Tenant rights I should know as a landlord

I am thinking of buying or selling a rented property... what rights does the tenant have?

12/3/2021

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In this article you will find

The purpose of this article is to explain all those issues that both buyer and seller must take into account in the event that the property being transferred is leased to a third party, since in such a case, the law determines a special regime to be taken into account, with a series of rights in favor of the tenant that must be respected so that the sale and purchase can be carried out properly.

In this case, again, as usual, in my presentation I will use the system of questions and brief answers, highlighting in any case the most relevant elements to be taken into account, so that if you prefer, you can make a quick reading of the article by simply reading the questions and the bold print.

What is a lease in general?

In accordance with the provisions of civil law, as a general rule, a lease contract is a contract whereby one party, called the lessor, as owner of an asset, undertakes to assign the enjoyment or use of such asset to another person, called the lessee, for a specific period of time and in exchange for a specific economic consideration.

So, for example, if we go on vacation for a few days to another country, we may need to use a car to move around the places we want to visit. For this purpose, we will rent a car from a car rental company, so that the company, as owner of the car, will let us use it for the agreed period (for example, 4 days), in exchange for an economic consideration (for example, €250), after which we will have to return the car to its owner.

What is a real estate lease?

As it has been observed in the preceding question, in the Civil Code we can find a set of rules that regulate the lease contract in general, when it refers to any kind of property.

However, when the lease refers to real estate, the definition can be further clarified by stating that a lease of real estate is a legal transaction by virtue of which the owner of real estate, who is called the lessor, assigns the use of such real estate to a third party, who is called the tenant or lessee, for a specific period of time and in exchange for an agreed price.

Can the owner of real estate "agree whatever he wants" with the tenant or lessee?

It is necessary to indicate that, given the relevance of this sector of contracting, the legislator has considered it more appropriate to expressly regulate this type of rental contracts separately from the Civil Code, specifically in Law 29/1994, of November 24, 1994, on Urban Leases, as will be explained in the following questions.

Thus, under the principle of party autonomy, enshrined in Article 1.255 of the Civil Code, the parties may freely establish those agreements that they deem convenient in their rental contract but, as has been indicated, since there is a specific regulation that governs this type of contract, such agreements will be limited by the content of this law, which, in many of its aspects, has the character of a mandatory rule, as is the case, for example, with the term of the contract, or in the rights of the parties, This is the case, for example, with the term of the contract, or the rights of the tenant when the rented property is sold, so that in such a case, the parties cannot agree whatever they wish, but must respect the limits established by law for each specific case.

What regulations apply to the lease (or rental) of real estate?

Thus, when we are dealing with a lease of a property or a dwelling, for example, in the first place, in order to determine which regulation will be applicable, we will have to analyze the type of property in question, since depending on the nature of the real estate, one or another different regulation will be applicable. Consequently:

If we are dealing with an urban property (such as an apartment or commercial premises), the reference standard will be Law 29/1994, of November 24, 1994, on Urban Leases.
On the other hand, if the lease relates to a rural property (such as, for example, an agricultural, livestock or forestry operation), the reference standard will be Law 49/2003, of November 26, 2003, on Rural Leases.

Regarding these rules, it is necessary to specify that they are of a state nature, so that this regulation will be applied in general to all leases of real estate located in the Spanish state. However, it is no less true that, in certain areas, such as, for example:

As regards rural property leasing contracts, there are Autonomous Communities that have their own regulations that must be taken into account (as in the case of Catalonia, where Book VI of its Civil Code, Articles 623-11 and following, regulates the leasing of rural properties).
Or in the area of tourist or vacation rentals, in which certain Autonomous Communities have also developed their own regulations that must also be taken into account in these sectors of activity.

Why is there a special regulation that expressly regulates urban real estate leases?

In view of the foregoing question, as has been observed, when we are dealing with a lease of urban property (for example, a house or an apartment), the rule that will regulate this lease will be a law created specifically for this purpose, i.e., the aforementioned Law 29/1994, of November 24, 1994, on Urban Leases.

Thus, it is necessary to understand that when the assignment of enjoyment or use refers to an urban property, the rules to be taken into account, from a legal point of view, are not the common rules that regulate any kind of lease contract, but rather, in view of the importance that the need for housing has in people's lives, the legislator has opted to create a specific regulatory framework for this kind of leases, in order to adequately protect the rights of the parties and to comply with the constitutional mandate established for this purpose, since let us remember that, in accordance with the provisions of Article 47 of the Spanish Constitution, all Spaniards have the right to enjoy decent and adequate housing, so that this objective is a guiding principle of the social and economic policy established by the constituent legislator, which all public authorities must try to promote and protect in their sphere of action.

Therefore, when we are dealing with a lease or rental of a dwelling, we must take as a normative reference the provisions of Law 29/1994, of November 24, 1994, on Urban Leases, which details all the aspects to be taken into account in these leases that have as their object a dwelling, which, as will be seen, will be of great importance in the event that the dwelling that is intended to be sold is rented.

Regarding this regulation, it is necessary to point out that it has undergone multiple partial reforms since its enactment, among which we can highlight those operated by the following regulations:

Law 13/1996, of December 30, 1996, on Tax, Administrative and Social Order Measures (HERE).
Law 50/1998, of December 30, 1998, on Tax, Administrative and Social Order Measures (HERE).
Law 55/1999, of December 29, 1999, on fiscal, administrative and social measures (HERE).
Law 1/2000, of January 7, 2000, of Civil Procedure (HERE).
Law 19/2009, of November 23, 2009, on measures for the promotion and procedural streamlining of rental and energy efficiency of buildings(HERE).
Law 39/2010, of December 22, 2010, on the General State Budget for 2011 (HERE).
Law 4/2013, of June 4, on measures to make the housing rental market more flexible and promote it(HERE).
Law 2/2015, of March 30, on the de-indexation of the Spanish economy (HERE).
Royal Decree-Law 21/2018, of December 14, on urgent housing and rental measures(HERE) subsequently repealed by Agreement of the Congress of Deputies dated January 22, 2019, as it results from Resolution of the same date published in the BOE of January 24, 2019 (HERE).
And the recent Royal Decree-Law 7/2019, of March 1, on urgent housing and rental measures(HERE).

In view of the above, in the present article, the reader will have the opportunity to understand what happens when one wants to buy or sell a dwelling (a house or an apartment, for example), which is rented. Also, additionally, at the end of this article, it will also be analyzed what happens when the leased property is not a dwelling intended for habitation, but another type of real estate, such as business premises.

Clarified these small basic notions on what is a lease, the type of property that can be leased; and, consequently, the applicable regulations in question. It is time to focus the article on the lessee or tenant and his right of enjoyment or use of, in this case, the leased property.

What usually happens to the right of use of a property that is sold?

Normally, the most usual thing is that, when the owner of a property proceeds to sell the same one, this house or apartment is free of tenants or occupants, so that in that property lives its seller (or not), but there is nobody else living in that property, neither as tenant, nor as inhabitant protected by any other class of right. Thus, when the sale of the property is formalized by means of the granting of the deed of sale, the seller transfers the full domain of the property to the buyer, who, therefore, acquires both the property of the dwelling, and the right of enjoyment or immediate use of the same, so that, being the property free of tenants, occupants or squatters, he can already dispose of it from the same moment in which the public deed is signed.

Thus, for example, Mr. Juan, owner of an apartment in Barcelona, sells it to Mrs. Maria, who buys it, free of tenants, squatters or occupants. Consequently, in the same act of the sale, the seller hands over the keys of the apartment to the buyer, from which moment Mrs. Maria can freely access her new apartment and live in it or use it without any problem as she pleases.

What happens if the property being sold is rented?

On the other hand, although it is less common in practice, it may also happen that the property in question, which is the object of the sale and purchase, is leased to tenants.

Thus, if the sale and purchase of the dwelling takes place under these circumstances, the buyer will acquire the right of ownership of the dwelling, but the right of enjoyment of the dwelling will remain in the hands of the lessee, which must be respected under the terms of the rental contract, with the guarantees established by law and, if applicable, with the agreements that the parties may reach, all of which will be discussed in the questions set forth below.

Thus, for example, Mr. Juan, owner of an apartment in Barcelona, wants to sell it to Mrs. María, who wants to buy it, but the said apartment is rented to Mr. Jesús, with a rental contract for a period of 5 years, 3 of which are still pending. In such a case, it will be necessary to determine what rights Mr. Jesús has, both with regard to the possible purchase of this property (it can already be stated here that he will eventually have a preferential acquisition right over the same), as well as in relation to the validity of the rental contract signed.

What is the fundamental aspect to take into account if the property is rented?

In the event that the property to be sold or purchased (depending on the perspective to be analyzed, of course) is rented, the parties must take into account that the legal regime to be applied will depend fundamentally on the agreements reached by the owner of the property and the tenant when formalizing the rental contract, that is to say, on what is technically known as the principle of party autonomy. Thus, in the first place, if the parties have expressly agreed on the recognition or waiver of a preferential acquisition right over the property, the parties' agreement must be taken into account for the possibility of its exercise or not, provided that such agreement does not contravene the content of an imperative rule (i.e., of mandatory compliance and on which the parties cannot dispose or waive its application).

Thus, following the previous assumption, if, for example, Mr. Juan and Mr. Jesús, in their rental contract, had agreed to waive the right of first refusal, Mr. Juan could sell the house to Mrs. María without any further problem.

Likewise, if on the contrary, they have agreed on the express recognition of a preferential acquisition right, as well as, if applicable, the terms thereof, such agreement shall also be binding for the parties.

On the other hand, if the parties have not agreed anything in this respect, the supplementary legal regime provided for in the Urban Leases Law will come into play, by virtue of which the so-called rights of first refusal in favor of the tenant are recognized, which will be explained in the following questions.

Following the previous example, on the contrary, if Mr. Juan and Mr. Jesús have not expressly agreed on anything, Mr. Jesús will have a preferential acquisition right over the property he has rented, in the terms that will be explained in the following questions.

At this point, now come the key questions or issues when considering the sale of a rented property: "The tenant's right of first refusal".

What circumstances will give rise to the existence or not of the tenant's right of first refusal in the event of sale of the property?

As indicated in the preceding question, to determine whether or not the tenant of a property has a right of first refusal on the property in the event that the owner wants to sell it, we will have to take into account what the parties have agreed in the rental contract. Thus:

AGREEMENT BETWEEN THE PARTIES: If the parties have agreed on its express acknowledgment in the contract, as well as its terms, the right of first refusal may be exercised as agreed.
EXPRESS WAIVER: If, on the other hand, the parties have expressly waived this right of preferential acquisition in the rental contract, the tenant will not have any right to acquire the property in a preferential manner in the event of sale by the landlord, so that the latter may formalize the sale with the buyer of his choice, without any further impediment. In this case, the landlord must simply notify the tenant of his intention to sell the property at least thirty days prior to the date on which the sale is to be formalized.
LACK OF AGREEMENT BETWEEN THE PARTIES (i.e., the lease does not say anything about it): In the event that the parties have not agreed anything in this regard, i.e., neither its recognition nor its waiver, in such case the supplementary legal regime provided by the Urban Leases Law will apply, in which a preferential acquisition right in favor of the tenant is effectively recognized, in the terms that we will try to explain in the following questions.

What rights does this right of first refusal actually encompass?

Under the umbrella of this preferential acquisition right, in reality, the law recognizes two distinct rights for the tenant, namely:

A right of first refusal. In relation to the right of first refusal, it is necessary to indicate that it refers to the possibility that the tenant, once the owner of the property notifies him of the fact that he has put the property up for sale and that he already has a potential buyer with whom he has agreed a sale price, the latter proceeds to "match the offer", so that if he accepts to pay the same price as the one agreed with that potential buyer, the tenant will have the right to acquire the rented property, in which case the seller must proceed to sell it to this tenant, thus discarding the initial offer accepted by the other potential buyer.
A right of withdrawal. On the other hand, the right of withdrawal refers to the situation that would arise in the event that the owner of the property does not respect the tenant's right of first refusal, so that he proceeds to sell the property to another buyer without giving him the possibility of "matching the offer" (because, for example, he does not notify him). In such a case, the tenant, once he has knowledge of the sale, by exercising this right of first refusal, will have the possibility of, by paying the price paid by this buyer, also acquiring the property of the dwelling, thus annulling the initial sale made in favor of a third party.

