Bank auctions in Spain: what they are and how to buy
What lies behind bank auctions, bank repossessions and bank sales in Spain: judicial or notarial auction, bank-owned flats, remate assignment and buying the debt.
What is a bank auction?
When a borrower stops paying their mortgage, the bank is the creditor and can enforce the collateral. But the one who puts the flat up for auction is not the bank: in judicial enforcement the court clerk runs it, and in out of court enforcement, a notary. Both take place on the auction portal of the Spanish Official State Gazette agency, which also hosts tax auctions, since 1 September 2018, and other administrative auctions.
The bank appears in that auction as the enforcing creditor. It may bid even if there are no other bidders and without lodging a deposit (article 647.2 of the Civil Procedure Act). If nobody beats it, the winning bid is in its favour and it can assign it to a third party or take the flat, which goes onto its balance sheet. From then on there is no auction: it is a bank-owned flat sold like any other property.
Read its terms first. The deposit, deadline and threshold rules in this guide are those of the Civil Procedure Act and the BOE auction portal. A sale organised by an individual or a company is governed by whatever its own terms say.
The routes behind it, at a glance
| Route | Who sells | Where | What you buy |
|---|---|---|---|
| Judicial auction | the court, at the request of the enforcing bank | BOE auction portal | the property, with prior charges and any occupancy; deposit of 20 per cent of the value of the asset, minimum 1,000 euros (article 669.1 LEC) |
| Notarial auction | the notary, if out of court sale was agreed in the mortgage deed (article 129 of the Mortgage Act) | BOE auction portal | the property; the deposit and rules are set by that auction's notice |
| Bank-owned flat | the bank, its property arm or the servicer managing the portfolio | bank property websites, servicer websites and general portals | the property through an ordinary sale, with a deed, viewing and possible financing |
| Remate assignment | the enforcing creditor that won the auction | direct negotiation with the creditor | the award of the property at the price you agree with the creditor |
| Buying the debt | the bank or fund holding the unpaid loan | portfolios, servicers and specialist platforms | a right to collect: you step into the creditor's position, including the right to enforce the mortgage |
How a bank's flat reaches auction
- DefaultThe borrower stops paying the mortgage and the loan goes into arrears. Before any lawsuit, refinancing, an agreed sale or a deed in lieu are possible.
- EnforcementThe bank enforces the mortgage in court or, if agreed in the deed, through an out of court sale before a notary.
- Auction on the portalIt is held on the BOE auction portal. A judicial auction lasts twenty calendar days and bids are secret (article 649.1 LEC).
- Winning bidThe best bid that clears the article 670 LEC thresholds wins. If the best one is the bank's, it can assign the winning bid to a third party (article 647.3).
- Bank-owned flatIf the bank takes the property, it goes onto its balance sheet and is sold, directly or through a servicer, as an ordinary sale.
At any point before the award is approved, the debtor can free the flat by paying principal, interest and costs in full, and the auction is cancelled (article 670.7 LEC). Any of these routes can end with no deal for that reason.
Judicial auction of the mortgaged flat
It is the most direct route and the one most people mean by a bank auction. You register on the portal, lodge the deposit and bid. What you buy is a position in a procedure: charges ranking ahead of the claim being enforced survive and you take them on (article 670.5 LEC), the flat may be occupied and you often cannot see it inside. Later charges are cancelled at your request (article 674).
Requirements, deposit, bid thresholds, charges and occupancy, step by step.
Notarial auction: the out of court sale
It is only possible if the out of court sale was agreed in the mortgage deed, in a separate clause, and only for non payment of principal or interest (article 129 of the Mortgage Act). A notary runs it and it is held on the same portal, as a single electronic auction. If someone is living there, possession is requested from the court.
How it compares with the judicial auction: deposit, deadlines, visible bids and possession.
Bank-owned flats: when the auction is over
A bank-owned flat is a property the bank already holds because it took it at auction or received it in lieu of payment. The registered owner is the bank or the vehicle the portfolio was transferred to, and the purchase is an ordinary sale with a deed before a notary. You can view it and finance it. In return, the margin tends to be tighter, and occupancy, condition and homeowners' association debts still weigh.
Where to find them, what to check in the listing and how to negotiate.
