Many Brits own property in Spain. In most of the cases, the property is owned by a married couple. So, what happens when the couple divorce or, more specifically, who gets the Spanish property?
The most normal thing is for the Judge who deals with the divorce to make a provision in the decree for the distribution of the assets. This includes the Spanish property and in most occassions the property is assigned to one of the spouses solely (usually in compensation for another asset being assigned to the other spouse). However, this is not necessarily the end of the procedure and further paperwork needs to be sorted in Spain.
The truth is that it is still necessary to sign some extra documents, otherwise the property will not be effectively transferred to the new owner. So, what are the steps to take to ensure that the property is effectively transferred?
The first and perhaps more important step is to ensure that the Judgment, specially if it is a UK Judgment, explains who gets the Spanish property. Furthermore, the Judgment needs to be precise and describe the property address with the same description that is contained in the title deeds. If not, this could lead to misunderstandings or unexpected problems with the registration.
The second step is to speak with the local land registry in Spain and see if it will agree to transfer the property without the need of a further transfer deed. Some registrars accept to do this as long as the UK judgment is clear about the destiny of the property and the description contained in the judgment corresponds with the property’s address. The Judgment will also have to be legalised with the apostille of the Hague Convention and translated into Spanish by an official translator.
Now, some registrars will not consider the above sufficient and will demand that the spouses signs what is called a termination of co-ownership. If this is the case, the spouses will have to fly to Spain and sign the said deed. This deed will be subject to stamp duty tax 1% and a lawyer will probably be required to organise the transfer. For those who do not want to fly to Spain (or sit with the “ex” in the same room when signing the deeds!), a power of attorney can be the solution. The power of attorney can be signed in the UK and can be given to the “ex” if this can be trusted or, preferably, to a lawyer. The attorney will then sign the termination deed and deal with the new registration.
It is very important to complete the procedure. I have seen many situations where one of the spouses was under the impression that the property had been transferred to the other spouse and then found out that this was not the case. This could be a big problem when there is a mortgage on the property or when the spouse who is using the property has not paid community charges and taxes. In the end, it could lead to liabilities for the spouse who surrendered the property.
For all the above reasons, any person who is divorcing and has an asset in Spain would better check the Spanish property situation with a Spanish lawyer. The UK lawyer will be able to advise on the UK side of the divorce but will not be able to deal with the transfer of the Spanish property and therefore this asset can be left unattended. An even better option is to engage a law firm that counts with both UK and Spanish solicitors. There are a few in the UK, although mainly in the big cities. DWF being one of them.
More interesting topics next week!
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