How is the right of first refusal exercised in practice?

FIRST STEP (FORMAL NOTIFICATION TO THE TENANT): At this point, in the event that the owner of the property decides to sell the property, once he markets the property and finds a potential buyer with whom he agrees the fundamental conditions of the transaction (in particular, the price), the owner must give the tenant a reliable notification of the decision to sell the property (with details of the price and other essential conditions of the transfer). In this case, in relation to this reliable notification, the law does not detail the concrete way in which it must be carried out, but the most usual for it is to resort to a burofax. In such communication, the sale price, the form of payment, the date foreseen for the signature of the deed of sale, as well as any other agreement between the parties that could be relevant, taking into account the specific circumstances of the case, will be detailed.
SECOND STEP (RECEIPT OF THE NOTICE): Once this reliable notification has been received by the tenant, the law grants him a period of thirty calendar days (i.e. one month), to exercise what is technically called a right of first refusal, i.e. a right to "match" the offer of that potential buyer, so that, in such a case, it will be the tenant who finally acquires the property, and not that potential buyer who made the offer initially accepted by the seller, because as indicated, the tenant has a right of first refusal.
THIRD STEP (FORMAL RESPONDING TO THE NOTIFICATION): For this purpose, in practice, the tenant must give the seller a reliable notification of his will to exercise the right of first refusal (normally, also by means of a burofax), in which he will communicate his will to "match the offer", summoning him for this purpose on a specific day and time, in a Notary's office of his choice, to formalize the deed of sale. In this case, the seller will have to accept the proposal of his tenant and sell the property to him, discarding the offer initially made by the other potential buyer.

Thus, returning to the previous example, if Mr. Juan, owner of an apartment in Barcelona, wants to sell it to Mrs. Maria, who wants to buy it (having agreed on a sale price of 300.000€), but the apartment is rented to Mr. Jesus, with a rental contract of 5 years, with 3 of them still pending to be fulfilled, the following procedure must be followed:

Mr. Juan must send a burofax to Mr. Jesús, notifying him that he wishes to sell the rented property, and that for this purpose he already has a buyer who offers him 300,000 euros.
If Mr. Jesus receives this notification on March 1, he will have until March 31 to decide what to do.
If Mr. Jesus decides to "match the offer", he must send a burofax to Mr. Juan in which it is so stated, and he must also summon him to a Notary Public of his confidence, for example on March 25, to formalize the purchase. In such a case, Mr. Juan will be obliged to sell the property to Mr. Jesús, since the latter has a preferential right of acquisition.

What happens if the tenant does not exercise the right of first refusal?

Once thirty calendar days have elapsed since the intention to sell the property has been reliably notified, without the tenant having expressed his intention to exercise the right of first refusal explained in the preceding question, or, if applicable, having reliably notified his intention to waive the same, the owner of the property may now formalize the sale and purchase with the buyer that has been found. For this purpose, they will execute the corresponding deed of sale and purchase before a Notary Public, in which a record must be made of the reliable notification given to the tenant, in order to verify that the period of thirty calendar days has elapsed, otherwise the deed cannot be registered in the Land Registry.

Thus, following the proposed example, if Mr. Jesus does not want to buy the house, once the 30 calendar day period has elapsed, i.e., as of April 1, Mr. Juan, as owner, will be able to sell the property to Mrs. Maria for the agreed 300,000 euros.

What would happen if the owner does not formalize the sale of the property?

In the event that, once the owner has been reliably notified of the decision to sell the property, for whatever reason (for example, because the potential buyer finally "backs out" and does not buy it), the owner does not sell the property, it is necessary to state for the record that the law determines that the effects of this notification will expire 180 calendar days after the notification. Thus, once these six months have elapsed since the notification, without the sale having materialized, if the owner subsequently decides to sell the property and finds a buyer who makes a new offer, in such case a new reliable notification must be made to the tenant, who will have a new period of thirty calendar days to exercise the right of first refusal granted by the law, in the terms set forth in the preceding questions.

Thus, following the proposed example, if Mrs. Maria does not finally acquire the property, the effects of the notification would expire at the end of August, so that as of August 29, if Mr. Juan finds a new potential buyer who offers him those 300,000 euros, he should notify Mr. Jesus again, so that the latter, within a new period of thirty calendar days, can exercise the right of first refusal if he deems it appropriate.

What would happen if the homeowner does not notify the tenant of his willingness to sell the property and sells it?

In the event that the owner of the property, disregarding the provisions of the law, decides to sell the property to a buyer without giving reliable notification to the tenant, in such a case what is technically called the right of withdrawal will come into play, the characteristics of which will be developed below. Thus, in this case, once the sale and purchase has been formalized, the buyer will be obliged to notify the tenant of the conditions under which the sale and purchase was formalized (normally, by means of the delivery of a simple copy of the deed via burofax), and from that moment on, the tenant will have the right to exercise the aforementioned right of withdrawal.

Forthis purpose, the tenant, within this period of thirty calendar days after being notified of the essential conditions of the sale (or, if applicable, having knowledge of them by any means), must file a legal action against the buyer of the property in order to exercise this right of withdrawal and, likewise, deposit the amount of the purchase price in the deposit account of the Court. Finally, if this legal action is successful, the effects of the sale and purchase between the former owner and the buyer will be "annulled", so that the buyer of the property will recover the money he paid for the property (the amount that the tenant has deposited in the Court when filing his lawsuit), but will lose his property, which will remain in the hands of the tenant who has exercised the right of withdrawal.

Thus, taking the previous example, if Mr. Juan sells the house to Mrs. María for those 300,000€ without notifying the transaction to Mr. Jesús, the latter will have the right to sue Mrs. María to exercise the right of withdrawal. For this purpose, together with the lawsuit, which must be filed within 30 days after he has had knowledge of the transaction, he will deposit the €300,000 of the purchase price in court. Finally, if the claim is successful and is upheld, the 300,000€ will be delivered to the buyer, who will recover his money but will lose the ownership of the property, while the ownership of the property will remain in the hands of the tenant, Mr. Jesus, who has exercised the right of withdrawal.

Likewise, it is necessary to specify that this right of withdrawal may also be exercised by the tenant in the event that the owner of the property, when notifying him of his intention to sell the property, does so in an incomplete manner (for example, hiding information on the fundamental agreements reached), or informing him of a higher sale price than that which is finally formalized in the transaction, all for the purpose of providing inaccurate information to the tenant, with the objective of preventing the latter from exercising the right of first refusal, for whatever reasons.

Thus, returning to the previous example, if Mr. Juan sells the house to Mrs. María for those 300,000€, but when notifying Mr. Jesús he indicates that the sale price will be 400,000€, in order to dissuade him from purchasing the house, but finally sells it for the 300,000€ agreed, in such case Mr. Jesús may exercise the right of withdrawal in the terms set out above.

Does the right of first refusal always take precedence over any other person?

In fact, the Urban Leases Law establishes that the tenant's right of first refusal shall take precedence over any other similar right that may exist, with two exceptions:

In the case of the right of withdrawal of the co-owners (article 25.4 LAU): That is to say, in the event that the property to be acquired has several owners, if only a portion is purchased, it must be taken into account that the other owners have "preference" when purchasing that part with respect to the right that the tenant may have.
In the event that a conventional right of withdrawal has been agreed and the same is registered in the Land Registry when the lease contract was entered into (article 25.4 LAU): That is to say, that in the past, that property was sold to the current owner, but the previous owner has reserved a right to "repurchase" the property, and the same is registered in the Land Registry.

Are there any exceptional cases in which the tenant's right of first refusal cannot be exercised?

Indeed, although the possibility of its exercise is the general rule, the law determines two exceptional cases in which the rights of first refusal in favor of the tenant cannot be applied. Thus, these are:

In the event that the leased dwelling is sold together with all the dwellings or premises owned by the lessor that form part of the same property (art. 25.7 LAU).
As well as in the case of a joint sale, by different owners, and to the same buyer, of all the apartments or premises of a property (art. 25.7 LAU).

However, to avoid misunderstandings, the law makes it clear that in the event that the property has only one dwelling, the tenant will have the right of first refusal in the terms set forth in this article (art. 25.7 in fine LAU).

We now leave aside the tenant's right of first refusal, and focus on the other major concern of tenants and landlords: "what happens to the agreed term of the lease as a result of the sale to a new owner".

If the sale of the property to a buyer other than the tenant is finally formalized, what happens to the rental contract?

In the event that finally, either because the tenant has waived its right of first refusal in the rental contract, or because in view of the conditions of the sale it is not interested in exercising it (i.e. it prefers not to buy the property), the property in question is sold to a buyer other than the tenant, it is necessary to determine what will happen to the rental contract that the former owner of the property, who has now sold it, entered into with the current tenant.

To this effect, it is necessary to bring up the provisions of Article 14 of the Urban Leases Law, which establishes that the purchaser of a leased property will be subrogated to the rights and obligations of the lessor during the first five years of the term of the lease (or seven years if the lessor is a legal entity), even in the event that the parties have agreed that the sale of the property will extinguish the lease.

However, it should also be noted that, in accordance with the aforementioned provision, as a general rule, if the lease contract has a term of more than 5 years (or 7 years if the previous lessor was a legal entity), the acquirer will also be subrogated for the entire agreed term.

Thus, returning to the previous example, if Mr. Juan finally sells the house to Mrs. María, the latter will have to respect Mr. Jesús' contract, so that he will be able to remain in the house, as a tenant, for the three years remaining on his contract, as had been the case in the previous scenarios.

Thus, likewise, if this rental contract initially entered into between Mr. Juan and Mr. Jesús had a duration of 10 years, if the property is sold after two years, the new buyer, Mrs. María, must in principle respect the duration of this rental contract, except in very exceptional circumstances provided for in the Mortgage Law.

Finally, and taking advantage of this paragraph, it is necessary to indicate that all these rules will apply to rental contracts that have been signed when the current wording of the Urban Leases Law was already in force, that is, from March 6, 2019, while for previous contracts (especially those called "old rent"), it will be necessary to analyze the regulations in force at the time the contract was concluded to verify the rights that both the seller, the buyer and the tenant had. In these cases, without a doubt, it may be highly advisable that the parties consult a lawyer specialized in the matter who can advise them adequately in view of their specific circumstances.

In this regard, the following rules should be taken into account:

The real estate lease contract, its possible registration in the Real Estate Registry and a fiscal brushstroke to take into account...

Is it possible to register a lease at the Land Registry?

Indeed, although it is not a very common practice nowadays, the interested parties should know that it is possible to register a rental contract in the Land Registry. For this purpose, the interested parties must go to a Notary Public and notarize this rental contract, in order to subsequently present it to the Land Registry, after payment of the corresponding Transfer Tax.

Regarding the benefits of this registration, it should be noted that, until 2019, this was very important, since in the event of sale of the rented property, the tenant's right was only protected against the new owner if the rental contract was registered. However, with the current regulations, this is no longer the case, since the tenant's right is protected in any case, so that the registration of the rental contract may have lost some interest.

However, at present, the registration of the rental contract can also be very interesting for the owner of the property because, in the event of non-payment by the tenant, if it has been agreed in the contract that the contract will be terminated for non-payment of the rent, this termination will take place as of right (i.e., it will be annulled without the need to hold a prior declaratory judgment) once the landlord has requested the tenant to pay or comply with the contract, and the tenant has not answered the request, either judicially or notarially, (i.e. it will be annulled without the need for a prior declaratory judgment) once the lessor has served a judicial or notarial summons on the lessee, urging him to pay or comply, and the latter has not answered the summons within ten working days (see in this respect article 27.4 of the Lease Law).4 of the Urban Lease Law).

Therefore, if this situation of non-payment occurs, and the contract has been registered in the Land Registry with these terms, the owner will be able to recover possession of the property in a much faster way.

On the other hand, the negative aspects of this option are that it will have a higher cost, since it will be necessary to grant a deed of elevation to public deed of the rental contract and register it in the Land Registry, which has a cost, and because it will also be necessary to face the derived fiscal cost, in the form of Transfer Tax, which, in the case of Catalonia, will be taxed at 0.5% of the total amount of the rents agreed in the contract. However, in the case of a habitual residence, we can benefit from a tax exemption, by virtue of the recent Royal Decree-Law 7/2019, of March 1, on urgent measures regarding housing and renting.

