Buying an occupied flat at auction

The answer starts in the auction notice, and almost nobody reads it

The law requires the auction publicity to state, in as much detail as possible, the occupancy status of the property, or that it is vacant where that circumstance is properly evidenced to the court clerk (article 661.1 LEC). That paragraph decides whether you are buying a flat or a flat plus a legal procedure.

Be careful not to read it backwards: a notice that says nothing about occupancy does not mean the flat is empty. It means the file contains nothing. Silence is an unknown, not a guarantee, and it should be priced as risk until you check.

Where the file shows people other than the debtor occupying the property, they are notified so that within ten days they produce the titles justifying their situation (article 661.1). That step is the source of whatever the notice can tell you about who is inside.

Two routes, depending on what the creditor did before the auction

Everything turns on whether the creditor asked the court, before the auction was announced, to declare that the occupants have no right to remain in the property once it is sold. The court grants it by an order with no appeal where they can be considered occupants in fact or without sufficient title, and the declaration is recorded in the auction publicity (article 661.2).

• Where that declaration exists: the court clerk orders eviction immediately, fixing an exact day and time (article 675.2). That is the good scenario, and it is written in the notice itself.
• Where it does not: the buyer can ask the enforcement court to evict those who can be considered occupants in fact or without sufficient title. They are summoned to a hearing within ten days, where they can argue and prove what they see fit, and the court decides by an order with no further appeal (article 675.3).
• Where the court declared that the occupants do have the right to remain: there is no eviction on this route. The future buyer keeps whatever actions may be available to remove them, which is a separate and far longer procedure (article 661.2).

One detail runs in the buyer's favour: if the summoned occupants fail to appear without good cause, the court orders eviction in any event (article 675.3), and since 2023 the order must fix an exact day and time (article 675.4). An eviction with no date was the most common way for a removal to drag on forever.

An occupant in fact and an occupant with title are different animals

The law separates whoever occupies without sufficient title from whoever holds an enforceable right: the fast route of article 675 works against the first, not the second. The difference is invisible from the street, it shows in the titles filed in the proceedings, in the registry extract and in the notice. That is why occupied is not a useful category for valuing an asset.

A tenant with a contract stays, and that has to be priced

This is the case most often missed. Where the landlord's right is extinguished by a forced sale arising from mortgage enforcement or a court judgment, the tenant is entitled to continue the tenancy until five years of the contract have run, or seven years where the landlord is a legal entity (article 13.1 of Act 29/1994 on urban tenancies, as it now reads).

Put plainly: you inherit the tenant, with their rent and their term. That is not a problem in itself, since a let property produces income from day one, but you buy an asset with a rent set by somebody else and an exit date you did not choose.

Two nuances before you bid. Where the contract was agreed for longer than those five or seven years and they have already run, the tenancy is extinguished, unless it had been entered in the Land Registry before the rights that extinguish the landlord's title, in which case it continues for the agreed term. And the wording that applies is the one in force when the contract was signed, not today's.

Evidenced vulnerability: eviction is suspended

There is a statutory case where eviction does not proceed even though you hold the award decree. Article 1 of Act 1/2013 provides that eviction shall not proceed where, in judicial or extrajudicial mortgage enforcement, the primary residence of people falling within the situations of special vulnerability and the economic circumstances the Act lists has been awarded to the creditor or to any other natural or legal person.

The scope matters: it applies to a primary residence, inside mortgage enforcement, and to any grantee, not just the bank. It runs until fifteen years have passed since the Act came into force on 15 May 2013, that is until May 2028 unless extended again.

• Paragraph 2 lists, among others, a large family, a single parent household with a dependent child, a household with a minor, a recognised disability of 33 per cent or more, unemployment of the mortgage debtor, a victim of gender violence and a debtor over 60.
• Paragraph 3 adds the economic tests: an income cap referenced to the Spanish IPREM index, a significant change in circumstances over the previous four years, an instalment above 50 per cent of net household income, and the property being the debtor's only home.
• Both sets have to be met. Belonging to a vulnerable group or having a low income is not enough on its own.

What happens if eviction is suspended or delayed

An eviction that has been ordered may not happen on the day fixed: the occupant evidences a title, the Act 1/2013 case applies, or listings slip. Meanwhile the property is yours, you answer for the costs that follow it and you collect no rent.

That is why occupancy is budgeted as time, not as a one off expense: every month adds holding cost and the opportunity cost of tied up capital, and that is what eats your discount. We do not publish an average timeline because we have no source that measures one rigorously, so run the deal across several month scenarios and see where it stops making sense.

How to read occupancy before bidding

1. Read the occupancy section of the notice and look for the article 661.2 declaration. If it is there, eviction is ordered immediately.
2. Check whether a tenancy is entered in the Land Registry and on what date relative to the mortgage or charge being enforced.
3. Check whether the property is the debtor's primary residence and whether the auction comes from mortgage enforcement. That is where the Act 1/2013 case bites.
4. Ask to inspect the property during the bidding period: the court passes the request to whoever is in possession, seeking consent (article 669.3). A refusal is information too.
5. Budget the procedure and the months, and subtract them from your maximum price before bidding, not after.
6. Put the one year deadline from acquisition in your calendar.

The mistakes that cost the most

• Assuming a flat is empty because the notice says nothing about occupancy.
• Treating occupied as one category, without separating an occupant without title, a tenant with an enforceable contract and evidenced vulnerability.
• Negotiating an exit for months and letting the article 675.2 year lapse.
• Not budgeting the running costs that follow the property while you do not hold possession.
• Counting on the fast route against a tenant protected by article 13.1 of the Tenancy Act.

Buying an occupied property carries risk: timelines you do not control, running costs while you wait and the possibility that the occupant holds a title that lets them stay. This guide is informational, reflects the wording in force at the date of update and does not replace professional advice.