Agony Ant – Following the paper trail

LAST UPDATED: 11 Sep, 2012 @ 10:08
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Agony Ant – Following the paper trail

THERE are no two ways about it: the Spanish Land Registry system has utterly failed to warn of any of the major problems that property buyers have been hit with recently: land grab, due registration of illegal properties, planning scandals, serious discrepancies between the real and registered sizes and descriptions, etc.

In my opinion, no matter what registrars say about the enhanced security of the system, there are very serious shortcomings that have to be addressed.

Coincidentally, The Daily Telegraph recently highlighted it as a service that provided misleading documentation in indecipherable English.

There are however some interesting features that lawyers, private investigators and other professionals find useful when trying to obtain relevant information pertaining to properties.

The most straightforward way to obtain information on a property is by requesting a search by the name of the person we think owns real estate, or directly by land registry (LR) details if we have them, and collating the results.

It starts getting more complex when we know that a property is ultimately owned by the person but he is using a straw man or a ‘dummy corporation’ to hide the real ownership, and obviously we do not have LR registration details.

In this case, the LR will need details of name of street and number, ownership details of a neighbour or alternatively, if in doubt, one can request all LR certificates on all units of a certain block of flats, urbanisation or road, and then pick the one we think is the right one.

More and more buyers are feeling that using a company is a safer method to buy property, as anonymity is guaranteed.

But this is not always the case: for instance, if you incorporate a Spanish limited company it is possible to make a search by ‘founding member’, and more so where you appoint yourself, or a family member with the same name, as the director.

To avoid exposure, the method of choice is to buy a shelf company, where share transfers don’t get registered unless requested, and appoint a different director different from one.

In this case, only the authorising notary, or the courts, by forcing a shareholder to disclose his/her identity, can produce the results…

It is not unknown for some professionals to use friendship with notaries to extract information on certain transactions that they could not otherwise reach, publicly.

For example, if I am good friends with a notary, I can ask him for information on a specific company share transfer deed which, in principle, is not in the public domain. He may feel inclined to tell me the content of it owing to friendship but as a professional, he is not allowed.

Finally, where someone uses a say a Luxembourg, or Andorran company, it is possible to make searches in the registries of these countries to ascertain details of ownership and directorship.

3 COMMENTS

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  1. Campbell – “What legitimate or moral reason can their be for hiding the identity of an owner?”

    Privacy is the moral default. And a legal right according to EU law. A legitimate or moral reason needs to be provided to take away privacy – or any other right – from an individual. Not to give a person privacy.

    What a strange authoritarian concept of the world you have.

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