If you would like to obtain a personalized quotation for this type of deeds, please contact our specialist department directly at presupuestos@jesusbenavides.es.
And also, if you want more information about the fiscal cost of this act, you can find out about it directly on the website of the Catalan Tax Agency (HERE).

The lease contract should not be confused with other similar but different types of possession; and at the same time, the different rights of the tenant should be distinguished according to the type of lease in question.

Is being in precariousness the same as living in rented accommodation?

Unlike a rental contract, the figure of precariousness is a different institution, and corresponds to that circumstance in which the owner of a dwelling consents or tolerates that another person lives in the same for free.

In this case, if the dwelling in question is sold, the tenant will not have a right of first refusal, since there is no rule that establishes this.

Is a lease the same as a right of use or right of habitation?

Unlike the lease contract, the rights of use and habitation are real rights that allow, in the first case, the use of a property in the manner established in the title of incorporation (or, failing that, to meet their needs and those of those who live with them), while in the case of the right of habitation, it allows them to occupy the rooms and annexes of a dwelling that are detailed in the title of incorporation (or, failing that, those that are necessary to meet their housing needs and those of those who live with them).

Regarding these real rights, it is necessary for the interested parties to know that they are constituted for life (unless otherwise provided) and are non-transferable, so that the holder cannot sell it.

Thus, if a dwelling is sold with any of these rights in rem, the property will continue to be encumbered by these rights in rem as far as the new buyer is concerned, so that he must maintain and respect these rights of use or habitation, which will be extinguished either upon the death of their holders, or by waiver of the holder, and without the holder of such right having a preferential right of acquisition.

Is a long-term rental the same as a vacation or short-stay rental?

In the event that the rental of the dwelling is intended for short-term vacation use, the applicable regulations are of course not the same as for an ordinary rental of a dwelling, but in this case, each Autonomous Community has its own regulations, so that the same must be taken into account in order to determine the rights of the parties in each case.

In any case, it is reasonable that such regulations do not establish a preferential acquisition right in favor of the person who is temporarily enjoying such vacation home.

What happens when the rented property is not a dwelling intended for human habitation?

In the event that the rented real estate object of sale was not a dwelling intended for the habitation of persons, but another type of real estate, we will have to look at the specific type of property to determine the applicable regime. Thus:

In the case of leases of urban properties intended for use other than housing (such as commercial premises), the provisions of Article 31 of the Urban Leases Law will apply, which determines that the same regime of Article 25 of the Urban Leases Law will apply to the tenant's right of first refusal, so that effectively, the tenant of, for example, commercial premises, will also have the right of first refusal in the event of sale of the same.
In the case of a parking space, although there is some controversy in this regard, the majority doctrine considers that we are not dealing with an urban property, so that the rules of the Urban Leases Law would not apply, but the general rules of the Civil Code, so that in such case the tenant of the parking space will not have a preferential right of acquisition in the event of sale of such parking space, unless, of course, it has been agreed in the contract or the parking space is an inseparable annex of a dwelling.
In the case of rural properties, the provisions of Law 49/2003, of November 26, 2003, on rural leases, Article 22.2 of which establishes that "in any inter vivos transfer of leased rural properties, including donation, contribution to a company, exchange, allotment in payment or any other transfer other than purchase and sale, of the bare ownership, of a specific portion or of an undivided share thereof, the lessee who is a professional farmer will have the right of first refusal". Thus, if these conditions are met, there will also be a preferential right of acquisition in favor of the lessee, in which case the procedure provided for in said regulation will have to be observed in order to notify the intention to sell and, if appropriate, to agree on the sale and purchase with the potential buyer who has made the offer or, failing that, with the lessee, if he matches said offer. If the rural property is located in Catalonia, in such case the legal regime provided for in articles 623-11 and following of Book VI of the Civil Code of Catalonia must be taken into account.

Conclusion

In the hope that this article has resolved your doubts as to what aspects should be taken into account when selling or buying a property that is rented, the following is a summary of the fundamental aspects covered:

Most often, when a property is sold, it is not rented, so that when the sale is formalized, the buyer can dispose of it and use it as he/she sees fit.
However, it may also happen that the property being sold is rented, in which case, it will be necessary to take into account the rights that the tenant may have, if any, and which are recognized by the Urban Leasing Law.
To know what rights the tenant has, the first and most important thing is to analyze the rental contract, to see if the seller and the tenant agreed or not to waive the right of first refusal.
If the owner of the property and the tenant, in the rental contract, agreed to waive the right of first refusal, the owner of the property may sell the property to the buyer of his choice, without any limitation as regards the tenant's possible rights.
If nothing has been agreed or expressly acknowledged, the tenant will have the right to acquire the leased dwelling. For this purpose, if the landlord has found a prospective buyer, he must notify the tenant in a reliable manner so that the latter, within 30 days, if he considers it appropriate, may match the offer. If this happens, the seller must discard the offer of the prospective buyer who has accepted, and sell the dwelling to the tenant.
On the other hand, if the tenant does not state anything or waives this right, the seller may sell the property to the potential buyer without any further problems. Whenever the sale of a leased property is signed at the notary's office, the lease agreement in question must be presented to the notary to verify its clauses.
In the event that this right of first refusal is applicable, and the seller does not respect it (by not notifying the sale, for example, or by doing so at a higher price so that the tenant desists from buying the property), once the sale takes place, the tenant may exercise the right of withdrawal, so that, by contributing the purchase price paid by the buyer, the tenant may obtain ownership of the rented property.
If the sale is finally made to a buyer other than the tenant, the new owner will be subrogated to the lease for the entire term of the lease.
The rental contract, if the parties so wish, can be registered in the Land Registry. For this purpose it will be necessary to notarize the contract before a Notary Public, pay the corresponding tax and submit the deed for registration in the Land Registry.
It is important to always bear in mind the type of property leased (dwelling, garage, premises, land, etc.) as the regulations and, therefore, the rights of the lessee may be different.

December 2023

1.- RENUNCIATION OF INHERITANCE AND VULGAR SUBSTITUTION. IF THE TESTAMENTARY DESIGNATION TO THE SUBSTITUTES IS GENERIC ("CHILDREN" OR "DESCENDANTS"), WITH THE SIMPLE AFFIRMATION THAT THESE DO NOT EXIST, IT IS ENOUGH TO FORMALIZE THE RENUNCIATION AND SUBSEQUENT ADJUDICATION TO WHOM IT CORRESPONDS:

Attached (HERE) the Resolution of the DGSJFP of October 30, 2023 (BOE of November 22, 2023), where the DG resolves a case of an acceptance of inheritance of a woman, deceased widow, with two daughters, whom, in her will, she designated as heirs in equal parts, with vulgar substitution by their respective children or descendants. When the acceptance of the inheritance is formalized, one of the sisters renounces to the inheritance, and in the deed, the renouncing one simply states that she has no children or descendants (without proving it in any way), so that the other sister is awarded the whole inheritance. The Registrar denies the registration because he understands that the non-existence of children or descendants must be accredited (by notoriety deed or by any means valid in Law).

The authorizing Notary appealed the qualification and the DG, aligning itself with the latter, revoked the qualification note, confirming that, when the testamentary substitution is made in a generic form (with expressions such as "children" or "descendants", that is to say, without nominative appeals), the simple manifestation of the non-existence of these is sufficient to formalize the renunciation and subsequent acceptance by the heir favored by said renunciation.

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2.- SALE OF LEASED PROPERTY. IT IS NOT NECESSARY TO PROVIDE THE TENANT'S WAIVER OF THE RIGHT OF FIRST REFUSAL IN ORDER TO REGISTER:

Attached (HERE) the Resolution of the DGSJFP of November 8, 2023 (BOE of November 30, 2023), where the DG resolves a case of a sale and purchase of leased real estate (premises), in whose deed the Notary certifies that he has been shown a deed where the lessee waives his right of preferential acquisition recognized by the LAU.

The Registrar denies the registration, alleging that it is necessary that he also be accredited, with evidence, the details and circumstances of the waiver (providing a copy of the waiver deed where the Registrar can analyze its terms, the legitimacy of the person granting it, etc.). The DG revokes the qualification note, considering that the Notary's attesting that the lessee has waived his right of first refusal is sufficient, since the Law does not attribute powers to the Registrar to qualify the terms of such waiver.

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3.- IN CATALONIA THE PRE-LEGATEE CAN TAKE POSSESSION, BY HIMSELF, OF THE PRE-LEGACY ASSETS:

Attached (HERE) the Resolution of the DG de Dret, Entitats Jurídiques i Mediació de Catalunya of October 27, 2023 (DOGC of November 8, 2023), where a case is resolved regarding an acceptance of inheritance with several co-heirs, where one of them, in addition, being a pre-legatee of a property, accepts his part of the inheritance and, also, unilaterally, is awarded said property that forms the pre-legatee. The Land Registry refuses the registration on the grounds that, in order for such adjudication to take effect, the agreement of all the heirs is necessary.

The authorizing Notary Public appeals and the DG, aligning itself with the latter, revokes the qualification note, recalling that, in accordance with the CCCat (art. 427-22), the legatee can take possession of the legacy himself if it is a pre-legacy.

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4.- SALE AND PURCHASE WITH RESOLUTORY CONDITION IN CATALONIA. INTERPRETATION OF THE PERCENTAGES OF NON-PAYMENT NECESSARY TO TERMINATE THE CONTRACT:

Attached (HERE) the Resolution of the DG de Dret, Entitats Jurídiques i Mediació de Catalunya of November 10, 2023 (DOGC of December 1, 2023), which resolves a case related to a deed of termination of sale, in accordance with an agreed and registered resolutory condition, due to the non-payment of amounts owed.

In this case, the DG establishes the correct interpretation of article 621-54 CCCat, by virtue of which, in order to terminate the sale and purchase due to non-payment of the deferred amounts (so that the sellers recover the ownership of the property) it is necessary that the unpaid amounts exceed 15% of the full price (total price of the sale and purchase), so that, only once unpaid amounts have accumulated that exceed 15% of the total purchase price, the sale and purchase can then be terminated.

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5.- ARE REGISTRABLE THE AGREEMENTS OF A GENERAL MEETING TO WHICH THE ADMINISTRATORS DO NOT ATTEND:

Attached (HERE) the Resolution of the DGSJFP of November 15, 2023 (BOE of December 4, 2023), where the DG resolves a case of a General Meeting of Shareholders to which, the administrators of the company do not attend.

The Mercantile Registrar refuses the registration of the resolutions adopted, for this reason, under Article 180 of the LSC ("the administrators must attend the general meetings"). The Notary appealed the qualification, and the DG, aligning itself with the latter, confirmed that, in effect, the non-attendance of the administrative body at the general meeting is not a reason for the nullity of the same, but what, if any, will generate the liability of the administrators provided for in article 236 LSC.

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NOTARIAL MINUTES OF THE MEETING. IN ORDER TO BE ABLE TO REGISTER THE PREVENTIVE ANNOTATION IN THE MERCANTILE REGISTRY, IT IS NECESSARY TO PROVE THAT THE NOTARIAL REQUEST TO THE ADMINISTRATORS HAS BEEN MADE:

Attached (HERE) the Resolution of the DGSJFP of November 14, 2023 (BOE of December 4, 2023), where the DG resolves a case of refusal of preventive annotation of request of notarial minutes of meeting, in the Mercantile Registry. In this case, a shareholder wants the notarial minutes of a general meeting to be taken and, to this end, sends an email to the chairman of the board of directors requesting this, who replies in the affirmative. Said shareholder tries to have the preventive annotation made in the Mercantile Registry on the basis of this Email, and the Registrar denies it, stating that for it to be possible to register the preventive annotation, it is necessary to provide the notarial request to the administrators.

The DG confirms the qualification note and reminds that, in order to be able to practice the preventive annotation that is sought, it is necessary to prove that the notarial requirement has been made to the administrators (art. 104.1 RRM).

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7.- SALE OF REAL ESTATE BY RELIGIOUS CONGREGATION:

Attached (HERE) the Resolution of the DGSJFP of October 23, 2023 (BOE of November 22, 2023), which may be useful in this case of transfers, as it summarizes and analyzes in detail the legislation and documentation necessary to formalize the sale of a property belonging to a religious congregation.

