A property developer sells a dwelling to a married couple by means of a private contract, with the condition that the public deed of sale will be executed within three years. Once that period has elapsed, the deed is not executed and neither party formally requires the other to complete the sale. The developer-seller considers that the sale has been terminated and that the buyers have withdrawn.
Subsequently, the developer sells the same dwelling again to a third party, who pays the property tax (IBI) and redeems the mortgage, but is unable to take possession of the dwelling because the couple who first purchased the property are still living in it and have refused to vacate it in favour of the last purchaser.
What legal action can the third party, who has paid and continues to pay all the expenses relating to the property, bring?
In the first sale, delivery of the dwelling to the buyers took place (Article 1462 of the Spanish Civil Code), which resulted in the transfer of ownership (Article 609 of the Spanish Civil Code). By selling the same property again, the developer carried out a sale of property belonging to another.
The new purchaser is not protected by the principle of reliance on the Land Registry (Article 34 of the Spanish Mortgage Act), since she lacks good faith, as she knew that the seller appearing in the Land Registry as the registered owner was not in fact the owner, given that the property was occupied.
The only action available to the new purchaser is to bring an action for termination of the sale and purchase agreement against the selling company for breach of its obligation to deliver the property that is the subject matter of the contract (Articles 1461 and 1124 of the Spanish Civil Code).
