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News - June 2008

The Catastro and its importance to anyone who owns a property in Spain.

There is no doubt that the Catastro is important to all of us who own a property in Spain however, it is also a fairly boring subject which means that we may all switch off before we really understand the relevance of it to us.

Well for those of you with the stomach for it, here goes…

The Registro de la Propiedad and the escritura

The Catastro is a secondary system set up within Spain to deal with the ownership, description and boundaries of all property in the country.

The other system which many people have heard of is the Registro de la Propiedad which concentrates on the legal ownership of a property and whether there are any charges on the property (be that a neighbour dispute, a mortgage or a right of way).

So the main difference between the English Land Registry system is pretty obvious immediately – there are two separate arms in Spain (which are not linked to any helpful level) so the information on one hand may be correct but the other isn’t.

So, what are the main differences between the two systems? Well, the main one has already been answered because the Registro de la Propiedad confirms the legal ownership of a property as well as (with the production of a Nota Simple) confirming the charges etc.

Many buyers in the past have considered the escritura (title deeds) as the most important document to check before buying a property (and this is certainly one of the documents to see before committing to a purchase) but what the Registro de la Propiedad will tell you is what is known publicly about the property – it is fair to say that if a property is not registered at the Registro then there ought to be a lot of caution shown before committing to buy it.

Indeed, a Notary will not proceed with a sale of any property unless they have checked the registration of that property at the Property Register.

Ok, you have seen the escritura and you have seen a nota simple showing that the property is owned by the people you are buying from and it is publicly registered so you have a fair idea that the property is legal – this is where the Catastro comes into play.

The Catastro

Whilst the Registro de la Propiedad and the escritura may well confirm the ownership of a property (and in many cases describe the house or land) the Catastro details will give you a better understanding of the boundaries of the property (usually in a visual form) and a description of the property.

The catastral records for many properties are out of date and inaccurate. The Catastral system has been used to formulate the value of properties and therefore to fix the taxable level on each property. For many Spaniards the avoidance of tax is a national past-time and many of them failed to update their Catastral details for fear of paying an increased level of tax.

This updating of the Catastro was always a voluntary system so anyone who failed to update their property in the Catastro (and therefore saved on the tax due) was doing nothing wrong. In many cases nowadays, you will find Spanish owners very reluctant to update their property in the Catastro and it is very difficult to persuade them otherwise.

So, what’s the importance of this system (especially bearing in mind it is voluntary!)?

Well, the problems can arise from situations which are, to be totally honest, highly unusual and infrequent however we have seen a number of situations arise in the last couple of years which is what drew us to the importance of the issue.

If you happen to own a property which is the subject of an Expropriation Order (similar to compulsory purchase in the UK) then the Catastral records for your property are extremely important.

If you live in a property which is 200M2 but it is only registered at 100M2 at the Catastro (it doesn’t matter what is on the escritura or held at the Registro de la Propiedad) then you will receive an offer based upon the value of a 100M2 house and not the one that you are living in (or paid for!).

Equally, if there is a natural disaster (flooding or landslide etc) then you can normally only claim on your insurance as to the registered size and value based upon the records held at the Catastro.

Now, we recognise fully that these are highly unlikely to affect people in vast numbers but with the building of the new toll road (AP46) there have been a number of expropriations in the Casabermeja area and we know of some who are still waiting to find out what compensation they will receive even though they now have a large pillar (supporting an elevated section of motorway in their garden!).

The other main area where your Catastral information is vital is when you are selling to someone who needs a mortgage. Many lenders will require sight of the Nota Simple to ensure the property is legal etc however they will often base their mortgage offer on the details held at the Catastro.

Catastro, Registro de la Propiedad, IBI and escritura

The importance of the Catastro is also highlighted when you come to sell your property on the open market.

A number of documents will be required by your agent (if they adhere to decreto 218) which will include a copy of your escritura, a copy of your Nota Simple (the public records held at the Registro de la Propiedad) as well as a copy of your latest IBI bill.

All of these are important for their own reasons but what is paramount is that they all accord with what you are selling.

There is no point in claiming that you are selling a property of 200M2 when it is registered at the Registro de la Propiedad at 175M2 and is described on the escritura as 100M2 and is registered at the Catastro at €125M2!

Confusion reigns and that is before we even think about whether the pool has been registered when that was added and what each of the above holds about the land!

The last thing you need when selling your property is confusion – a buyer can be put off buying at the smallest possible problem and something like this is definitely going to create concern and doubt in a buyer’s mind.

What can you do to bring all your house information up to date? Certainly a lawyer can help you and in many cases the costs are not huge (hundreds of euros rather than thousands) but you really need to consider all of the above in a co-ordinated way so that you understand which bit needs updating (you may have an up-to-date catastro record but the escritura has not been updated – in which case, don’t worry as this can be updated when you sell the property.

If the above has created more confusion, then we apologise. We are only trying to raise the profile of issues which can affect buyers and sellers and to avoid some of the problems which have occurred in recent years.

If you have any concerns over the paperwork relating to your property, please feel free to contact Torcal Estates and we will happily help you to the extent we can and then recommend a sensible and professional lawyer who can help with the updating.

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