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8.- ELEVATION TO PUBLIC DEED OF THE LEASE CONTRACT SUBSCRIBED BY THE PREVIOUS OWNER OF THE PROPERTY:

Attached (HERE) the Resolution of the DGSJFP of October 2, 2023 (BOE of November 2, 2023), where the DG resolves an appeal filed against the refusal of the registration of a deed of elevation to public of a lease contract.

Lease agreement entered into by the previous owner (as lessor) and a lessee. The owner does not pay the mortgage loan that encumbers the leased property and this, finally, is subject to foreclosure, in which process, the property is awarded to a third party, in favor of which the property is currently registered. In this foreclosure process, the new owner who is awarded the property is aware that the same is leased, and the award, in the judicial process, is granted safeguarding the rights of said lessee. Subsequently, the lessee tries to register his right, and the Registry denies it for lack of successive tract (art. 20 LH), that is to say, that the person who signed the lease as lessor does not coincide with the current registered titleholder.

The DG revokes the qualification, considering this case an exception to the general principle, since in the foreclosure proceeding in which the current registrant was a party, the tenant's right to occupy the property was safeguarded.

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9.- HORIZONTAL PROPERTY. FROM PRIVATE ELEMENT TO COMMON ELEMENT. THE CORRECT WAY IS THE AGREEMENT OF AFFECTATION AND CONVERSION INTO COMMON ELEMENT:

Attached (HERE) the Resolution of the DGSJFP of November 14, 2023 (BOE of December 4, 2023), where the DG resolves an appeal filed against the refusal of the registration of a deed of segregation of a private element and subsequent sale in favor of the community of owners (to convert it then in common element of the horizontal property).

The DG confirms the defect and, in summary, tells us that if you want to convert something private into a common element, the correct way is not its sale in favor of the community, but its configuration as a common element, modifying the description of the building, and with the unanimous agreement of the community of owners as it affects the constitutive title.

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10.- NEW FUNCTIONALITIES IN THE ELECTRONIC HEADQUARTERS OF THE TAX AGENCY OF CATALONIA:

New features are summarized (HERE) and improvements in the electronic headquarters of the ATC:

Tax on property transfers and documented legal acts (ITPAJD): New features have been incorporated in the telematic forms for forms 600 and 620 and in the help program for forms 650 and 660:

Adaptations to the telematic form of the ITPAJD model 600 to admit foreign transferors without tax identification number in transactions at the DRG rate (guarantee and loan rights in rem).
Adaptations to the telematic form model 620, sale and purchase of certain used means of transport, to allow exporting the self-assessment and recovering its data when there is more than one acquirer, in the case of the purchase of a boat, and to show separately the types of motorhome vehicle.

Regarding inheritance and gift tax (ISD):

Adaptations of the inheritance modality aid program to introduce current or savings account deposits with IBAN format.

Likewise, the automated incorporation of the public deed in the ITPAJD (form 600) and ISD (forms 650, 651 and 653) self-assessment files has been introduced . Therefore, it is no longer necessary for the citizen to provide the public deed if the notary's office has previously sent the notarial informative declaration to the Tax Agency of Catalonia.

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11.- LCI MINUTES. IT IS NECESSARY TO ASK THE CLIENT HOW HE WANTS HIS FUTURE AUTHORIZED COPIES OF BOTH THE MORTGAGE LOAN AND THE SALE AND PURCHASE:

Attached (HERE) Note from the Board of Directors of the Notarial Association of Catalonia in which, in response to a communication received in several notaries' offices from the bank ING (requesting that all copies of their CV + PH deeds be issued in electronic format), it is indicated that, in the CV + PH, it is the buyer (who pays for the deed) who must choose the format of their authorized copies (paper or electronic).

For this purpose, it is recommended to ask the client about this issue in the pre-LCI minutes, record it in the minutes, and based on the client's preference, issue the copy as requested by the acquirer.

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12.- INSTRUCTION FOR THE VERIFICATION OF REAL ESTATE VALUES 2024:

Attached (HERE) the Instruction for the verification of real estate values of the Tax Agency of Catalonia for taxable events (ITP, Inheritance and Donations) for the year 2024.

It should be remembered that this table is of vital importance when we do not have the reference value of the cadastre of the property in question. Always, in the first place, the reference value for tax purposes must be taken into account. Suppletory, in the absence of this, this table will continue to be used as it was traditionally done. Multiplying the cadastral value by the corresponding multiplier coefficient, in order to obtain the minimum tax value.

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13.- HORIZONTAL PROPERTY AND SEGREGATION / DIVISION OF PRIVATE ELEMENT. IF THE STATUTES ALLOW IT, THEY ALSO, IMPLICITLY, AUTHORIZE THE NECESSARY WORKS TO EXECUTE IT:

Attached (HERE) the Resolution of the DGSJFP of November 2, 2023 (BOE of November 30, 2023), where the DG resolves a case related to a segregation of a local, resolving that, when in the constitutive title of the horizontal property the possibility of segregating or dividing privative elements is foreseen without need of collective agreement of the owners' meeting, implicitly the works and modifications that this segregation needs are being authorized, unless express clause to the contrary.

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14.- SALE OF HABITUAL RESIDENCE OF THE FAMILY. THE CONSENT OF BOTH SPOUSES IS REQUIRED, ALSO FOR FOREIGNERS:

Attached (HERE) the Resolution of the DGSJFP of October 25, 2023 (BOE of November 22, 2023), where the DG resolves a case of a sale of a property belonging to a foreigner, resolving that the application of article 1320 CC (and therefore its counterpart in the Catalan civil code) regarding the need for consent of both spouses to dispose of the habitual residence of the family, is independent of what the governing law of the matrimonial property regime provides, and that according to the Regulation 24 June 2016, it is also applicable to foreign marriages.

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15.- IMPORTANT DISTINCTION BETWEEN PARTITION MADE BY THE TESTATOR AND PARTITIONAL RULES:

Attached (HERE) the Resolution of the DGSJFP of October 27, 2023 (BOE of November 22, 2023), where the DG resolves a case related to a deed of acceptance of inheritance and hereditary adjudications, in which, synthesizing the jurisprudence of the Supreme Court in this matter, it clarifies the important differentiation between a partition made in the will itself and the mere "partitional rules".

The Center points out that when the testator carries out in the will all the partitional operations (inventory, appraisal, liquidation and adjudication of lots) we are dealing with a true partition made in the will. On the other hand, when the testator limits himself to expressing his will so that at the time of the partition, certain assets are awarded to each heir in payment of his assets, we are dealing with mere partition rules.

November 2023

1.- BE VERY CAREFUL. ERRORS IN NOTARY'S OFFICE THAT GENERATE CIVIL LIABILITY:

Attached (HERE) a Note from the General Council of Notaries, detailing the main claims that the Civil Liability Insurance for Notaries is having to deal with in the event of negligence, errors or professional malpractice. Below are some outstanding examples:

Various complaints regarding authorized documents with persons with impaired mental capacity. Exercise extreme caution with elderly persons showing signs of cognitive impairment, incapacitated / with support measures for the exercise of legal capacity, under guardianship, conservatorship, etc.
Identity theft. Be extremely diligent when verifying the identity of the person with his/her ID / NIE / Passport, etc. photo.
Verification of mortgage encumbrances. Take extreme precautions with mortgages that have been economically cancelled, but not registered. Require documentary proof that the secured loan has been paid.

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2.- NEW REMINDER. NEW DEVELOPMENTS IN FOREIGN INVESTMENTS:

Attached (HERE) an OCP informative note with a summary of the main novelties of Royal Decree 571/2023, on foreign investments. The following are considered as foreign investments:

Foreign investments in Spain:

Participation of a NON-RESIDENT in Spanish companies exceeding 10% of the capital stock.
Acquisition of real estate in Spain by NON-RESIDENTS in excess of 500,000 euros.
In the event that the funds used in the investment originate in non-cooperative jurisdictions, prior declaration is required. The order of February 9, 2023 (HERE) contains the list of non-cooperative jurisdictions.

Spanish investments abroad:

Participation in the capital of non-resident companies exceeding 10% of the capital stock.
Acquisition of real estate located abroad for more than 300,000 euros.
In the event that the destination of the investment is a non-cooperative jurisdiction, the prior declaration is also required.

Obligations of the Notary:

When the regulatory development of the Royal Decree comes into force, it will be mandatory for the Notary to send the information on the foreign investment to the General Council of Notaries.
During the transitional period, the telematic filing of tax returns is done through AFORIX.
The obligation of the notary public to send to the Directorate General for International Trade and Investments, in writing, during the months of January and July of each year, a list of those intervened transactions considered as foreign investment, during the preceding six-month period for which the notary public has not been requested to submit the corresponding declaration, remains in force.

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3.- IT IS POSSIBLE TO DECLARE THE END OF WORK PARTIALLY IN A HORIZONTALLY DIVIDED BUILDING:

Attached (HERE) the Resolution of the DGSJFP of September 19, 2023 (BOE of October 26, 2023), where the DG solves a case of a building, with several floors, divided horizontally, where the end of work of only part of them is declared (specifically, the first floor and the second floor, not the rest of the floors).

In this case, the DG accepts this, stating that there is no inconvenience in that the proof of completion of the work may be partial, by phases, and even by floors; since it may happen in practice that there are unfinished elements, without this obstructing the registration of the completion of others, as long as it is duly accredited.

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4.- PARTITION OF INHERITANCE BY ACCOUNTANT PARTITIONER. CARE WITH THE CONFLICTS OF INTEREST:

Attached (HERE) the Resolution of the DGSJFP of September 5, 2023 (BOE of October 25, 2023), where the DG resolves that in a deed of acceptance, partition and adjudication of inheritance, the accountant-partidora has not limited herself to the strictly partitional and, in the adjudications, has carried out dispositive functions that require the intervention of the heirs.

In addition, there is a conflict of interest between two sibling co-heirs, since one is the guardian of the other, and therefore exercises his legal representation. As both of them are interested in the inheritance, and one of them is legally represented by his brother, there is a conflict of interests and in this case the intervention of a legal defender is necessary.

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5.- SALE OF PARKING SPACE IN AN UNDIVIDED PROPERTY. IT IS NECESSARY TO DESCRIBE CONCRETELY THE PARKING SPACE:

Attached (HERE) the Resolution of the DGSJFP of July 28, 2023 (BOE of October 12, 2023), where the DG resolves a case of sale of an undivided participation (1.329%) of a property, destined to parking of vehicles. The deed contained the description of the registered property as a whole (consisting of the basement floor of a building intended for parking and storage rooms), but not the description of the specific parking space whose exclusive use and enjoyment was attributed to the undivided interest of the transferred property.

The DG, aligning itself with the Registrar, considers that it is necessary that, in the deed of sale, the boundaries and surface area of the parking space to be transferred be described in detail.

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6.- LAND REGISTRY AND LAW 11/2023. NEW DEADLINES FOR QUALIFICATION OF DOCUMENTS:

Attached (HERE) the Resolution of the DGSJFP of July 7, 2023 (BOE of August 15, 2023), which approves the schedule for implementing the law 11/2023 of digitalization of registry actions. This law establishes the electronic signature of all registry entries and documents and the keeping of a protocol in electronic format. The aforementioned resolution includes two annexes with a schedule for the implementation of the electronic signature in each of the Land Registries of Spain, and extends the ordinary term of registry qualification from 15 working days to 30 working days, for a period of one month from the date on which the implementation of the digital actions begins.

Attached to the summary is the resolution with the annexes containing the respective starting dates of the electronic signature implementation phase, so that all employees of the notary's office can consult them and take into account that within one month from that date, the qualification period is not 15 days as usual, but 30.

The importance of this consultation lies in the fact that cancellations of mortgages registered in all the registries in Spain are authorized, and each of them has a date foreseen for the implementation of this electronic signature!

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7.- CIVILIAN CITIZENSHIP AND ITS DIFFICULTIES OF PROOF. IT IS NECESSARY TO GIVE MUCH IMPORTANCE TO THE MANIFESTATION THAT IS INCLUDED IN THE DEED:

Attached (HERE) the Resolution of the DGSJFP of October 3, 2023 (BOE of November 2, 2023), where the DG solves a case related to the proof of the civil residence of a deceased and its importance to determine the applicable inheritance law.

