paperwork on house is ok but there is an article 205 on the house ?

Hi,

Am looking at a wonderfull piece of property in spain and have consulted the broker that tells me all the paperwork is fine but there is an article 205 on the house that will automatically resolve in 2 years..

So my questions is what is an article 205 and where can i read more about it ?

does anyone know ?

all the best

mickey

If the Escritura refers only to a building, the seller needs to register the land in his name with the Town Hall to obtain a Cadastre certificate prior to selling. The procedure requires also 2 witnesses who will swear on oath that to the best of their knowledge the property belongs to the person selling, and once this is done, at the same time, he can sell to you. The drawback is that a third party can claim title within the next two years and that banks will not lend on this property. Also, you will possibly be taxed twice, once for the first registration of the property and secondly for the sale. This has to be thrown into the negotiation process.

The above procedure is commonly known as Acta de Notoriedad, or Procedimiento del artículo 205 de la Ley Hipotecaria, and even though it may sound risky it is not normally the case. This is quite common in small towns, villages and rural areas.

thanx.. that is exactly what it is...

oh well guess i will continue to look as the morgage company will not accept this..

all the best

mickey

Hi Mickey, with Jacqui posting that banks will not lend on this property (re article 205), is that why you said the morgage company will not accept this.

Reason I ask is that I saw this  >>>>> HERE 

When one comes across difficulties, and finds there are charges like those described in articles 205 or 206 of the Mortgage Act, we recommend consulting a solicitor. If the buyer is getting a mortgage with a bank, the banker will make sure that everything is in order, otherwise he will not lend the money; so if this is the case, it is normally not necessary to consult a solicitor.

It sounds as if a bank may lend if they're happy everything is in order so your dream could still be your dream.

Well spotted More, I was looking for an explanation of what article 205 was, and didn't look any further.

i have already spoken to them and they will not touch it with a 10 feet pole , but hey, there are plenty of other houses on the market so is just a matter of going back to househunting i guess...

The probability is that they have checked and wont touch it as there could be an ongoing or potential future issue - hence as  More quotes - the banker will make sure that everything is in order, otherwise he will not lend the money;

Thus one assumes they have in fact done their checks and decided that everything is clearly not in order.


That being said there are some lenders that treat things like this  more seriously than others and if it one of the recent immigrant lenders to Spain they will likely steer clear of anything they do not fully understand.