Checking seizures and encumbrances

An encumbrance on a flat is common and very often no obstacle at all: most flats on the resale market are mortgaged to a bank, and that is ordinary. It becomes an obstacle when it is discovered after the money has moved. The check takes a few minutes, and you can run it yourself without asking the seller.

Why you check it yourself

Before certifying the deed the notary checks the data, and that is the strongest protection in the whole purchase. The difficulty is that the notary arrives last — by then a reservation fee has been paid, possibly an advance, and decisions have been taken about your money and your life.

So the check runs in two stages: the buyer checks first, as soon as a flat starts to look right, and the notary checks again before signature. The first stage is the cheapest and fastest piece of due diligence available anywhere in a purchase.

Which entries matter

The entries that matter to a buyer are these:

• seizure — a restriction on disposing of the property imposed by a bailiff, a court or another authority; a seized flat will not be certified for sale;
• mortgage — security for a credit obligation; not an obstacle in itself, but the transaction needs a clear mechanism for discharging it;
• servitude — someone else's right to use the property in a particular way, more often relevant to land but it occurs with buildings;
• usufruct, loan for use, a right of residence for life — rights letting another person use the flat after your purchase;
• a registered lease — the tenant stays after the owner changes;
• conditions and pending proceedings, where somebody has registered them.

Look at the number of owners as well. Where there are several, all of them belong in the transaction; where the property is joint matrimonial property, a spouse's consent is needed; where a share is being sold, co-owners may hold a pre-emption right over it.

Where to look

The main source is the Real Property Register extract, which shows both rights and restrictions. A few others sit next to it:

• the Register of Property Seizure Acts, where seizure acts are recorded;
• the register of legal entities, if the seller is a company: whether it is active, who manages it, whether it is in bankruptcy or restructuring;
• published notices of enforced sales, where there is real reason for concern;
• a certificate from the building's manager about arrears — not a register, but it does the same job.

An address or a unique number is enough, and register data are obtained through self-service after logging in with an electronic identification means.

When to check: more than once

An extract shows the position only at the moment it was ordered. A seizure can be registered on any day, including between the preliminary agreement and the deed. So the check happens at three points at least: before the reservation, before any significant payment, and on the eve of signature.

The most exposed stretch is between the transfer of money and the register entry naming the new owner. That is what the safeguards exist for: the notary's deposit account, or the payment sequence the bank imposes. Which safeguard applies is agreed in the preliminary agreement, not on signing day.

What to do if you find something

The first step is not to walk away but to read the entry properly: who registered it, on what basis, and how far it reaches. A mortgage to a bank and a bailiff's seizure are entries of very different weight, and they call for different answers.

The second step is to ask the seller how and when it will be removed, and to have that written into the contract as a condition without which the transaction does not proceed. The third is to put the extract in front of a notary or a lawyer before any payment. If the seller will not answer clearly, or offers to sort it out later, the question has stopped being legal and become a decision.

This article is general information and is not legal advice. What a particular entry means for your transaction can only be assessed by a notary or a lawyer with the full extract and the documents in front of them.