In this case, the deceased, in her will, states that she has common civil status. However, her heir (husband), when accepting the inheritance, in said deed of acceptance states that the civil domicile of the deceased was that of Ibiza, and based on the same, he is awarded the entire inheritance (unlike this, if the civil domicile were common, as the deceased had no descendants, but did have living ascendants, these would be legitimaries). When this deed of acceptance of inheritance is presented for registration, the Registrar rejects it, considering that the manifestation of the common civil tenancy made by the deceased in her will prevails.

The DG, aligning itself with the Registry, considers that the proof of the civilian citizenship is very difficult (except in those cases in which the express manifestation is registered in the Civil Registry). Therefore, in case of doubts, the declaration of the interested party made before a Notary Public (since it has been made being duly informed by the notary public) must prevail, even over what may result from extrajudicial documents (such as a census certificate from which it is clear that the person has been registered at that address for more than 10 years), since administrative residence does not always coincide with the actual address (which is what determines civil residence).

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8.- THE ADMINISTRATOR WITH EXPIRED OFFICE CAN CALL THE GENERAL MEETING FOR THE RENEWAL OF THE ADMINISTRATIVE BODY AND TO PRESENT ANNUAL ACCOUNTS:

Attached (HERE) the Resolution of the DGSJFP of October 31, 2023 (BOE of November 21, 2023), in which the DG resolves that the General Meeting convened by an administrator with expired office is valid, provided that such General Meeting is convened to renew the administrative body and to approve the annual accounts of several fiscal years as a way to overcome the closing of the Land Registry.

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9.- PREVENTIVE POWERS AND INTERREGIONAL ASPECTS:

The following is a brief summary of a paper on preventive powers and aspects to be taken into account in the field of inter-regional law:

Great usefulness of the preventive power of attorney: it avoids the family having to resort to judicial support measures (which take more than a year to set up, plus the cost of lawyers, etc.).
Soon it will be possible to consult telematically, in the Civil Registry, the validity of these powers of attorney. Caution to be taken into account whenever an attorney-in-fact goes to the Notary to sign with one of these powers of attorney.
Doubts about applicable law when a client goes to a notary to sign a preventive power of attorney: We must always resort to the criterion of the habitual residence (art. 9.6 Cc) to constitute the power of attorney under the CCCat or the Cc.
Always remember to include (or not), at the client's request, the clause on whether judicial authorization is required for the same acts for which it is required by the guardian.
In Catalonia, in the next few months, there will be relevant developments in this matter, since the draft bill to reform Book II of the Catalan Civil Code on this matter will soon enter the Parliament as a Bill, so that, if it is processed ordinarily, in a few months there will be a new regulation on this matter with very deep modifications that we will have to study in order to adapt the deeds.

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LAW 11/2023. DIGITALIZATION OF NOTARIAL AND REGISTRY ACTS (ELECTRONIC PROTOCOL, VIDEO SIGNATURES and ELECTRONIC AUTHORIZED COPIES):

Attached is an article from our BLOG summarizing the 10 main points of the entry into force of Law 11/2023 (HERE).

There are three main changes that will affect our daily lives:

The first is the deposit of all the signed documents in the electronic notary's office, being a faithful reflection of the paper document (matrix, united, diligences and notes).
The second major change is the possibility of video-signing certain types of documents with a digital certificate once the citizen is registered in the notarial portal;
and finally, the creation of electronic authorized copies that replace paper with the same effectiveness and validity.

After 21 days of implementation we have encountered the following casuistry:

REGARDING THE NOTARIAL PORTAL (PNC):

Citizens who wish to carry out procedures must fill in the form and validate their cell phone and contact email address. The procedure is simple and is completed by uploading the identity document to the platform. We have validated it and it works correctly for citizens identified with DNI, NIE and PASSPORT.
The most practical way to access and sign is to use a digital certificate. We recommend that of the Fábrica Nacional de Moneda y Timbre, although there are several issuing entities certified by Ancert.
The accessing citizen will be able to consult all his deeds history between January 1, 2007 and November 8, 2023. The deeds signed after the entry into force of the law are yet to be published.

AS FOR THE VIDEO SIGNATURE:

Since the beginning we have been able to successfully perform 2 video signatures . Although it is a very new technology and has its limitations, it has not been complex to perform once the client is registered in the portal and has the digital certificate to sign.
The connection is made with an application integrated in the web browser and is intuitive and simple. We expect that as citizens register, the number of documents granted by this method will increase.

REGARDING THE ELECTRONIC AUTHORIZED COPY:

We have already issued the first electronic authorized copies with secure verification code (CSV).
The process is managed from Word itself and in parallel to the deposit of the document, although it can be issued at a later date, always for documents signed after November 9, 2023.
The document is published in the notary's electronic office and the CSV is generated quickly and easily in SIGNO to be sent to the client.
Once uploaded to the electronic site, it is shared with the client by means of an e-mail in which we provide a link to its electronic authorized copy. This delivery method provides authenticity and legal validity before third parties. We believe that little by little it will replace the paper because for its consultation and validation it is not necessary to be registered in the notary portal of the citizen.

most frequent doubts about electronic protocol and video signature:

In SIC, within the section "Law 11/2023. Digitalization of notarial and registry actions" you can find a document with questions and answers about existing doubts in relation to the implementation of Law 11/2023, two publications have been issued: volume 1 and volume 2.

Also attached (HERE in singular and HERE plural), basic templates for any electronic deed granted by video signature through the Notarial Citizen Portal.

MODIFICATION OF THE SINGLE COMPUTERIZED INDEX. NEED TO REPORT SEPARATELY THE NUMBER OF PAGES ON PAPER / TELEMATIC SUPPORT:

As of November 9, 2023, the Single Computerized Index is modified to incorporate as a mandatory field to be reported in each public instrument the number of pages of the paper support matrix separately from the number of pages in the electronic support.

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For any questions regarding the new digitalization (both employees and customers), please contact Antonio Alba for resolution by e-mail: antonio@jesusbenavides.es

October 2023

1.- CENTRAL REGISTRY OF REAL PROPERTY. EXPLANATORY NOTE

Attached (HERE) clarifying note from OCP on several issues related to the Central Registry of Real Estate Titles and the obligations of the Notaries in this respect:

For the granting of the legal transaction, obtaining the e-mail address referred to in Article 4 of RD 609/2023 is not a requirement of validity, since it is not part of the identification requirements of the beneficial owner.
Percentage of ownership: this information should only be included when a new manifestation record has to be made in the event of a discrepancy between the content of the BDTR and the grantor's manifestation.

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PURCHASE AND SALE OF REAL ESTATE FORMALIZED BY A REPRESENTATIVE WITH REVOKED POWER OF ATTORNEY. BE VERY CAREFUL WHEN VERIFYING THE VALIDITY OF POWERS OF ATTORNEY AND CORPORATE POSITIONS.

Attached is the Resolution of the DGSJFP of July 26, 2023 (BOE of September 28, 2023).. The DG resolves a case of a CV of a real estate, in which the seller is represented by an attorney-in-fact, stating that his power of attorney is in force, and the Notary, giving his positive sufficiency judgment in the deed. However, from the data in the Mercantile Registry, it appears that this power of attorney was revoked a few days ago, the revocation having been published in the BORME, once registered in the Registry (from which moment it is enforceable against third parties), on the same day of the signing of the CV.

The DG confirms the qualification of the Registry, so that the buyer's right cannot be registered since the seller was not duly represented by a person with sufficient powers to formalize the sale.

To take into account the case and make the pertinent consultations at the Registry as close as possible to the signing of the deed (if possible, on the same day), in order to avoid such cases.

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3.- SL. CAPITAL REDUCTION DUE TO THE PURCHASE OF SHARES. AMOUNT OF THE RESTRICTED RESERVE

Attached is the Resolution of the DGSJFP of July 24, 2023 (BOE of September 27, 2023).. The DG resolves the typical case of "exit" of a partner of a SL. To do so, the company repurchases all the shares of that shareholder (for a redemption value higher than the nominal value) and then reduces the share capital by the same amount (thus proceeding to its amortization) and, also, endow a restricted reserve, for the amount of the reduction (taking as a reference the nominal value of the shares, and not the value reimbursed to the shareholder, which as indicated, is higher), to guarantee the rights of the creditors.

The Registry qualifies negatively because it considers that the amount of the reserve must be equal to "the value of what was received by the partner" (i.e., the total amount reimbursed, and not only the nominal value of the units).

The DG revokes the Commercial Registrar's qualification, determining that in these cases the amount of the restricted reserve must be equal to the nominal value of the redeemed shares, and not to the amount reimbursed to the outgoing shareholder.

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DE FACTO GUARDIANSHIP. INTERPRETATIVE DOCUMENT FOR BANKING PROCEDURES

It is reported that in SIC, within the link "Law 8/2021 in support of disability" a framework protocol signed between the State Attorney General's Office and the banking sector is made available to employees to clarify the powers of the de facto guardian in the field of banking transactions.

This document has also been the subject of a detailed analysis in an article in our blog (HERE you can read it).

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5.- FOREIGN INVESTMENTS. NEW REGULATIONS TO BE TAKEN INTO ACCOUNT

Staff is informed of the recent approval of Royal Decree 571/2023, of July 4, on foreign investments (HERE you can consult it), which must be taken into account when entering into transactions with non-residents. Specifically, it modifies the previous regulations in the following fundamental aspects:

1.- The following are considered foreign investments for the purposes of making the corresponding subsequent declaration to the Investment Registry of the Ministry of Economy:

Participation by non-residents in Spanish companies when such participation exceeds 10% of the capital stock or of the voting rights of the company (previously the participation was required to be 50%).
Acquisition of real estate in Spain by non-residents when the amount exceeds €500,000 (previously the minimum limit was €3,000,000).

In these cases the non-resident holder is obliged to declare the investment before the Investment Registry of the Ministry of Economy, using the forms resulting from Transitional Provision 3 of the Royal Decree (forms DP1, D1A D1B, DP2, D2A, D2B).

2.- If the transaction has been intervened by a Notary Public, he/she must communicate the investment to the General Council of Notaries through the notarial electronic office (SIGNO) and, in any case, must warn the person appearing of the obligation of presentation.

In the case that the investments considered foreign (in accordance with article 4 of the Royal Decree), have origin in a country of non-cooperative jurisdiction (former tax havens), which are those included in the Order of February 9, 2023, it will be necessary to make a prior declaration and the Notaries must demand it before the granting, and expressly warn of it in the public document.

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6.- PRACTICAL NOTES ON DOCUMENTS INVOLVING FOREIGNERS

Attached (HERE), an interesting article by a fellow Notary, where a series of practical reflections to be taken into account when a foreign individual is involved in a public document. By way of summary, the most relevant ones are highlighted:

Identification. The general rules of the Notarial Regulations apply. Specifically, in the case of EU foreigners, this is done either through their passport or their national identity card.
NIE: Foreigners who, due to their economic, professional or social interests, are related to Spain, must be provided, for identification purposes, with a personal, unique and exclusive sequential number. This number is necessary for all operations with tax implications.
Translation: Unless the notary knows the foreign language, the provisions of Article 150 of the Notarial Regulations must be complied with and an interpreter must be requested.
Means of payment: Be very careful and diligent with regard to money laundering prevention. It is highly advisable to demand that the deposit and payment accounts be in Spanish banks. If there are foreign banks or accounts of third parties, the most complete and reliable information possible about the origin of the funds will be required, requiring documentary justification (certificates of ownership of the accounts, contracts justifying the origin of the funds, etc.).
Apostille: It is essential to have an apostille for documents issued abroad.
Real estate transactions. Remember the withholding of 3% of the price (Non-Residents Income Tax) and the inversion of the taxpayer in the "municipal capital gain".

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7.- REQUEST FOR COPIES OF WILLS TO THE ARCHIVES OF THE NOTARIAL ASSOCIATION OF CATALONIA

Information of interest when requesting copies of wills from the College. In order to avoid problems in case of discrepancies in dates, the College requests that, when a copy request is submitted, the corresponding death and last will certificates be attached to the request for a copy of the will in order to more accurately identify the request.

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8.- TELEMATIC SIGNATURE OF NOTARIAL DOCUMENTS. ENTRY INTO FORCE

As previously reported, next November 9, Law 11/2023 will enter into force, which will allow the telematic signature of public documents (that is, through a videoconference system with the Notary and electronic signature, without the need for the client to physically go to the Notary's office). HERE you can find an article in the blog of Jesus Benavides' Notary's office with more details (which documents can be signed, procedure, etc.).

