"It was my first house purchase and my parents told me to get good advice. So I did and an estate agency found me a basement property that I could afford and a financial consultant looked for a lender for me. After carrying out a financial assessment, they confirmed my mortgage.
The problem arose when I signed for my property as it turned out that what I had signed for was not a residential property but commercial premises.
The estate agent told me that the information in the Land Registry was incorrect and the Notary had further confused the issue when talking about 'immovable property'.
They said my case was really unusual but the fact remained that I had a commercial property instead of a flat. The consequent problem was that the change in classification severely affected the market value of my property.
Fortunately, I was able to benefit from the legal services of my title deeds insurance. They solved my case by dealing with the Registrar, the owners' association and with all the neighbours.
They managed to change the use of my so-called 'immovable property' so that now it is registered as a residential dwelling."
B. E.. – Madrid
This is an excellent example of what happens when properties - residential, commercial or otherwise - are registered incorrectly at the Land Registry.
No administrative system is infallible and registration or inscription errors are very common indeed. The inscription process that includes registering the new owners as well as any mortgage deed against the property occurs after you have signed at the notary.
Sometimes, if the registrar finds problems or uncovers previous errors, your inscription may be delayed or, worse, denied until these issues are resolved.
That means, despite handing over your money to the vendor, you fail to acquire your legal title to the property.
Resolving these problems involves more legal intervention, more costs and would prevent you from selling your property until your title is secured.
These type of problems can lay undiscovered for years and only surface when you come to sell your property. Delays or legal problems at the point of sale can easily deter would-be buyers.
In the case above, the issue was more serious since the error materially affected the market value of the property.
Even public notaries can make mistakes or fail to notice the finer detail. Fortunately in this case, our lawyers were able to reclassify the property at no cost to the owner.
Would you have known what to do if this situation happened to you?
For sure, without the peace of mind of title insurance, this client would have been facing additional legal expenses if she had been forced to rectify the problem herself.