Real Estate Law

What is Real Estate Law?

Real estate law consists of the part of Law that applies relative to real rights, contracts on real estate, urban planning law, notarial and registry law, being a transversal matter that is based on the Constitution, the Civil Code and its Complementary Legislation and Foral Civil Codes.

It primarily regulates real estate transactions and the legal regulation of real estate, real rights, as well as legal transactions that may affect them.

Its object is the regulation of real estate, noting that it includes both property and real rights, as well as the different legal transactions that may fall on them.

Basically Real Estate Law has as its object the properties, that is, housing or commercial premises, land, etc.

Real Rights

Real rights are the right that falls on things, that is, they tell us the powers that can be exercised over assets by the holder of the right, regardless of who holds the ownership of such assets.

It is the immediate power over the thing that, consequently, its holder can enforce against anyone.

Property Right

The property right is the broadest power recognized by the legal system over a thing, which is defined by the union of three powers:

1. Enjoy a thing (ius utendi)
2. Dispose of it (ius abutendi)
3. Claim it (ius vindicandi)

Accession Right

From property derives the Accession Right, which implies that you have the right to what the assets produce, or what is joined or incorporated to them, either naturally or artificially.

Limiting Rights of Domain

They are rights that restrict the property right itself. They include:

Real Rights of Enjoyment

• Usufruct: Right to use and enjoy others' assets with obligation to preserve them
• Easements: Burden on a property (servient estate) for the benefit of another (dominant estate)
• Surface: Right to build on others' land or to maintain buildings
• Air and Subsoil: Rights over airspace or subsoil
• Census: Real right over real estate in exchange for pension or canon

Real Rights of Guarantee

• Pledge: Real guarantee over movable assets
• Antichresis: Guarantee by which the creditor receives the fruits of the real estate
• Mortgage: Real guarantee over real estate (although not in the original list, it is fundamental)

Real Rights of Preferential Acquisition

• Right of first refusal: Right of preferential acquisition when the owner decides to sell
• Right of retraction: Right to subrogate in place of the buyer

Real Right of Possession

It gives immediate right over the thing and to be reinstated in that right and not be disturbed.

The great blocks within the Real Right of possession would be:

• Leases
• Occupation

Strict Real Estate Law

Real Estate Sale

Includes:

• Urban planning and registry checks
• Earnest money contracts
• Purchase option

Earnest Money Contracts

Earnest money is a sum of money that is delivered as a signal at the time of formalizing a purchase contract.

Types of earnest money:

1. Confirmatory earnest money: They confirm the contract and are deducted from the price
2. Penitential earnest money: They allow withdrawal from the contract (the buyer loses the earnest money if they withdraw; the seller returns them doubled if it is they who withdraw)
3. Penalty earnest money: They are a penalty for breach, compatible with demanding contract compliance

Purchase Option

Contract by which one party (grantor) grants another (option holder) the right to buy real estate within a determined term and price.

The option holder pays a premium to the grantor for this right.

Constitution and Administration of Owners' Communities

An owners' community is the set of owners of the different apartments and premises of a building that is in horizontal property regime.

Aspects we regulate:

• Statutes and internal regime rules
• Owners' meetings
• Participation quotas
• Common expenses
• Neighborhood conflicts
• Default in payment of common expenses
• Community administration

Urban Planning Law

It regulates both land use and territorial planning and the legal instruments through which such activities are carried out.

Certain parts of this regulation are included within real estate law, such as:

Property Grouping

Union of two or more adjacent properties to form a single property with a single title of ownership.

Property Segregation

Division of a property into two or more independent properties, as long as they comply with the applicable urban planning regulations (minimum plot, buildability, etc.).

Requirements:

• Compliance with urban planning regulations
• Municipal license if necessary
• Registration in the Property Registry

Real Estate Registry Law

It covers the way and manner in which registry entries are dispatched and what rights can be registered and how.

Property Registry

The Property Registry is an official institution whose purpose is the registration or annotation of acts and contracts related to ownership and other real rights over real estate.

Functions:

• Publicity of real estate ownership
• Legal security in real estate traffic
• Protection of third parties in good faith
• Presumption of accuracy of registry entries

Registry Entries

Types:

1. Registrations: Main entries (sale, mortgage, etc.)
2. Preventive annotations: Provisional entries (embargo, lawsuit, etc.)
3. Marginal notes: Complementary entries to a main registration
4. Cancellations: Extinction of registered rights

Urban Leases

Housing Lease

Contract by which a person (lessor) cedes the use of a housing to another (lessee) in exchange for a price (rent).

Regulation: Urban Leases Law (LAU)

Duration:

• Minimum 5 years (if the lessor is a natural person)
• Minimum 7 years (if the lessor is a legal person)
• Mandatory extensions until these terms are met

Deposit:

• 1 monthly payment (housing)
• 2 monthly payments (commercial premises)

Business Premises Lease

Lease contract for the exercise of a commercial, industrial or professional activity.

Characteristics:

• Greater freedom of agreements than in housing
• Minimum duration of 5 years with right to compensation for clientele at the end
• Possibility of assignment and sublease with consent

Evictions and Occupation

Eviction for Non-Payment

Judicial procedure to recover possession of leased real estate when the tenant does not pay the rent.

Eviction for Expiration of Term

When the lease contract ends and the tenant does not voluntarily vacate.

Illegal Occupation (Squatting)

Occupation of a housing without legal title or consent of the owner.

Ways of action:

• Civil route: Eviction lawsuit for precarious possession
• Criminal route: Complaint for usurpation crime (art. 245 CP)

Real Estate Law Advice

At IURIUM CONSULTA we are lawyers expert in Real Estate Law. We offer comprehensive advice on:

• Real estate sales
• Earnest money and purchase option contracts
• Urban leases
• Owners' communities
• Real rights (usufruct, easements, etc.)
• Urban planning law (segregations, groupings)
• Registry law
• Evictions and illegal occupation

Contact us for a personalized consultation on your real estate matter.