In order to be pioneers with this novelty and give the best service to the clients, a new section has been created in the web page of the Notary's office of Jesus Benavides (Video signature) where, by means of didactic videos, the whole process to be followed by any citizen who wants to put this possibility into practice is explained.

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For any questions in this regard (both from employees and customers), please contact Antonio Alba for resolution at his e-mail address: antonio@jesusbenavides.es.

September 2023

1.- COMPUTATION OF DEADLINES FOR HOLDING THE GENERAL MEETING. THE DAY ON WHICH THE MEETING IS HELD CANNOT BE INCLUDED IN THE COMPUTATION.

Attached is the Resolution of the DGSJFP of July 11, 2023 (BOE of July 28, 2023).. According to it, and by way of summary, the DG reminds us of the rules for calculating the deadlines for the call of a general meeting in a capital company. As is well known, article 176 LSC determines that one month (SA) or 15 days (SL) must elapse between the call and the holding of the general meeting. For the computation of these periods, the starting day begins on the day on which the notice is sent to the last of the shareholders and, in order to determine the day on which the period ends, the day on which the general meeting is held cannot be computed.

Therefore, one month must elapse for corporations and 15 days for limited liability companies, and it is the day after these deadlines when the General Meeting can be validly held.

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2.- DOCTRINE OF THE GENERAL DIRECTORATE ON TARIFF MATTERS

Attached (HERE) an interesting document containing a summary of the doctrine of the General Directorate of Legal Security and Public Faith, in tariff matters, for the years 2020 - 2023. To consult in case of doubts on how to minute specific deeds.

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3.- NEW DEVELOPMENTS IN THE SINGLE COMPUTERIZED INDEX

It is reported that, recently, the Single Computerized Index has included a series of new features to improve the reflection of the legal transactions that are granted in public instruments.

Specifically, new legal acts are created to duly collect:

Acts of acquisition or preservation of civilian citizenship.
Deeds of support measures and assistance constitution deeds (and their equivalent in Catalonia),
Minutes of omission of protocol or Registry Book number (to solve the unfortunate case that one or more numbers remain without a document actually authorized or intervened).

Other minor modifications:

Proof of the means of payment in the deposit records.
Specification of the ownership (or not) in the sale and purchase of shares and stocks.
Incorporation of entities with or without legal personality, where the information of their Tax Identification Number is required (if the information is obtained after the granting and it has not been possible to obtain it from the client, when the deadline for submitting the index has expired, the lifting of the rule must be requested through the usual channel).

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4.- THEORY OF THE COMPLEX LEGAL BUSINESS. PURCHASE + MORTGAGE OF REAL ESTATE BY MARRIED PERSON. THE CONSENT OF THE OTHER SPOUSE IS NOT NECESSARY IF THE MORTGAGE IS MADE SIMULTANEOUSLY WITH THE PURCHASE. CARE IN CASE OF FOREIGNERS

Attached (HERE) an interesting article summarizing the doctrine of the DG on the theory of the complex legal business. It deals with cases where a married person buys a property alone, and then mortgages it. As it is known, the general rule determines that, in order to mortgage the habitual residence, even if it belongs to only one of the spouses, the consent of the other spouse is necessary. As an exception to this general rule, the theory of the complex legal business arises, by virtue of which, the consent of the non-owner spouse is not necessary in the constitution of mortgage on the habitual residence immediately after its purchase, that is to say that the mortgage is signed with the number immediately after the protocol number of the purchase-sale.

In the case of foreigners, BE CAREFUL, since the DG does not admit the doctrine of the complex legal business, unless that foreign law allows it and it is so accredited (therefore, it must be verified by means of a report of the notary if the foreign law that governs the specific matrimonial regime of the clients admits or not this theory of the complex business).

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5.- PUBLIC NOTARIZATION OF CORPORATE RESOLUTIONS. A GOOD DEED CAN SAVE A BAD CERTIFICATE

Attached is the Resolution of the DGSJFP of July 10, 2023 (BOE of July 28, 2023).. According to it, and by way of summary, the DG determines that, in the context of an elevation to public of corporate resolutions of an SL (cessation and appointment of positions), if the certificate does not indicate the quorum for adoption of the resolutions, but in the deed it is specified (through a statement of the administrator), this is sufficient to register the agreement in the Commercial Registry.

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6.- PRIOR IN TEMPORE, POTIOR IN IURE. WHAT ARRIVES FIRST AT THE REGISTRY, IS WHAT PREVAILS (EVEN IF THE LAW IS LATER).

Attached is the Resolution of the DG of Law, Legal Entities and Mediation of July 17, 2023 (DOGC of July 31, 2023).. According to it, and by way of summary, the DG determines that what accesses first to the Registry, is what prevails.

A case in which, in 1986, by means of a private document, a life usufruct on a property is constituted. Subsequently, on 02/09/2023, this private document is elevated to public deed and is presented for registration in the Land Registry. However, the Registrar refuses the registration, since on 02/03/2023, that is, 6 days before, a deed of bequest was presented for registration, in which this right of usufruct is awarded to a third party, on the basis of an acceptance of inheritance of a person deceased in 2022.

In this case, the DG recalls the basic principle of operation of the Registry, i.e., prior in tempore, potior in iure, so that what arrives first at the Registry and is registered (usufruct of 2022 presented on February 3, 2023), prevails over the other rights (in this case, a usufruct constituted in private document in 1986 and presented for registration on February 9, 2023 on the basis of a deed of elevation to public deed).

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7.- TABLE OF REGULATIONS ON NATIONALITY AND MARITAL STATUS

Attached (HERE) an interesting document that includes a table of regulations on nationality and civil status, where we can find links to regulations and Resolutions of the General Directorate on various matters such as Civil Registry, certifications, economic regime of marriage, etc.

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8.- NATIONALITY OATH. VARIOUS ISSUES TO BE TAKEN INTO ACCOUNT

Attached (HERE) Circular of the DG regarding the competence of the specific Civil Registry where to formalize the declaration of option of the Spanish nationality, as well as the oath or promise. In the same one it is established that the competence will correspond to the Civil Registry Office of the applicant's domicile.

Also attached (HERE) Circular of the General Director of Legal Security and Public Faith, which determines the inappropriateness of granting certificates of oath of nationality when indications are detected that the applicant has performed acts incompatible with good civic conduct (such as, for example, the fact that the applicant is incarcerated in a penitentiary center).

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9.- JUDICIAL CHALLENGE OF NEGATIVE QUALIFICATIONS. SERVICE TO WHICH WE CAN RESORT AS A NOTARY'S OFFICE.

Attached (HERE) an informative document of the General Council of Notaries, through which, a service available to Notaries, to be able to appeal judicially those negative ratings (or also Resolutions of the DGSJFP) that may involve a corporate interest for Notaries.

Thus, in the event that the employee encounters a negative rating that he/she considers may affect the Notary's office as a whole, he/she may raise this possibility with the Notary, which may be requested through the channels indicated in the attached document.

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10.- THE ADVISABLE ACT OF MANIFESTATIONS PRIOR TO THE GRANTING OF A DEED IN WHICH A PERSON WITH DISABILITY INTERVENES.

The informative circular 3/2021, of September 27th of the Permanent Commission of the General Council of Notariesproposes that prior to the execution of a deed in which persons with disabilities are involved, a record of manifestations should be drawn up in which the circumstances that may influence the execution of the legal transaction in question should be recorded. The aforementioned record may include, among other circumstances:

Statements by the person with a disability himself/herself, for example, the statement of that person recognizing that he/she is selling for a price below market price for a specific need or convenience, or the reasons for which he/she renounces a specific inheritance.
Statements of persons assisting the disabled person in the exercise of his or her capacity. For example, the declaration of the de facto guardian, lawyer, incidental companion, etc., stating that he/she has recommended the disabled person to grant a deed of sale because it is necessary for his/her future support and maintenance, or to settle outstanding debts.

This act is an essential complement to the notarial capacity judgment, and provides clarity and security for future disputes and possible claims. It is recommended that the person requesting the record be the person with a disability or his or her assistant.

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11.- THE CENTRAL REGISTRY OF REAL TITLE IS CREATED.

Royal Decree 609/2023, of July 11, 2023, creating the Central Registry of Real Estate Titles. Royal Decree 609/2023, of July 11, 2023, which creates the Central Registry of Real Estate Titles.. This registry must be consulted by all parties obliged by law to control money laundering, including notaries. However, until the data is uploaded to this registry, for which 9 months are given, the Royal Decree establishes that the traditional sources must continue to be used (Database of the Beneficial Ownership through Signo).

July 2023

1.- NEW PAID LEAVE OF 15 CALENDAR DAYS FOR DOMESTIC PARTNERS

Royal Decree-Law 5/2023 is published in the BOE and enters into force (HERE you can consult it), by virtue of which, a paid leave of 15 calendar days is recognized for the fact of constituting (and registering) as a stable couple. All stable couples that are constituted from now on can be informed about it, so that they can enjoy this new leave.

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2.- NEW REGULATION OF STRUCTURAL MODIFICATIONS OF COMMERCIAL COMPANIES

The aforementioned Royal Decree-Law 5/2023 (HERE you can consult it) has repealed the former Law 3/2009, of April 3, 2009, on structural modifications of commercial companies (transformation, merger, spin-off, global assignment of assets and liabilities, etc.). Thus, from now on, the new legal regime for structural modifications can be found in the aforementioned Royal Decree-Law 5/2023. To be taken into account when any officer prepares one of these operations (he/she should consult the new regulation and adapt the legal quotations to the new regulatory text).

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3.- FOREIGNERS' DIVORCE DECREES, WITH ADJUDICATION OF REAL ESTATE, MUST BE REGISTERED IN THE CENTRAL CIVIL REGISTRY.

Attached is the Resolution of the DGSJFP of June 13, 2023 (BOE of July 10, 2023).. According to it, and by way of summary, the DG determines that, in case of divorce (OF FOREIGNERS whose marriage is not registered in the Spanish Civil Registry), if in the sentence a property is awarded to one of the ex-spouses, in order to register it in the Property Registry, it is necessary that, previously, this divorce sentence is registered in the Central Civil Registry.

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4.- REGISTRATION OF PROPERTY AND PRIOR IN TEMPORE. SOMETIMES YES, SOMETIMES NO, WHAT IS FILED LATER HAS PRIORITY OVER DOCUMENTS FILED EARLIER.

Attached is the Resolution of the DGSJFP of June 15, 2023 (BOE of July 10, 2023).. According to it, and as a summary, the DG solves a curious case:

CV + PH is signed and submitted for registration, qualified with remediable defects.
A correction is presented, and being the entry in force (that is to say, not yet registered the VC + PH), an order of the AEAT enters in the Property Registry with a prohibition to dispose, due to tax debts.
The Registrar negatively qualifies the CV + PH (filed before the writ) on the grounds of public order.
The Notary appealed and the DG agreed with him, determining that if this order comes from an administrative procedure where the civil validity of the legal transaction is not questioned (remember, tax debts), the negative qualification does not proceed, since the CV + PH have been presented before in the Registry (prior in tempore potior in iure).
However, the DG reminds us that if the injunction had been issued in the context of criminal proceedings where the validity of the business is questioned (for example, an alleged fraud in the VC), the suspension of the registration would be appropriate (even if the injunction was subsequent), for reasons of general interest / public order.

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5.- NOTHING CAN BE REGISTERED IN FAVOR OF A COMPANY WITH A REVOKED CIF.

Attached is the Resolution of the DGSJFP of June 16, 2023 (BOE of July 10, 2023).. According to it, and by way of summary, the DG determines that, in the context of a sale and purchase, if the acquiring company has the CIF revoked, the acquisition cannot be registered in its favor. It is important to take into account and always remember, when a company is involved, to consult the existing database on the subject.

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6.- IT IS POSSIBLE TO REDUCE CAPITAL STOCK BELOW 3,000 EUROS IN AN EXISTING COMPANY

Attached is the Resolution of the DGSJFP of June 13, 2023 (BOE of July 10, 2023).. According to it, and by way of summary, the DG solves the following curious case:

3,000, executes a capital reduction, as a result of which, its resulting capital stock figure falls below 3,000 euros.
The Registrar suspends the registration as he considers that this figure is below the legal minimum, as he considers that SLs of less than 3,000 euros of capital are only possible at the time of incorporation.
The DG revokes the qualification of the Registrar, considering that it is possible to execute a capital reduction in an SL whose result is a share capital of less than 3,000 euros.

