On the subject of contracts, in Spanish Law governs the principle or general rule of freedom of form. This principle is also applicable to the real estate conveyance: the contract exists and is effective (any one that is the form in which the parts had celebrated it - verbal, private contract, etc.-), whenever the essential requisites for the validity of any contract are present: assent of the contractors, specific object (the concrete Real Estate) and cause of the obligation (the price that is paid for it’s acquisition).

 The private contract has de same validity that the public Deed (if can be proved the payment of the price and the handover of the possession), but only between the persons who signed it and their heirs. Its efficacy is, therefore, relative, since, on not having had access to the Property Registry, his effects do not harm to third parties, in contrast to the public Deed (so by virtue of the intervention of the notary, it possesses efficacy erga omnes with regard to the date and to the fact that motivates its granting).

 Also, the property acquired by means of private contract remains subject to the risks derived from a possible claim by part of possible heirs or creditors of the seller.

 The Spanish civil Law, of course, allows buyer and seller to demand each other to grant the public Deed. If the required one refuses to grant it, the other party can go to the court to demand it’s granting.

Effects of the Purchase formalized in private contract  

  The Purchase in private contract produces the following effects:

 a.      The date of the document is considered to be true (with regard to third parties) only from the day in which the document is incorporated or registered in an Administration record or is delivered to a civil servant because of his office.

b.      The private document only has the same value as the public Deed when it had been legally recognized. Still in this case, his efficacy limits itself to those who have signed it and to their heirs.

c.      It does not have access to the Property Registry.  

d.      It is not possible to mortgage the Real Estate bought in private contract.

 As date of the private documents, to the effects of the prescription of taxes (Purchase Tax and Stamp Duty Tax), the law presumes that date of its presentation to liquidation (unless there exists incorporation or inscription, death of one of the signatories or public servant delivery).

 The absence of inscription does not alter the nature of the Purchase: this one exists and is valid without need to be recorded in a public document. It is perfected by the delivery of the possession of the Real Estate and the payment of the price, without need of any more formalities. The buyer cannot refuse to the payment of the price based in the absence of inscription (unless it was agreed expressly that should be inscribed), since not inscription does not justify the fear of perturbation in the possession or the domain.

 Since I have already said, and this is essential, the private contract of Purchase does not transfer itself the domain: it is necessary to prove the delivery of the possession.

 Effects of the Purchase formalized in public document

 In the Purchase realized by means of public Deed, the granting of this one is equivalent to the delivery of the Real Estate object of the contract (unless in the proper Deed it is agreed the opposite).

 The Purchase Title Deed allows also the access of the conveyance to the Property Registry and, once inscribed, produces the following effects:

 It has efficacy opposite to everybody with regard to the date and to the fact of his granting.

1. It prevents the inscription of another right of equal or previous date that could be opposed or incompatibly to the title.
2. Third bona fide that acquires of whom in the Property Registry appears with faculties to transmit the real estate, is supported by the law in his acquisition, although later it is annulled or void the right of the grantor, for causes that do not appear registered.
3. The Law presumes, except documentary evidence against, that the one, who has the inscribed domain of a Real Estate, has its possession.
4. The inscription allows the possible buyer to know the state of the Real Estate that he intends to acquire and the limitations or conditions imposed on the property, circumstances that can determine his decision of buy.

 The intervention of the notary in the Purchase guarantees also its legality. The notary draw up the Deed bearing in mind the common will of the grantors, and informs them about the scope and effects of its content. 

 If, for any reasons, the Purchase granted in public document does not have access to the Property Registry, the Deed does not lose validity. But it’s convenient to correct any legal defect that the registrar of the property indicates, since as soon as the Purchase was inscribed, the guarantees of legality are absolute.