Legal Regulation.

 

The Civil Code dedicates the Title IV of Book IV to the purchase contract,   which includes arts. 1445 to 1537. Some of these Articles are specifically earmarked for the purchase and sale of real estate (see articles 1473, 1537, 1469 to 1472, 1483 and 1504).

Outside of this Title, the Civil Code contains several rules that regulate the real estate purchase, such as arts. 166, 271 and 323, which require special requirements for the sale of immovable property belonging to minors and incapable persons; the art 1280.1º, which imposes the public documentary form for contracts whose purpose is the creation, transmission, modification or extinction of real rights over immovable property.

 The Art. 1537 declares that the provisions of the mortgage legislation apply to real estate sales. Therefore, outside the Civil Code, in matters of real estate is of particular relevance the regulation of the Registry of Property, which accesses ownership rights and other real rights consequence of the conclusion of a contract of sale (Articles 2 LH and 7 RH).

 

 Concept.

 

In the sale of real estate, the seller undertakes to deliver a real property, and the buyer obliges to pay for it a certain price, in money or sign that represents it (article 1445 CC).

Characteristics.- There are no specialities due to the object regarding the characteristics of the real estate sale, so it is a bilateral contract, consensual, onerous, generally commutative, and transfer of the domain or real right in question.

 

 Nature.-

The property purchase is always civil since its object is a real estate, it is not possible to be considered mercantile (article 325 CODE OF COMMERCE SPANISH).

 

Legal Capacity.

The property purchase is governed by the general rule of Legal Capacity of art. 1457 of the Spanish Civil Code. However, the property transfer is included among the acts for which the emancipated minor must have the consent of his parents or curator (article 323 CC); Likewise, parents or guardians acting on behalf of their children or pupils must obtain the corresponding judicial authorization (articles 166 and 271 CC).

 

Object.

 

Determining the property subject to sales contract can be done in two ways:

 

A)    Sale of assets by the unit of measure or number.

B) Sale of a property as “true body”, in which case the measure does not count: it involves the need for a clear and precise fixing of boundaries, as stated in art. 1471, second paragraph, Spanish Civil Code, although the jurisprudence has indicated that the lack of fixation of the same will not determine the inefficacy of the purchase if these could be established otherwise.

 

In the registration of the property right acquired by means of title deed in the Property Register, it shall be stated “the nature, location and boundaries of the properties that are the subject of the registration, to which the right to register is affected, and its measure Surface, name and number, if they appear, of the title “(article 9.1 LH).

 

 

Form.

 

Art. 1280.1º CC requires the public documentary form for acts and contracts, including the sale and purchase, which have as their object the creation, transmission, modification or extinction of real rights over immovable property. It should be borne in mind that repeated jurisprudence from the old – judgment of July 4, 1899 – has been establishing that failure to comply with that formal requirement does not change the validity of the contract between those who agreed to meet the requirements of art. 1278, to which all that is left to them is, as it prevents the art. 1279, be compelled to elevate the contract to a public deed for reasons of utility regarding proof, execution of its contents, access to the Registry of Property and such other form that may favour between the parties.

 

According to the jurisprudential doctrine, the refusal of the seller to raise the contract to a public deed supposes a breach of contract, which justifies the breach by the buyer of the rest of the agreed price – unless otherwise stated – However, as a general rule, it does not constitute a breach of such magnitude as to justify the termination of the contract (unless both parties have agreed to that obligation as essential in the contract in pure exercise of freedom of covenant established in Article 1255 of the Civil Code).

 

When the sale involves an official housing, the specific regulations applicable to this type of real estate requires the public deed of the contract to be drawn up within three months of the final rating or signature of the contract.

 

 

Expenses.

 

In the event of the purchase and sale being executed in a public deed, the costs of granting the deed shall be paid by the seller, and the expenses of first copy and registration fees shall be the buyer’s account, (unless otherwise agreed, Art. 1455 CC).

The agreement on who pays taxes related to the sale does not bind the tax authorities, which will require taxes legally obligated to pay, notwithstanding that later the one who had paid them can claim to be refunded from the other contracting party, according to the covenant.

 

 

Transfer of ownership (and other real rights).

 

The contract of sale is a conventional instrument of the transfer of property (and other real rights), provided that the conclusion of the contract is followed by the tradition or delivery of the object(article 609 CC). The most common way to make delivery of a real estate is by granting the public deed (instrumental traditio; Art. 1462 CC) since only the acts documented in a public deed have access to the Property Registry (art 3 LH.).

 

 

Double sale of the same property.

 

The art. 1473 of the CC provides that, in the case of double sale of property, the buyer in good faith who first inscribes his right in the Land Registry has a better right to own. When there is no previous inscription, the property will belong to who in good faith is first in possession; And if no one has the possession, to whom presents the title of oldest date, whenever there is good faith.

 

 

Problems of extension and quality.

 

In the sale of real estate, it may not coincide what was delivered by the seller with what was expressed in the contract. Articles 1469 to 1472 of the CC regulate this case, granting a series of legal actions to the buyer against the seller. These legal actions have a limitation period of six months from the day of delivery. The solution foreseen in these articles depends on whether the sale has been effected by measurement unit or as a body.

