Identification of the parties

Legal and Tax advice from Fernando Aliaga

This refers to a quite common problem such as the change of a passport number or identity card number in the period between the purchase of a property and its subsequent sale.

This happens on quite a few occasions with British subjects, whose passport numbers change when their passports are renewed, leading to an apparent discrepancy between the passport number recorded upon the purchase of a property and the passport number presented when the property is sold or when, in the case of divorce, a woman renews her passport under her maiden name.

In our opinion the most important consideration is that the notary correctly identifies the person who appears to grant the deed. A resolution of the general directorate of notaries and registrars dated August 17, 2011, resolved a similar case to the ones given as prior examples.

The resolution considered the case of a donation made by a mother to her son. In the deed of donation, the national identity number ( DNI) of the mother who was the owner of the property did not coincide with the DNI that was recorded when the property was purchased. The notary deemed that the grantor ( the mother) was sufficiently identified and attached a copy of her DNI to the deed but no specific mention of the fact that the mother had held a different DNI number when the property was purchased was mentioned.

The registrar refused to register the deed of donation on the basis of a doubt concerning the identity of the mother and whether she was really the same person who had purchased the property originally with a different DNI number to the one used upon making the donation.

The notary filed an appeal alleging that the registrar had extralimited her functions as only the notary is empowered to emit an opinion with regard to the identity of the persons who grant a deed.

The General Directorate turned down the notary’s appeal, this indicates that it is always a good idea for the notary to state, in the case of a change of passport number, that the grantor of the deed is the holder of the passport number in their current identity document and previously was the holder of the corresponding passport number upon purchase of the property.

The effects of mentioning the sale of furniture in the title deed

Should the value of the furniture and fittings be included in the ‘ price’ of the property? If they are mentioned what implications should be taken into account?

A title deed for a property can also reflect any contractual agreement between the parties as long as this is legal, including obligations and prohibitions and any others. Therefore, in principle we can see no impediment for the situation described above not to be mentioned. However, another matter is what effects in the land registry would the mention of the furniture have and the fiscal implications of this. With regard to whether a title would be registered for the furniture the answer is no as the

Land Registry Office serves the purpose of registering all those acts and contracts with regard to the ownership and other rights that could be constituted against real estate.

The said registration of acts and rights is made in the land registry office of the area in which the actual property is situated. For legal effects, it is presumed that all those rights that are registered in the land registry exist and belong to the owner in the manner determined by the content of the respective registration. At the same time, it is presumed that the persons who have the ownership registered in their favour also have the possession of the property or rights that are registered in their name.

Therefore, we could say that the land registry office is a public office whose content is presumed to be known to all third parties and which has a fundamental importance as it is the registry where are all those rights of ownership and other rights that can be registered against a property are documented as long as these have been formalised in a public document or by virtue of any other document that is susceptible to be registered in the land registry. At the same time one would have to take into account the fiscal implications that the mention of the furniture could have and whether the sale of the furniture would generate a patrimonial gain, and subsequently, whether the vendor would have to accredit to the fiscal authorities, in the case of a tax inspection, the price for which they were acquired so as to demonstrate the effective profit made or not.

From the point of view of the purchaser, the acquisition of movable assets is also subject to taxation ( transmission tax) although the rate would be different from the rate applicable to the purchase of property.

However, despite the fact that the sale by one party and the purchase by the other of the furniture gives rise to fiscal liabilities for each party, the actual registered title in the land registry would not make a mention of the furniture although any obligation between the parties with regard to this would be written into the deed.