Charges in a Spanish auction: which survive and which go
How to tell whether a Spanish auction property has charges: the certificate of title and charges, which prior charges survive, which are cancelled and how to read it.
What are charges in an auction?
They are third party rights registered against the property at the Land Registry: mortgages, registered attachments, easements, usufructs and the like. They matter at auction for one reason: some disappear with the sale and others travel with the property to its new owner. Mixing them up is the quickest way to pay twice for the same flat.
The short definition, and how it relates to the Land Registry extract and the ranking of each entry.
Which charges survive and which are cancelled?
The rule turns on one thing: where each charge sits relative to the claim being enforced. The notice must warn that charges, encumbrances and entries prior to the claimant's credit will remain, and that by merely taking part the bidder accepts them and agrees to be subrogated into the liability they carry if the property is awarded to them (article 668.2 LEC). Article 669.2 repeats it among the auction conditions.
Whatever comes later is wiped. At the buyer's request an order is issued to cancel the entry of the charge that led to the sale, and the court clerk orders the cancellation of every later entry, even those made after the certificate of charges was issued (article 674 LEC). If the price exceeds what the enforcing creditor is owed, the surplus is held for later creditors and, if anything remains, for the debtor (article 672.1).
| Charge | After the auction | LEC article |
|---|---|---|
| Prior to the enforced claim | survives: the buyer takes it on and is subrogated into the liability it carries | articles 668.2 and 669.2 |
| The enforced one | cancelled at the buyer's request | article 674, first paragraph |
| Later than the enforced claim | cancelled, even if registered after the certificate of charges was issued | article 674, second paragraph |
| Later creditors | paid from any surplus of the price, after the enforcing creditor | article 672.1 |
How to tell whether an auction has charges
You do not need to order anything yourself to start. When enforcement begins, the court asks the Registry for a certificate with the owner and the full list of registered charges, or a statement that the property is free of them (article 656.1 LEC). The notice on the auction portal must include that certificate, the valuation used as reference, any reduction of prior charges and the occupancy status if known (article 668.2).
- If the auction is requested more than six months after the certificate was issued, the clerk may order an updated Land Registry extract, which is also published on the portal (article 656.2).
- During the auction the Registry feeds the portal with registry information kept up to date until closing (article 667.2), and flags any new filing that changes the original picture (article 656.2).
- Part of that documentation is only visible to registered portal users.
Prior charges in an auction: how they affect the price
In an enforcement by attachment, the property goes to auction at its valuation minus all prior charges shown on the certificate (article 666.1 LEC). Before subtracting, the clerk asks those senior creditors how much they are really owed today, because a mortgage registered for one amount may be nearly paid off (article 657.1). If prior charges equal or exceed the valuation, enforcement against that asset is suspended (article 666.2).
A flat valued at 200,000 euros carries, ahead of the attachment, a mortgage with 50,000 euros outstanding. It goes to auction at 150,000 euros. If you bid 120,000 and win, your cost is not 120,000: it is 120,000 plus the 50,000 of the prior mortgage, which stays, plus taxes and fees. The article 670 percentages, such as 70 per cent, are worked out on that 150,000, not on the 200,000.
- Find the enforced chargeLocate the mortgage or attachment the enforcement is based on: it is the line that splits the list in two.
- Separate what is priorEvery entry ranking ahead of that charge survives. Note each one with its secured amount.
- Update the amountsLook in the notice for the statements reducing prior charges (articles 657 and 668.2): the live amount may be lower than the registered one.
- Check what is laterLater entries will be cancelled (article 674), but check the portal's registry information for anything filed during the auction.
- Add it to the priceYour real cost is the bid plus surviving charges, plus taxes, fees and whatever getting possession costs.
Charges that survive the auction: what the Registry does not show
The certificate shows what is registered, not everything that can weigh on the property. Debts the law ties to the property itself even when they are not a registered charge, such as some owners' association or local tax debts, are studied separately and added to the cost. They are covered in the guide to auction costs, taxes and charges.
The auction calculator adds surviving charges, taxes and fees to your bid and returns the maximum bid for the margin you are after.
Reading registered charges takes skill and a mistake is expensive. This guide is for information only, reflects the wording of the Spanish Civil Procedure Act at the update date and does not replace a professional review of a specific property's certificate.
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Frequently asked questions
- What happens to a prior mortgage if I buy at auction?
- If it was registered before the enforced claim, it survives: you take the flat with it and are subrogated into the liability it carries (articles 668.2 and 669.2 of the Civil Procedure Act). That is why the auction value already deducts its amount (article 666.1).
- Are later charges always cancelled?
- Entries later than the enforced charge are ordered to be cancelled, even those made after the certificate of charges was issued (article 674 of the Civil Procedure Act). You have to request the order and file it with the Registry.
- Where can I see the charges of a BOE auction?
- On the auction page of the portal: the notice includes the certificate of title and charges, and the Registry provides registry information kept up to date until closing (articles 667.2 and 668.2 of the Civil Procedure Act). Part of it is only visible to registered users.
- What if prior charges are worth more than the flat?
- In an enforcement by attachment, if prior charges equal or exceed the valuation, the court clerk suspends enforcement against that asset (article 666.2 of the Civil Procedure Act).