Spanish civil law is governed by the principle of freedom of form for the validity and perfection of the purchase contract, without there being any more limits than those that derive from imperative rules, morality or public order.
The contracts for the transfer of rights over real estates, such as the purchase agreement, do not require the granting of a public deed for its validity. The contract formalised in a private document or even concluded orally, is perfectly valid and effective, since mere consent perfects it(spiritualist principle).
However, the Spanish Civil Code provides that acts and contracts that have as object the creation, transmission, modification or extinction of real rights over immovable property must be granted in a public document and that, consequently, any of the contracting parties may request the elevation to public deed of the private contract, being the public deed essential for the access of the transaction to the Property Registry.
1. Private document
The private document is the one signed by the parties by their authority and right, without the intervention of any public official who attributes evidence to that document.
Given the principle of freedom of form that governs Spanish civil law, a private document has the same value as the public deed between the parties that have signed it and their successors, provided it meets the essential requirements for validity.
However, while public documents attest to their authenticity, in the case of private documents it is necessary to prove their authenticity. Once the authenticity of private documents has been demonstrated and declared, their effectiveness «inter partes» is the same as that of public documents. Private documents, therefore, only produce effects between the parties that have signed them (relative effectiveness, ‘inter partes’), whereas public documents, by the public faith inherent in the intervention of the Notary, determine the effectiveness of such documents (‘erga omnes’ effectiveness) with respect to the date and to the fact that motivates their granting.
The date of the private document is considered genuine and indisputable to third parties from the day of its registration in a public registry, the death of any of the signatory parties, or its delivery to a public official because of his office.
Private documents do not have access to the Property Registry. To be able to be registered the translative or declarative titles of the real estate domain or the real rights over them, it is required that they are granted in public deed, executory or authentic document issued by a judicial or administrative authority, in the form determined by the laws.
Signing private purchase contract does not involve, in itself, acquiring the thing. To transfer the domain, it is also necessary the delivery of the thing sold, regardless of possible future or deferred obligations.
For example, those who purchase a home through a private document can not mortgage the property acquired, as this document can not have access to the Land Registry. For the mortgage to be validly established, it is required that it has been constituted in a public deed and that the deed has been registered in the Land Registry.
2. Public document
The public deed is a public, genuine and authentic document signed before a notary. It contains one or more statements of persons involved in a legal act or contract. It is endowed with formal and substantive authenticity and proves not only in judgment but also outside it.
The principle of freedom of form in force in Spanish civil law means that the granting of the sale in a public document is not a requirement of validity or effectiveness of the contract. Not even this requirement is necessary for the transmission of the property since this is also transmitted by the delivery of the thing. However, the granting of the public deed of real estate is equivalent to its delivery, unless the notarial deed itself says otherwise.
The public deed is, in Spanish real estate law, an essential requirement for the access of the real estate contract to the Property Registry.
The principle of autonomy of the contractual will in force in Spanish civil law allows validly include in the contract a clause that makes the validity of the contract depend on its elevation to a public deed, while it is not a deal contrary to Law, morality or public order.
The granting of a public deed, if it has been agreed upon in the contract, is an obligation on the part of the party that undertakes to do so. If the obligation to grant a public deed is agreed and it is not granted on the due date, the private purchase contract will be automatically cancelled and without effect. However, this essential condition must be clearly stated in the contractual content.
Notaries must ensure the regularity, not only formal but also material, of legal acts or businesses that they authorise or intervene, and are therefore subject to a special duty of collaboration with judicial and administrative authorities.
In public deeds relating to acts or contracts for which real property rights are declared, transmitted, imposed, modified or extinguished, for pecuniary interest, the means of payment used by the parties must be identified. For this purpose, it must be defined if the price was received previously, indicating dates, or at the time of granting the deed; Their amount; If made in cash, bank check, or by bank transfer. If the grantors refuse to identify the means of payment, the Notary also has to make it appear in the public deed. besides, the Notary must also verify the ownership and the state of charges of the property object of sale.
For the granting of public deeds of property purchase, it’s a general principle the free election of Notary by the parties.
The validity of a mortgage deed can be revoked if, during the constitution of the mortgages or the signing of the deeds, neither the bank nor the notary public clearly informs the mortgaged person that exists and of what constitutes a «floor-level clause». If there is a «floor-level clause» or any other abusive clause, the notary will be responsible for asking the bank to remove it from the contract.
Since the energy certificate is mandatory to sell or rent any house, the notary also has to demand it. The notary must inform the two parties about the obligation to pay and obtain an energy efficiency certificate, as this must be recorded in the public deed.
3. Effectiveness against third parties
When a property sale is granted in a public document and registered in the Property Registry, all third parties are affected by it, since they can not ignore that the contract has taken place between the parties on the date and place that the document Indicates.
Therefore, the granting of the purchase and sale in a public deed has been constituted as a requirement for the registration of the same in the Land Registry.
By the intervention of the notary in the sale and sale, the document is valid against third parties regarding the date and the fact that motivates its granting.
It is necessary therefore the public deed so that the sale is enforceable against third parties, and to prove its effectiveness and validity.
4. Translational effects
The granting of a public deed of real estate is equivalent to its delivery, with an instrumental character, unless the public deed itself says otherwise. Writing represents the consent and transfer of ownership or limited real right. However, instrumental delivery is not necessarily the only form of transfer of the property of real estate. Other means, such as the delivery of keys or the delivery minutes, are admisible.