Priority

1. Criteria for setting priority. How is priority established? Is priority guaranteed by the fact of presenting firstly a document against other document that is potentially incompatible?

Unique criterion for setting priority is the LR presentation entry and its date. Spanish Mortgage Act establishes that the registration date will be the presentation entry date and will appear in the registration.

The time at which deeds are submitted in the Registry will be the decisive element to establish the preference between two or more registrations with the same date that refer to the same property.

Specifically, Spanish Mortgage Act envisages that once a deed whereby ownership or property rights have been transferred or granted, have led a registration, deeds incompatible with the deed firstly registered shall not be admitted.

So, for example:

Reservation of priority: Bearing in mind what we’ve just told above, Spanish procedure for presentation couldn’t be considered technically a “reservation for priority” like other systems, not even in case of presentation by fax.

Of course, Spanish entry of presentation grants priority. Legally priority of document is assigned officially by an entry (“asiento de presentación”) of the LR Journal (“Diario de Operaciones”). But only if documents have been definitely concluded can be presented and cause an entry in the Journal. Otherwise nobody and nothing may reserve any priority. Never a previous notice or application could reserve priority.

2. Are there any possibilities of that a document presented later may go ahead or prevail in priority rather than other documents or deeds presented earlier?

Finally, there are no possibilities that a document presented later may go ahead or prevail in priority rather than other documents or deeds presented earlier. Rules about priority are rigid.

Then, if there was a legal problem about preferences among ownership of property rights on the same real estates and some of the parties esteem there is damage, should rely on Judges and Courts, but Spanish LR response is clear.

3. Let’s suppose a document presented firstly that consequently holds priority but is affected by defects or lack of legal requirements. How long would it keep priority against other document presented later?

Although a document presented firstly is affected by defects or lack of legal requirements, it will conserve its LR priority against other incompatible document later presented for the lifetime of the presentation entry (60 working days from the date of presentation on).

It’s important to warn that in case of rejection of a document, its provisional entry or entry of presentation, is extended 60 days of an additional deadline from the notification of the negative decision.

Furthermore, Spanish Mortgage Law admits a possibility to extend priority of entry of presentation relying on the Court and getting an order for a special caveat or preventive annotation (which would extend the deadline until 180 working days). But it’s necessary that the defects or omissions of the document are rectifiable. Thus, this caveat may take place only in situations of abeyance of registration and never if the defects are not rectifiable or remediable (absolute rejection).

Once finished these deadlines, if defects or inaccuracies haven’t been corrected, the documents firstly presented will lose their priority face to other presented later, which prevail.

In practical terms: LR Priority has not indefinite duration.