The Directorate (CD) has resolved on November 28, 2017 (BOE 14.12.2017) an appeal lodged by the notary granting a deed of sale of property with deferred price, against the calification note issued by the Registrar of the Property for which he suspended his registration, because the guarantee for the price that was postponed had been configured between the parties by means of a pact of reservation of title over the property.
The Directorate profusely deals with the nature of the domain reservation agreement, and rejects the four arguments of the Registrar that substantiated its calification note:
1 The Registrar argued that, since there would not have been a transfer of title, there is no modification of any real right to register in the Registry, in accordance with the provisions of Article 2.1 of the Mortgage Law (LH); also adds that the material result of the pact would be equivalent to the pacto comisiorio, forbidden in Spanish law, since, in case of non-payment of the deferred amount, the seller would recover full ownership of the property without liquidation and without public procedure for setting the price .
The CD inadmits this line of argument referring to the jurisprudential recognition of the pact of reservation of title (STS 12.03.1993) and the possibility also admitted jurisprudentially that the autonomy of the will modulate the purchasing regime of property (Article 609 CC), provided that said will does not imply a contravention of the law, morality or public order (STS 20.06.2000); and although it is true that in the presence of the pact of reservation of title there is no transfer of title, it is also true that such pact generates quasi-real effects (ius ad rem) that must be reflected in the registry, such as the prohibition of disposal of the owner and the best right that assists the buyer before a seizure of the property by the seller’s debts (STS 16.03.2007).
With reference to the identification of the pact of reservation of title with the pacto comisiorio, would be valid also the argument of the CD, because although this is prohibited in defense of the debtor, the pact of reservation of title is admissible, admissibility fruit of the different nature legal status of one institution and another. In addition, the pacto comisorio assumes the direct appropriation by the creditor of the property offered as collateral by the creditor, prohibited by the order for the quantitative difference that may exist between the debt and the value of the collateral, and by the absence of auction mechanism that objectivize such value, being able to produce unjust enrichment for the creditor. However, (i) the title reservation agreement does not imply the appropriation of the guarantor, since it never left the creditor’s estate; and (ii) the valuation of said good is the equivalent of the purchase price freely agreed between the parties, a price that has been postponed and unpaid; and if it were the case that the buyer had delivered some amount to the seller, the reimbursement of said amount must be accredited as a condition for the registration of the ownership of the buyer, in accordance with art. 175.6º of the Reglamento Hipotecario (RH).
2º The second objection raised by the Registrar is that, at its discretion, compliance with the payment obligation cannot condition the transfer of ownership, since the payment is an essential element of the contract of sale and is not reducible to the category of suspensive condition (distinction between conditio factii and conditio iuris), for which reason we would not be faced with a condition on which the consummation of the business depends, but rather with an “agreed modalization of the effects of the business”. However, this reasoning is rejected by the CD in voluntarist terms of jurisprudential origin of protection to the creditor (STS 12.03.1993), and in the very assumption that the fullness of the transmissive effect may be subject to full payment of the price (STS 24.07.2012).
3º The third argument put forward by the registrar refers to the availability of means expressly provided for and regulated in the legal system (Article 11 LH) that produce the same effect, such as the resolutory condition established in Article 1.504 CC. At this point, the CD refers to its resolution DRGN of 12.05.2010 and collects an illustrative doctrine about the character of numerus apertus of real rights, which we transcribe in its entirety:
“(…) As this Directorate has repeatedly pointed out, it is undoubted in our Order that the owner can dispose of his assets, and, therefore, constitute liens on them, without further limitations than those established in the laws (article 348 of the Civil Code). Not only is it possible to establish new real property rights not specifically provided for by the legislator, including any act or contract of an unnamed nature of real significance that modifies any of the powers of ownership over immovable property or inherent rights (see articles 2.2. º of the Mortgage Law and 7º of the Reglamento Hipotecario), but also the alteration of the typical content of the real rights legally foreseen and, in particular (articles 647 of the Civil Code and 11, 23 and 37 of the Mortgage Law) subject them to condition, term or mode. But it is also true that this freedom has to conform to certain limits and respect the structural norms (imperative norms) of the legal status of property, given its economic-political significance and the “erga omnes” transcendence of real rights, so that the autonomy of the will must be tempered to the satisfaction of certain demands, such as the existence of a sufficient justifying reason, the precise determination of the contours of the real right, the inviolability of the principle of freedom of traffic, etc. (Resolutions of June 5, October 23 and 26, 1987 and March 4, 1993, among others).
Indeed, although the condition of termination and the covenant of reservation of title have the same protective purpose of the creditor in case of non-payment of the deferred price, the legal effects pending from one and the other differ essentially, since while in the first case the transfer of title has been full, and therefore the property can be transmitted and seized by the buyer’s debts, in the second case neither the buyer nor the seller can transmit the property, and the action of the creditors of each of them is limited to their own rights. Therefore, the legal regulation of the business must be left to the autonomy of the will while the condition is pending compliance – whether it be suspensive or resolutory – and the deadline for compliance has not elapsed.
4º Finally, the CD also does not accept the rejection of the registration to the registration based on the specialty principle of the property registers, because of the indeterminacy over the domain that the reservation pact originates while the condition is pending compliance . However, for the CD, there is no problem of any ownership indeterminacy since during the pendente conditio period there coexist two opposing but complementary rights, which exhaust the full ownership of the property: the first is current and the second expectant or latent (ius ad rem), and after said period the consolidation of the full domain will take place in favor of the party that duly certifies that the result of the condition was produced in his favor (RDGRN 12.05.2010).
To conclude this brief note, we must point out in practical terms the equivalence of the pact of reservation of title and of the resolutory condition in the registration and insolvency fields, and its substantial difference in the tax sphere:
(A) Regarding the registry regime, it is important to point out the equivalent treatment of the resolutory condition and the domain reservation pact imposed by article 175.6º RH, when, as a result of each one of them, the full domain is reassigned to the seller. In such cases, the registration will be conditioned to the reimbursement to the buyer of the amounts paid.
The quoted registry provision is projected in the private obligational scope by preventing compensation between the necessary reimbursement to the buyer and the possible penalty clause that could have been agreed between buyer and seller in the event that the former did not pay the deferred payment. In this case, the seller is not exempt from making the refund to the buyer of the amounts that could have been paid under the justification that they would have been automatically compensated with the amount of the penalty; but it will undoubtedly have to reimburse them to the buyer so that the registration of their right takes place; This is without prejudice to the fact that – subsequently – the seller may claim the penalty from the buyer through a declaratory procedure, fully subject to the rules on the matter, including the power of judicial moderation of the penalty.
(B) With regard to the bankruptcy sphere, it is only necessary to point out that both the resolutory condition expresses and the pact of reservation of title produce the qualification of the secured credit as specially privileged (Article 90.1.4 LC), with all the consequences legally planned.
(C) Finally, within the tax sphere, two important issues should be noted. (i) although the consolidation of the right of full ownership occurs at different times, the ITP derived from the transfer of ownership will be accrued, both in cases of express condition and as a result of the reservation of title, at the time of the transmission of the good. (Article 2.3 RH, concordant with article 75 of the Law 37/1992 of the VAT); and (ii) although the registration of the resolutory condition is subject to taxation of ITP (Article 7.3 ITPAJD Law) or AJD (Article 73 RITPAJD), it is much more doubtful that the constitution of a domain reservation agreement is subject to to said tax. (Article 7 ITPAJD Law and Article 31 of the RITPAJD).