Bank repossessions and winning bids
An attachment is not a sale. It is a preventive annotation in the Land Registry securing the collection of a debt, and the owner remains the owner. An attached home is bought through the auction of the asset, by buying the debt behind the attachment first, or by agreeing with the owner that part of the price cancels the debt.
The remate is the award of the auction to the best bid, approved by the court clerk by decree. When the winning bid stands in favour of the enforcing bank, it can assign it to a third party: that is remate assignment. The assignee pays the creditor the agreed price and is awarded the asset without having bid.
Who can assign the winning bid, within what deadline and what risks the assignee takes.
Buying the debt before there is an auction
It means coming in one step earlier. Instead of waiting for the auction, you buy the unpaid mortgage loan from the bank or fund, at a discount to its face value, and step into all the creditor's rights, including the right to enforce the mortgage. It demands much more analysis, because you buy a right to collect and not a flat, and the outcome may be a settlement with the debtor instead of the property.
How the collateral is valued, how enforcement works and the risks.
Where to look
- Judicial and notarial auctions: on the BOE auction portal. To bid you must register with a recognised electronic certificate or with Cl@ve PIN or Cl@ve Permanente obtained in person or with a certificate; those obtained with an invitation letter are not valid.
- Bank-owned flats: on the websites of the banks' property arms, on the portals of the servicers managing their portfolios and on general portals, sometimes not identified as such.
- Debt and remate assignments: through the servicers and funds managing portfolios of unpaid loans, lawyers specialising in enforcement, or platforms such as ours.
You will rarely deal with the bank itself: whoever manages and sells its flats and debt is usually a servicer working for the portfolio owner.
What to check first, whatever the route
- The Land Registry extract: which charges exist and, above all, how they rank against the one being enforced.
- The occupancy status. Silence in the notice does not mean the flat is empty.
- Homeowners' association debts and council tax, which do not show in the extract and follow the property.
- The total cost: transfer tax is calculated on the Cadastre reference value unless the price is higher, plus registry, agency, refurbishment and the cost of resolving any occupancy.
- Deadlines: at a judicial auction you pay the balance within twenty days of the close if your bid reaches 70 per cent of the auction value (article 670.1 LEC), a timetable that does not fit an ordinary mortgage.
At InvertirDeuda we organise the assets that funds manage at a discount, the debt, the collateral, the rank of the charge, the judicial phase and the occupancy, with the data provided by the fund. What is missing shows as no data. We do not buy for you or promise an outcome: we give you access to the information so you decide with your adviser.
Buying at auction, a bank-owned flat or unpaid debt carries risk: undetected charges, occupancy, timelines you do not control and an uncertain recovery value. This guide is informational, reflects the rules in force at the date of update and does not replace professional advice on a specific transaction.
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Frequently asked questions
- Do banks hold property auctions in Spain?
- Not in the sense usually searched for. When a bank enforces a mortgage, the auction is run by a court or, if agreed in the deed, a notary, and held on the BOE auction portal. The bank takes part as the enforcing creditor. Flats it already took are later sold through ordinary sales.
- Where can I see auctions of flats repossessed by banks?
- Judicial and notarial ones, on the auction portal of the Spanish Official State Gazette agency, which also publishes tax and administrative auctions. The BOE notice is terse: the terms, the certificate of charges and the occupancy status, where recorded, are in the notice on the portal.
- What is the difference between a bank auction and a bank-owned flat?
- At the auction the flat still belongs to the debtor and is sold in a procedure, with secret bids, legal thresholds and prior charges that survive. A bank-owned flat already belongs to the bank, which sells it with a deed before a notary, and you can view and finance it.
- Can I buy an attached flat before it goes to auction?
- Yes, in two ways: buy from the creditor the debt behind the attachment and take its position, or agree a sale with the owner in which part of the price cancels the debt and lifts the annotation. The debtor can also free the asset by paying everything owed before the award is approved (article 670.7 LEC).
- What do I need to bid on the BOE auction portal?
- Register as a user with a recognised electronic certificate or with Cl@ve PIN or Cl@ve Permanente obtained in person or with a certificate, and lodge the deposit the auction sets. At a judicial auction of a property it is 20 per cent of the value of the asset, with a minimum of 1,000 euros (article 669.1 LEC).