property in Mallorca begin with a clear vision. They focus on the views, the location, the project that the home represents or the lifestyle they hope to build on the island. Yet from a legal standpoint, the first element that must be examined with precision is very different: the land registry encumbrances that affect the property. These entries, contained in the Spanish Land Registry, define the legal reality of the asset. They can condition the use of the property, influence its market value and, in some cases, call into question the feasibility of the operation itself.
For buyers who are new to the Spanish system, especially those acquiring in Mallorca for the first time, interpreting a nota simple often proves challenging. The information is publicly available, but identifying what matters requires legal judgement. It is essential to distinguish genuine risks from harmless entries and to anticipate the practical steps that must take place before signing any binding document. This article provides a clear, rigorous and Mallorca‑oriented explanation of what encumbrances are and why they matter.
“Legal certainty in any purchase begins with understanding which obligations, limitations or risks genuinely weigh upon the property.”
What Encumbrances Are and Why They Matter
Land registry encumbrances are burdens, limitations or rights of third parties recorded against the property. They may be financial, urban‑planning related, administrative or even rooted in long‑standing patterns of use. Their purpose is to offer legal transparency and to protect third parties acting in good faith; however, for the buyer they can entail obligations that are not always evident at first sight.
In practical terms, an encumbrance can restrict how the property may be used, affect its value, complicate or delay future building works, oblige the buyer to cancel debts that are not theirs, or even condition the validity of the purchase itself.
Mortgages: The Most Common Financial Encumbrance
A mortgage is the most familiar encumbrance and secures the repayment of a loan using the property itself. It is especially common in high‑value villas or newly built residences on the island. If a property is acquired without cancelling the existing mortgage, the property continues to guarantee the seller’s debt.
“Mortgage cancellation is not automatic: it requires a specific deed and a registry entry.”
In well‑structured transactions, the cancellation takes place simultaneously with the purchase, supported by the bank’s certificate and a dedicated cancellation deed. Before attending completion, it is essential to verify the lender, the outstanding balance, the terms of cancellation and the timeline for registration, as delays are frequent.
Easements: Limitations That Travel With the Property
Easements (servitudes) are enduring rights of third parties that affect how a property can be used. They include rights of way, utility conduits, drainage, access or view protection. In Mallorca, easements are very common in rustic fincas, in consolidated urbanisations and in developments adjacent to golf courses.
A frequent example in golf‑side developments is the negative easement relating to the overflight or landing of golf balls. The owner must tolerate this and cannot demand alterations to the course layout.
These encumbrances are real, permanent and pass automatically with the land. In some cases, they may even exist without registration when they are apparent or have arisen through long use. Their compatibility with the buyer’s plans must be examined carefully.
Marginal Notes: Information That Can Be Decisive
Marginal notes are not encumbrances themselves but carry legally relevant information. They often appear in rustic properties, new developments or properties recently regularised.
Fiscal liability notation
This note secures payment of taxes associated with the transfer. It expires after five years and typically does not prevent the sale. However, it becomes relevant if the seller benefited from reduced tax rates or exemptions.
Ten‑year structural insurance (decennial insurance)
In new residential construction, the developer must take out a ten‑year insurance policy covering structural defects. When the property comes from a self‑developer, the absence of this insurance must be confirmed, and the buyer must expressly waive it.
Urban development encumbrances
These notes indicate that the property forms part of an urbanisation project or may be subject to contributions for infrastructure works. They are frequent in developing areas of Mallorca.
Indivisibility notes
Very common in rustic land, they reflect planning regulations that prevent the division of plots for certain periods. These notes can have long‑term implications for liquidity and resale.
“New construction by age” registration
This inscription shows that the building has been registered based on its age, but it does not certify urbanistic legality. The Land Registry notifies the Town Hall, but the administration does not always respond or inspect.
Urban planning illegality
These are among the most sensitive entries. They may reflect pending enforcement procedures or prior administrative findings. They require a specialist review before any investment.
Prohibition on tourist rental
Since 2024, certain forms of rustic property regularisation require the inscription of a permanent ban on tourist rental. For investors relying on rental yield, this note is decisive.
“Marginal notes often reveal urbanistic risks that do not appear in the general property description.”
Preventive Annotations: Immediate Legal Effects
Preventive annotations are temporary registry entries that protect the rights of a party while a judicial or administrative procedure is ongoing.
Embargoes
An embargo affects the property until lifted by judicial order or administrative release. Any purchase requires resolving the embargo before completion.
Prohibitions on disposal
These entries prevent the property from being transferred while the underlying procedure remains active, effectively blocking the transaction.
Contractual Encumbrances Recorded in the Registry
Some encumbrances are the result of private agreements made registrable under Spanish law.
Retention of title (reserva de dominio)
The seller retains ownership until full payment of the price. This must be cancelled before selling to a third party.
Resolutory condition
This allows the seller to recover ownership if the buyer fails to pay part of the price. It requires detailed scrutiny in subsequent transfers.
Registered purchase option
This grants a third party a preferential right to acquire the property within a defined period. Its status, scope and expiry must be confirmed before negotiating.
Can Encumbrances Exist Without Registration?
Yes. Despite the strength of the Spanish registry system, certain obligations may exist irrespective of registration. These include:
• Legal easements such as access rights for landlocked plots or public utility conduits.
• Continuous or apparent easements established through long‑term use.
• Legal mortgages in favour of public administrations (tax or social security).
• Community‑related obligations under horizontal property rules.
• Continuous or apparent easements established through long‑term use.
• Legal mortgages in favour of public administrations (tax or social security).
• Community‑related obligations under horizontal property rules.
“Not every risk appears in the nota simple. Proper due diligence must combine registry, planning and contractual analysis.”
How Encumbrances Are Cancelled
Each encumbrance has its own cancellation mechanism. Mortgages require a cancellation deed and registration. Embargoes require a judicial or administrative release. Fiscal notations expire after five years. Urban‑development notations have specific durations (often seven years). Contractual rights require the consent of the right‑holder and a formal deed.
The key is to anticipate each step during the due diligence phase and coordinate cancellation with the timing of the deed.
Conclusion
Purchasing a property in Mallorca requires more than evaluating its physical attributes or potential; it requires an accurate reading of its legal reality. Understanding the encumbrances registered against the property and interpreting them in light of planning law, tax exposure and contractual history is essential for a safe and well‑structured transaction.
International buyers often face entries that appear harmless but carry significant consequences: urbanistic irregularities, historical notations, permanent easements or restrictions that shape the asset far into the future. A professional review helps prevent setbacks, avoid unforeseen costs and ensure that the property transfers free from undesired encumbrances.
“A sound investment begins by turning registry complexity into legal certainty.”
Should you wish to examine a specific case or require guidance for a purchase in Mallorca, we remain available to assist with an individual analysis.