WHEN a decision is made to acquire a property, whether as a home or business premises it is essential to carry out legal searches to see whether there are any claims against the property and to establish the legal, registration, urban planning, etc. covering that property.
On occasion, if the research is not properly completed, or in case of some extraordinary circumstances, it could emerge later that there are some rights or charges against the property, that could affect the right of ownership of the buyers. In this article, we will focus on the possibility that the vendor sells a property to which they only have a partial title.
When this happens, the buyer has a fall back in the “saneamiento por eviccion” or indemnification or liability for dispossession, which is a Spanish legal obligation regulated in article 1,474 and following, of the Spanish civil code, which defines the obligation of the seller to the buyer for the legal and peaceful possession of the property sold. If the buyer is deprived of all or part of the purchased property, by a court resolution and by a third party holder of a preferent right on the property prior to the purchase, the purchaser will have the right to claim against the vendor refund of the price of the property, income lost, costs of the court case, expenses incurred, damages, etc. But, for the buyer to be able to claim, under this rule they must have been partially or totally deprived of the property, by a third person.
The Supreme Court in its judgment 159/2009 of March 9, 2009, reviewed a case where a bank sold a property. This property had been acquired by the bank through a mortgage foreclosure or failure of payment of the monthly mortgage fees by its previous owner. What the bank was unaware of was that the previous owner had acquired the property by means of a swap contract that included a resolution condition, which, when fulfilled, would cancel the contract. The property which was sold came from the division of another property, but the resolution condition was only recorded on the original property sheet in the land registry, despite the fact that it affected the entire property, and also the properties coming from its division.
As the bank sold a property that it never owned due to their solution condition, the Supreme Court found the bank responsible and ruled that it should refund the price of the property paid to the buyer. Also, the Spanish Courts have indicated that it could be possible to make a claim via SANEAMIENTO against the vendor if the property sold had serious structural problems which made it inadequate for its intended use.