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CAPITAL STOCK INCREASE AND PREEMPTIVE SUBSCRIPTION RIGHTS. TIME MUST BE RESPECTED

As a result of a transaction formalized at the Notary's office, it is recalled that in the context of a capital increase of a corporation, the shareholders' pre-emptive right to capital increases arises from the moment of publication of the offer for subscription of the new shares in the Official Gazette of the Commercial Registry, or from the written communication to each of the shareholders. Such subscription may be made by the shareholders within the period established by the Shareholders' Meeting, which may not be less than one month from the publication or communication.

Therefore, these deadlines must be taken into account and respected when formalizing this type of transaction (so that it is not possible for the subscription of the new shares to be carried out at the same Meeting of the resolution, unless all the shareholders have attended the meeting).

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8.- CIVIL LIABILITY OF THE NOTARY. VERY IMPORTANT TO TAKE INTO ACCOUNT IN ORDER TO AVOID THIS KIND OF MISTAKES.

Attached is a link to an interesting doctrinal article (HERE) in which the civil liability of the Notary Public is analyzed. Of special interest, there is a section with details of specific cases (for example, omission of charges, insufficient powers of attorney, lack of information regarding the tax effects of the granting, etc.).

It is strongly recommended that all employees of the Notary's Office read the article and these specific cases to avoid making these types of errors and the liability associated with them.

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9.- CIVIL REGISTRATION AND OATH OF NATIONALITY AND NOTARIZED MARRIAGES. IMPORTANT ISSUES TO BE TAKEN INTO ACCOUNT

Attached is a document from the General Directorate of Legal Security and Public Faith (see PDF attached to this email) which clarifies several issues related, above all, to the documentation to be submitted by the interested parties in the acts of nationality oath and in the marriage proceedings before a Notary Public, as well as aspects related to the procedure to be taken into account in both grants of nationality and marriage.

June 2023

1.- ARTICLES OF ASSOCIATION. NOTICE OF MEETING. THE CLAUSE IN THE BYLAWS THAT ALLOWS THE NOTICE OF THE MEETING TO BE SENT TO THE SHAREHOLDERS BY ORDINARY MAIL (WITHOUT ACKNOWLEDGEMENT OF RECEIPT) IS NOT VALID:

Attached is the Resolution of the DGSJFP of May 10, 2023 (BOE of June 1, 2023).. According to them, and by way of summary, the DG reminds us that (in the framework of the incorporation of an SL), the statutory clause that allows the meeting notice to be sent to the shareholders by ordinary mail (without acknowledgement of receipt) is not admissible, since for the notice to be valid, it is necessary that the system of transmission allows verification of the receipt of the notice by the addressee.

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2.- IN THE DEED OF EXTRAJUDICIAL SALE OF MORTGAGED PROPERTY IT IS NECESSARY THE RELIABLE NOTIFICATION OF THE EXECUTION TO THE HOLDERS OF SUBSEQUENT CHARGES:

Attached is the Resolution of the DGSJFP, dated May 11, 2023 (BOE of June 1, 2023). Case of extrajudicial foreclosure of mortgaged property, in a notary's office, where there is a resolutory condition subsequent to the mortgage in favor of a company. The company is notified of the foreclosure proceedings by registered mail with acknowledgement of receipt, but the delivery is negative, after which the deed is granted. The DG, aligning itself with the thesis of the Registrar, does not accept this, since it considers that when the extrajudicial foreclosure of a mortgaged property is formalized by means of a deed, it is necessary to notify reliably the procedure to all the holders of charges or rights subsequent to the mortgage being foreclosed, so that if it is decided to send the notification of the procedure by registered mail with acknowledgement of receipt, and its delivery to the addressee is negative, it is appropriate to make a personal notification, by the Notary, by means of a deed of notification (art. 202 Notarial Regulations).

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3.- RECTIFICATION OF MORE THAN 10% OF THE LAND AREA. IT IS NOT POSSIBLE TO REGISTER IT "LITTLE BY LITTLE":

Attached is the Resolution of the DGSJFP, dated May 12, 2023 (BOE of June 1, 2023). A deed is granted for the rectification of the size of the property, by the "simplified way" of article 201.3 of the Mortgage Law(for differences that do not exceed 10%), but when analyzing the square meters stated in the registry and the meters declared now (from 9,403 to 10,377), it is appreciated that the difference is higher than 10%. The Registrar suspends registration and subsequently, the Notary presents a deed of correction where it is requested to register only the excess of capacity up to 10%. The Registrar qualifies again negatively, and the DG, aligning with the Registrar, confirms that this is not possible, since it is not possible to register "little by little" or "by parts" a rectification of capacity, so that if the same is higher than 10%, the ordinary procedure of article 201.1 of the Mortgage Law must be used, and not the simplified procedure of article 201.3.

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4.- MINUTATION OF "MINOR CONCEPTS". WHAT CAN BE CHARGED AND WHAT CANNOT:

Interesting entry from the blog "justitonotario" (HERE) which analyzes a Resolution of the Directorate General of January 3, 2023 (the full text can be consulted in a link of the aforementioned blog), which resolves an appeal by a private individual against the minutes of a Notary of a deed of sale. By way of summary, it determines that:

What is witnessed and what is not? It is the Notary who decides.
Mercantile Registry Report: Not applicable.
Actual Holder Consultation: Yes.
Blank sides of checks: correct.
Incorporation to the copy of a folio for the consignment of notes: correct.
Diligences: Must be on record in order to be minutable.
Simple copies and agreement of assumption of expenses by the buyer: If the buyer assumes the expenses, this includes the copies necessary to comply with the obligations of communication of the formalized business.
Number of simple electronic copies: 2 (for communications to Cadastre and City Hall, respectively).
Number of simple paper copies: 3 (to liquidate ITP, "plusvalía" and various formalities, respectively).
At the moment of indicating the number of copies desired by the grantors: At the time of signing.
What can we consider as testimonies? The transcription of the data of the intervening company; the elaboration of the necessary card to be able to carry out the telematic liquidation; the testimony by request of registry information; the consultation of Real Titularity; the simple note of the Registry; the receipt of the IBI; the descriptive and graphic cadastral certification (to the margin of the extra-land registry management also minutable); the checks that accredit the means of payment; the certificate of debts of the community; the label of the Energetic Certification or the whole certificate and respecting what is needed according to the cases; the proof of reception of the Town hall of the communication of the article 110.6.b) and the verification of CSV`s.
Security seal: Yes, it is minuted.
Note from the Registry: It can be a supplement (in the margin of the testimony).

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5.- IT IS NOT POSSIBLE TO BE 2 THINGS AT THE SAME TIME. IT IS NOT POSSIBLE TO BE A MEMBER (NATURAL PERSON) OF THE BOARD OF DIRECTORS OF A COMPANY AND, AT THE SAME TIME, ALSO BE A NATURAL PERSON REPRESENTING A COMPANY THAT HOLDS THE POSITION OF MEMBER OF THE SAME BOARD OF DIRECTORS:

Attached is the Resolution of the DGSJFP of May 23, 2023 (BOE of June 16, 2023).. According to them, and by way of summary, the DG determines that, in a 3-member board of directors, it is not possible for the same natural person to hold the position of member of the board and, at the same time, the position of natural person representing a company that is also a member of said board, since this would imply that, de facto, a single person would have the right of veto for the adoption, or not, of any agreement, in addition to being able to generate situations susceptible to conflict of interest. In any case, if the board had more than 3 members, the issue would be more debatable and the specific case would have to be analyzed in order to reach a conclusion in this respect.

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6.- SALE OF REAL ESTATE BY A COMPANY REPRESENTED BY AN ADMINISTRATOR WITH HIS POSITION NOT REGISTERED IN THE MERCANTILE REGISTRY. IT IS POSSIBLE IF THE NOTARIAL JUDGMENT OF SUFFICIENCY IS WELL DONE:

Attached is the Resolution of the DGSJFP of May 9, 2023 (BOE of May 29, 2023).. According to them, and by way of summary, the DG reiterates its already consolidated doctrine and determines that, in a case of an SL selling a property, represented in the sale by its administrator, without the position still registered, it is possible to formalize the operation if the notarial judgment of sufficiency is made in the correct way . In particular, the deed should contain all the circumstances foreseen by the law in order to understand the appointment of the administrator as valid:

The resolution of the duly called General Meeting.
Acceptance of appointment,
The notification or consent, as the case may be, of the holders of the previous registered offices.

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AMENDMENT OF THE COMMERCIAL REGISTRY REGULATIONS IN ORDER TO ADAPT THEM TO THE EUROPEAN UNION REGULATIONS ON DIGITAL PROCESSES.

HERE you can consult the aforementioned reform of the Mercantile Registry Regulations, published in the Official State Gazette of June 14. Based on the same, as key aspects:

The assignment of a Unique European Identifier (EUID) to all capital companies and branches is foreseen, allowing them to be unequivocally identified through a system of interconnection of all EU commercial registries.
The possibility of creating and closing branches telematically/online is foreseen.
Its entry into force is delayed by one year, counting from the publication in the Official State Gazette of Law 11/2023 (i.e., May 9, 2024).

May 2023

1.- WAIVER OF INHERITANCE OF MINORS AND CONFLICT OF INTEREST. ASPECTS TO TAKE INTO ACCOUNT:

Attached is the Resolution of the DG of Law, Legal Entities and Mediation of the Generalitat de Catalunya, dated February 20, 2023 (DOGC of March 2, 2023). According to it, and by way of summary, the DG reminds us that in the renunciation of an inheritance in favor of minors, the general rule is that it must be formalized in a public deed by the parents, with judicial authorization (art. 236-27 CCCat) or, alternatively, by the two closest relatives (art. 236-30 CCCat). In case of conflict of interest of one of the parents, the renunciation is made by the other parent with the consent of the two relatives. If the conflict of interest affects one of the two relatives, he/she must abstain or, if necessary, the successive relative must be called upon to substitute him/her.

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2.- LAND REGISTRY. IT IS NOT POSSIBLE TO REQUEST SIMPLE NOTES NEITHER BY EMAIL NOR BY MEANS OF A DOCUMENT PRESENTED BY TELEMATIC WAY:

Attached are the Resolutions of the DGSJFP of March 27, 2023 (BOE of April 18, 2023) and of March 28, 2023 (BOE of April 18, 2023). According to them, and by way of summary, the DG reminds us that simple notes cannot be requested either by email or by means of a request submitted in a document through the Registry's telematic document filing system. The ordinary way is through the telematic portal of Registradores.org or via Telefax in the case of continuous notes from the Notary's office.

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3.- ASSIGNMENT OF PROPERTY IN EXCHANGE FOR A LIFE ANNUITY SECURED BY A CONDITION PRECEDENT AND A REAL RIGHT OF MORTGAGE. YOU CANNOT MORTGAGE WHAT DOES NOT YET BELONG TO YOU:

Attached is the Resolution of the DGSJFP of March 28, 2023 (BOE of April 18, 2023). According to it, and by way of summary, the DG reminds us that you cannot mortgage what is not yet yours. An assignment of a property in exchange for an annuity is formalized in a public deed. Assignor (elderly person), assigns the property to a third party (assignee), in exchange for an annuity. The assignment is formalized with a suspensive condition, so that the transfer of ownership will take place when the assignee party proves that it has paid the agreed pension in full (it is understood that upon the death of the assignor). Likewise (to guarantee that those obliged to pay the pension will pay it), the assignee constitutes a mortgage on said property, in favor of the assignor, as an additional guarantee for the payment of the life annuity. The registration of the mortgage is denied since the condition precedent has not yet been fulfilled, so that the assignees have not yet acquired title to the real estate (condition precedent pending fulfillment) and, therefore, cannot mortgage something that does not yet belong to them.

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4.- MORTGAGE AND DOMICILE FOR NOTIFICATION PURPOSES. IT CANNOT BE A FOREIGN DOMICILE:

Attached is the Resolution of the DGSJFP of March 30, 2023 (BOE of April 18, 2023). According to it, and by way of summary, the DG reminds us that when formalizing a real right of mortgage, the deed must contain an address of the debtor for the purpose of notifications and requirements, which must be located in Spain, so that it is not admissible to indicate an address of the debtor abroad, for these purposes.

