Most people have a basic idea of what the Land Registry is and what its function is. In brief, it is a file that shows who owns a property and what charges are encumbered on it. Although this is true, there are more things that are registered in the Land Registry, such as a brief description of the relevant property.
Ideally, the information recorded in relation to a property should be completely accurate. But this is not always the case. There are often discrepancies between the description of a property in the Land Registry and its physical reality. And this situation is more complicated than it may seem.
I would like to clarify that the existence of these discrepancies does not imply any type of sanction. The registration at the Land Registry is purely voluntary. Registering gives certain advantages (explaining the advantages deserves another article), but there is no sanction for those who do not register. Although there are various measures which seek to ensure consistency between the Land Registry and the Cadastre, the ultimate aim of these is to reduce the confusion between properties.
Where a problem can arise is when a property is to be mortgaged and its description in the Land Registry does not match with reality. In the event of foreclosure, the creditor may have problems recovering his credit if the registry information is not accurate. By way of example, imagine the auction of a property that according to the Registry is a plot of land, but actually there is a building constructed on that plot of land. The bids are likely to be made for the value of the plot of land, not for the existing building, and it would be harder for the creditor to recover his money.
The Mortgage Act itself establishes the mechanism for correcting the description of the property. The procedure to be followed depends on the specific modification that it wants to be made. The first alternative is to incorporate the surface area and/or cadastral boundaries of the property into the Land Registry. The second is to promote a dossier to correct the description. This dossier is not necessary if the correction does not affect the boundaries or surface area of the property. In any case, the procedure must be initiated by means of a public deed.
Various problems arise from the regulation to correct the description of the property. One of them is the lack of clarity. It introduces concepts without explaining in a clear way what it exactly refers to, giving rise to interpretative difficulties. These are processes written by and for experts, but they can be difficult to interpret for laypersons in the field.
Another problem is that in some cases the indirect taxation of these amendments is not entirely clear since, as they have to be carried out by means of a public deed, they could be subject to Property Transfer Tax and Stamp Duty Tax. There are various cases in which it is not clear whether this deed of amendment would be subject or not.
There is no doubt that it is necessary for public registers, due to their function, to contain the most accurate information as possible. And it is also necessary for the citizens to be able to modify this information to bring it into line with reality. But to make this more accessible, the procedures for regularizing the registers should be simplified. Otherwise, there may be a discourage to change the information in the registers to make it true and accurate.
