Another step to protect purchasers in good faith

AUAN and SOHA, the associations campaigning against planning abuses, have released information about an important new step taken by the Socialist Group in the Senate, aimed at giving legal security to third party purchasers in good faith who invest in the Spanish property market.  The Socialist Group has presented an amendment to an existing Bill to reform the Mortgage Act (Ley Hipotecaria) and the Catastral Property Act. It is anticipated that the proposed amendment of the PSOE will be debated in the Senate on the 12th and 13th May.
 
The amendment originated from a proposal developed by AUAN and its sister association, SOHA, in Malaga.  According to the legal advisor of these associations, Gerardo Vazquez, ‘the idea of this amendment is to give greater legal certainty to the Property Register.  A buyer must be able to rely on what the Land Registry says because that is why it exists. The problem is that there is an interpretation of the Mortgage Act by the Supreme Court that says the Land Registry does not protect innocent third parties against urban problems that have not been noted on the register. That is to say, anyone can buy a property that appears to be perfect according to the Land Registry, with no sign of a problem, but the house could be illegal and this person is not protected by the Register. This creates considerable legal uncertainty which this amendment proposes to resolve so that a third party purchaser has the right to rely on the legality of a construction inscribed in the Register’.
 
Asked about the chances of this amendment being approved Sr. Vazquez said ‘As I have said before I have confidence in the political parties. I believe that more and more there is an appreciation of the need to work to solve the real problems of the people, and I believe that we should all pull in the same direction to give legal security to the Spanish property market, encouraging investment and social and economic growth. The associations are grateful that their proposition has been supported by the Socialist group in the Senate, and hope that other political groups will join this initiative, because its approval depends on their support’.
 
Sr. Vazquez added however that ‘this amendment is not the end of the road but it is a big step along the way.  AUAN, SOHA and another association in Cantabria known as AMA, have proposed another legislative change, this time to avoid the revocation of a planning permission and the demolition of  houses without a guarantee of fair compensation to a third party who did nothing wrong.  Because whilst it is true that the recent change in the Criminal Code gives purchasers in good faith some protection against demolition without compensation via the criminal courts, these demolitions can also be ordered by the administrative courts creating the necessity for a change to the law regulating the Administrative Courts.  We understand that the PSOE is going to present a bill to the Spanish Parliament to do this.  And it must be said that this change is not only being asked for by those affected in Andalucía but also by groups in other parts of Spain. It is especially significant that a few days ago, the Parliament of Cantabria asked for this change to the state law with the unanimous approval of all the political parties in this parliament, including the PP, PSOE and the Partido Regionalista de Cantabria’ .
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