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5.- DEED OF EXTINCTION OF STABLE COUPLE AND DISSOLUTION OF CONDOMINIUM (APARTMENT IN COMMON). IT CAN BE GRANTED WITH MINOR CHILDREN IF COVENANTS THAT AFFECT THE CHILDREN ARE NOT INCLUDED IN THE DEED:

I attach the Resolution of the DG of Law, Legal Entities and Mediation of the Generalitat de Catalunya, dated April 19, 2023 (DOGC of April 24, 2023). According to it, and by way of summary, the DG determines that when there is a stable couple with children and with a house in common, when the stable couple is extinguished by cessation of the cohabitation, although there are those minor children, they can formalize the extinction of the stable couple in the deed and agree in the same one the dissolution of the condominium of the property that they had in common. However, this will only be possible if the deed of termination of the stable partnership does not include measures that affect the children, such as an agreement, a parentality plan, an alimony, or a visitation regime (in which case, logically, it would require judicial authorization).

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6.- DEED OF MATERIAL DIVISION OF A PRIVATE ELEMENT OF A PROPERTY SUBJECT TO THE HORIZONTAL PROPERTY REGIME ONLY A SIMPLE MAJORITY IS REQUIRED:

I attach the Resolution of the DG de Dret, Entitats Jurídiques i Mediació de la Generalitat de Catalunya, dated May 5, 2023 (DOGC of May 15, 2023). According to it, and by way of summary, the DG determines that in the case of an old building with a "singular" horizontal division (divided into 4 entities, one of which includes 13 apartments susceptible of individualized use), if the bylaws do not expressly allow it, then the building's bylaws must be modified, if the bylaws do not expressly allow it (in which case no agreement of the Meeting would be required) it is possible to formalize a material division of this entity that includes those 13 floors, in order to create 13 independent registry properties, being only necessary a resolution of the Meeting approved by simple majority (that is, it would not be necessary an agreement with qualified majorities of 4/5).

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7.- DEED OF RECTIFICATION OF ERROR (OF SURFACE) IN THE DESCRIPTION OF A PROPERTY (PRIVATE ELEMENT) SUBJECT TO HORIZONTAL PROPERTY REGIME. IT IS NOT REQUIRED DECLARATION OF NEW OLD WORK BY THE COMMUNITY OF PROPRIETORS:

Attached is the Resolution of the DGSJFP, dated April 18, 2023 (BOE of May 8, 2023). According to it, and by way of summary, the DG resolves a case in which an overground floor, registered with a useful surface of 47.51 meters, is rectified to 97 meters (since in fact that was the real and correct surface), by means of a deed granted by the registered owner of that property, based on a cadastral and graphic certification and an architect's report (that accredit that it is an error and that that floor has that surface from the moment of the construction), as well as by means of an agreement of Meeting (adopted by unanimity) that consents to this rectification. In this case, the DG confirms that this deed is sufficient to register the modification of the surface of the apartment, without the need of a deed of declaration of old new construction, by the community of owners, where the description of such element is rectified.

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8.- WHEN IN A SUCCESSION THERE IS A RIGHT OF TRANSMISSION, EYE THAT THE CONCURRENCE OF ALL THE INTERESTED PARTIES IN THE INHERITANCE IS REQUIRED FOR THE DELIVERY OF A LEGACY:

Attached is the Resolution of the DGSJFP of April 19, 2023 (BOE of May 8, 2023). According to it, and by way of summary, the DG reminds that, within the framework of the right of transfer, and based on article 1006 of the Civil Code, any operation tending to divide the inheritance to which the transferor is called must be granted by all the interested parties in the succession of the latter (including their legitimated beneficiaries). This is a case in which two deceased persons, in their will, name as heirs their six children (with vulgar substitution in favor of their respective descendants) and, also, order in favor of three of their children legacies of some real estate. Subsequently, one of these children dies, leaving a widow and three children (grandchildren of the first deceased). A deed of delivery of the bequest is granted by the heirs instituted (children of the deceased couple) and also by the transmitting heirs (grandchildren), but the widowed spouse of the deceased son does not intervene, something that the DG interprets that it is indeed necessary, since she is interested in the succession.

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9.- IT WILL SOON BE POSSIBLE TO GRANT DEEDS TELEMATICALLY:

Attached is a link to the article recently published in El Periódico (HERE) where the novelties derived from Law 11/2023 are succinctly explained. Based on the same, in short (at the end of November expires the vacatio legis of 6 months), it will be possible to grant certain public documents telematically, that is to say, without the physical presence of the client in the Notary's office. As more news on the practical implementation of the measure becomes available, the staff will be duly informed.

April 2023

1.- CLIENTS CAN IDENTIFY THEMSELVES BEFORE A NOTARY BY MEANS OF THE VALID DRIVING LICENSE OF THE KINGDOM OF SPAIN:

Attached is the Resolution of the DGSJFP of January 16, 2023 (BOE of February 14, 2023). According to this Resolution, and by way of summary, the DG allows an appearing party to identify himself before a Notary Public by means of a valid Spanish driving license, although this resource must be used in a subsidiary or supplementary manner. This means that, ordinarily, in any case, the identification of Spaniards must be made by means of Passport or DNI. However, in a subsidiary manner, the driving license may also be accepted, since it is an official document issued by a public authority, with photograph and signature, which has identification effects.

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2.- THE CONSENT OF THE NEW OWNERS OF A PROPERTY SUBJECT TO A HORIZONTAL PROPERTY REGIME IS NECESSARY IN ORDER TO RECORD IN THE PROPERTY REGISTRY AGREEMENTS ADOPTED PRIOR TO THE PURCHASE OF THE PROPERTY THAT HAVE NOT BEEN REGISTERED.

Attached is the Resolution of the DGSJFP of January 31, 2023 (BOE of February 20, 2023).. According to it, and by way of summary, the DG recalls that, as a general rule, if a community of owners adopts an agreement subject to registration in the Land Registry, and subsequently, before such agreement is registered, there are changes of ownership in private elements, in order to achieve the registration of such agreement, the new owners must give their consent. However, in this specific case, being an inheritance, the DG applies the principle of universal succession (article 661 Cc) and allows the registration of the agreement.

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3.- IN THE CONTEXT OF AN INHERITANCE, THE SEPARATION OF A MARRIAGE MUST BE RELIABLY PROVEN IN ORDER TO DEPRIVE THE SURVIVING SPOUSE OF HIS OR HER INHERITANCE RIGHTS TO THE RESERVED PORTION OF THE ESTATE.

I attach the Resolution of the DGSJFP of January 24, 2023 (BOE of February 14, 2023). According to it, and by way of summary, the DG reminds us that, in the context of an acceptance of inheritance, in order to formalize the same without the surviving legitimate spouse (as a result of the spouses being separated), it is necessary to prove the separation (by mutual agreement in public deed / judicial resolution of separation or divorce / by ratification of the spouse who does not participate in the partition).

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4.- PRECAUTIONS TO BE TAKEN INTO ACCOUNT IN THE ADEQUACY TRIAL WHEN A PREVENTIVE POWER OF ATTORNEY IS USED IN ANTICIPATION OF LOSS OF CAPACITY.

Attached is the Resolution of the DGSJFP of November 4, 2022 (BOE of December 2, 2022). According to it, and by way of summary, the DG determines that in order to be able to use a preventive power of attorney in anticipation of loss of capacity (of the type that only takes effect once the loss of capacity is accredited, not before) a generic sufficiency judgment is not enough as in any kind of power of attorney, but additional requirements will be demanded, namely: a current medical certificate will be required, with indication of date, author, object and an express judgment of the Notary that the principal is in the support situation described for the power of attorney to take effect (and even, in case of doubt, an expert report may be required, which will be assessed in a separate notarial act or, where appropriate, adding the appearance of the principal to assess in situ his situation of need).

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5.- JUDICIAL DECISIONS AFFECTING THE CAPACITY OF THE PERSON MUST BE REGISTERED IN THE CIVIL REGISTRY SO THAT THE ACTS DERIVED THEREFROM HAVE ACCESS TO THE PROPERTY REGISTRY.

Attached is the Resolution of the DGSJFP of January 3, 2023 (BOE of February 9, 2023). According to it, and by way of summary, the DG reminds us that the court decision affecting the capacity of a person, in addition to being final, must be registered in the Civil Registry. Without this requirement, the act carried out by the representative will not be able to access the Property Registry.

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6.- WHEN THE ECONOMIC REGIME OF THE MARRIAGE IS INDICATED IN A DEED, IT MUST BE DETAILED WHETHER IT IS LEGAL OR CONVENTIONAL.

I attach the Resolution of the DGSJFP of December 20, 2022 (BOE of February 3, 2023). According to it, and by way of summary, the DG reminds us that when indicating the economic regime of the marriage, it is necessary to determine in the deed if such economic-marital regime is legal or agreed (since in case of being agreed, specific rules of management and disposition may have been foreseen, different from the generic ones foreseen in the legal regime of the Code). In addition, if it is an agreed or conventional regime, it must be accredited to the notary by means of the exhibition of the authentic document from which the conventional economic regime results (marriage contracts) with the data of inscription in the competent Civil Registry. It can also be accredited with the certification of marriage of the Civil Registry in whose margin must be noted the granting of the marriage contracts in which the referred conventional matrimonial property regime is agreed, the day of the granting, the authorizing notary and the number of protocol.

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7.- NEED FOR THE NOTARY TO EXPRESSLY STATE IN THE NOTARIAL SUFFICIENCY JUDGMENT THE CAVEAT OF SELF-CONTRACTING AND/OR CONFLICT OF INTEREST.

Attached resolution of the DGSJFP of March 9, 2023 (B.O.E. March 27, 2023). In this interesting resolution the DG reiterates once again its doctrine regarding the notarial sufficiency and self-contracting trial, in the sense that precautions must be taken when in the presence of a legal business granted by an attorney-in-fact who in turn intervenes in his own name and right as a party with interests opposed to those of his attorney-in-fact. In the case presented to us in the resolution, the Registrar suspends the registration of a donation in which the donor acts in turn as attorney-in-fact of the donee, without expressly stating in the deed of donation that the power of attorney granted by the donee expressly avoids the figure of self-contracting and/or conflict of interests. The administrative center recalls its already very reiterated doctrine that article 98 of Law 24/2001 exclusively attributes the judgment of sufficiency of the alleged representation to the notary, without the registrar being able to require for his qualification that the document from which the representation is derived be exhibited, accompanied or transcribed. However, when the figure of self-contracting is involved, it is not enough for the notary to state in the deed the notary's judgment of sufficiency, but it will also be necessary for him to clearly state that the authentic document from which the representation (power of attorney) results contemplates the caveat of self-contracting".

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8.- APPLICABLE LAW IN MATTERS OF MATRIMONIAL PROPERTY REGIMES WITH INTERNATIONAL ELEMENTS

8.1.- LAW APPLICABLE TO THE MATRIMONIAL PROPERTY REGIME:

EU Regulation 2016/1103 (HERE) applies, applicable to all marriages entered into as of June 2019, which is universally applicable (it allows to apply even non-EU country laws).
The Regulation (art. 22) allows the spouses to choose the law applicable to their matrimonial property regime between that of the place of celebration or that of the nationality of either spouse.
Validity of the agreement: Subject to the formal requirements of each country (consequently, in Spain, a public deed will be required).
‍In theabsence of an agreement, the applicable law shall be (art. 26): That of the first habitual residence after marriage, that of the common nationality or that of the closest bond.
‍Alsoapplicable to "registered partnerships": stable couples registered in a public registry.

8.2.- LAW APPLICABLE TO THE DIVORCE:

EU Regulation 1259/2010 (HERE) on applicable divorce law is applicable, which is also universally applicable (even non-EU laws can be applied).
The Regulation (art. 5) allows the spouses to choose the law applicable to divorce between the law of the place of habitual residence, the law of the last place of habitual residence, the law of the State of which one of the spouses is a national at the time of conclusion of the agreement or the law of the forum.
Validity of the agreement: Subject to the formal requirements of each country (in Spain, public deed of covenants in anticipation of rupture).
‍Inthe absence of an agreement, the criteria of Article 8 of the Regulations shall apply.

Jesus Benavides Lima

Notary of Barcelona

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