A recent Supreme Court ruling dated 28 May 2019, analyses a case in which a same property is sold to two different buyers and it declares once more the importance of registering your property at the Land Registry.
In the case at hand a company (“First Owner”) sells to another company (“First Buyer”) a plot. The sale is formalised in two different private contracts, August 2002 and February 2003, and then notarised on April 2004.
In November 2003 another sale occurs before the Notary by which a company (“Second Buyer”) purchases several plots, two owned by an individual – the director of the First Owner- and the other owned by the First Owner, which had previously been sold to the First Buyer.
In July 2004, the First Buyer tries to register its purchase and the registrar denies its registration given that such plot was already registered under the name of the Second Owner.
In 2009 the First Buyer lodges a claim against the First Owner and the First Buyer requesting its ownership to be declared following his purchase to the First Owner and requests the court to declare the second sale to be partially null and void or, in the contrary, to declare that the plot which had previously been sold to them was not included in the second sale.
Once the matter reaches the Supreme Court, the Second Owner wins the case and it is declared that they must maintain their ownership since they registered their purchase and acted in good faith and can prove that they knew nothing about the first sale and therefore are covered by the Land Registry’s protection.
The ruling, regardless of the above, emphasises the gross negligence of the director of the First Owner and in consequence, leaves open the possibility to the First Buyer to claim damages.
This case must be taken into account by all real estate buyers in Spain as to dully register their purchases in time and avoid future legal risks, since in some occasions due to neglectful attitudes or trying to save costs, this is not done.