 

In the sale of an immovable property with expression of its extension, by reason of a price per unit of measure or number, the seller will be obliged to deliver to the buyer, if he demands it, everything that has been expressed in the contract; otherwise, the buyer has the right to return it. If this is not possible, the buyer may choose between a proportional reduction of the price or the termination of the contract, if the defect or excess exceeds a certain limit (articles 1469 and 1470 CC). The law opted for the preservation of the contract if the differences of extension in the property sold are minimal.

 

The same rule applies,  if any part of the property is not of the quality expressed in the contract, although in this case, the termination will only take place at the will of the buyer, when the lower value of the property sold exceed one tenth of the agreed price (art. 1469 CC).

 

In the sale and sale as a “true body” or at a “raised price” there will be no increase or decrease in price, even if there is more or less space or numbers expressed in the contract (Article 1471 CC). In this case, the differences in size and quality are irrelevant.

 

The art 1471 CC equates the sale as “true body” with the sale by a single price of two or more properties, applying the same solution in no increase or decrease of the price. But if in addition to expressing the boundaries, the contract specifies its extension or number, the seller will be obliged to deliver everything that is understood within the same boundaries, even if it exceeds the space or number expressed in the contract; And if the seller can not comply with this rule, it will suffer a decrease in the price, proportional to what is lacking in surface or number, unless the contract is canceled by the buyer who does not accept that what was stipulated .

 

 

Reparation.

 

Within the rules dedicated to the right of compensation in case of eviction, the Civil Code contemplates a particular case, the eviction of charges, which occurs in the sale of real estate (Article 1483 CC). This rule is based on the fact that the purchased property has a hidden charge that has not been communicated by the seller to the buyer. “Charge” means the real rights of third parties  (mortgages, easements,…). They are, therefore, liens or juridical burdens. If the charge was not declared in the contract by the seller but is registered in the Land Registry, it will lead to eviction.

 

The buyer, who is disadvantaged because he has to bear the burden, having paid for the property a price whose calculation has not entered that circumstance, has the following option: the rescission action, or compensation for the amount of the reduction of the value Of the estate because of the tax. The term for the exercise of this legal action is one year.

 

 

Subsequent condition.

 

The art 1504 CC establishes a special regime for the resolution of the sale of real estate for breach of the buyer, which modifies the global system defined in art 1124 CC. The fundamental requirement for the application of art 1504 CC is unjustified non-payment of all or part of the price by the buyer.

 

However, for the resolution of the contract to be applicable, it is necessary for the seller to make a particular decisional request, through the notary or judicial process, against the buyer: until that moment, the buyer can pay, thus avoiding the resolution. From this requirement, neither the judge can grant a new term to pay, nor the buyer avoids resolution by payment.

 

 

Protection of consumers in the purchase of homes.

 

The protection of the purchaser of a house includes the requirement that the offer, promotion or advertising are accurate, as well as the integration of the content of the contract of what would have been offered or advertised. Likewise, duties of pre-contractual information are imposed by the selling promotor and the prohibition of using abusive clauses.

 

 

The law considers as abusive:

 

the stipulation that the buyer has to bear the expenses derived from the preparation of property titles that, correspond to the developer (new works title deed, horizontal division, mortgages to finance its construction or division, and cancellation);

The stipulation that obliges the buyer to subrogate himself in the mortgage of the developer, or that imposes penalties in the cases of non-subrogation;

The clause that imposes to the consumer the payment of taxes in which the taxable person is the developer;

And, finally, the stipulation that imposes to the consumer the expenses derived from the connection to the general supplies of the dwelling, when this must be delivered in conditions of habitability.

 

The Regions have issued similar provisions on pre-contractual information duties in the acquisition of housing.

 

 

Sale of a home in a horizontal property regime.

 

Article 9.1.e) of the LPH imposes on the transferor of a dwelling or premises, under horizontal ownership, the obligation to declare to the buyer, in the public deed of Sale, the  state of payments of  community expenses, as well as the duty to provide certification on the debts status in the act of granting the public deed, unless expressly waived by the acquirer.

 

The rule is justified in the responsibility that the purchaser acquires, guaranteed with the own property purchased, to pay the amounts owed to the community of owners by the previous owners, being, besides, a preferential credit for the effects of art 1923 of the CC.

 

 Termination of the contract of sale for breach of the obligation to inform the urban situation of the plot.

 

In the purchase of land, it must be stated in the corresponding title:

 

a. The planning condition of the property, when it is not susceptible of private use or construction, has buildings out of order upon town planning regulation or is destined to the construction of houses subject to the public protection that limits to a maximum sale or rent price.

b.  Legal duties and obligations to be fulfilled, when the land is subject to an intervention of planning transformation.

 

The breach of any of these provisions empowers the buyer to rescind the contract within four years and demand compensation.

 

The termination referred is not an ineffectiveness directly established by law but a power to provoke the resolution that is granted to the acquirer when it has not been stated that the land is not buildable or that the building is out of order.

 

 The Supreme Court has fixed the dies a quo of the limitation period of this action of rescission on the date of the granting of the contract.