The resolution of the Directorate General of Registries and Notaries (“DGRN” – Dirección General de los Registros y del Notariado) of 20th May 2019, published in the Official Gazette on 10th June 2019, analysed the case where a unilateral mortgage was granted by a company in favour of the Spanish Tax Agency (“AEAT” – Agencia Estatal de la Administración Tributaria) as a guarantee for the payment of a tax debt.
This resolution was based upon the facts and legal grounds set forth below:
I. Facts:
- By virtue of the public deed dated 29th November 2018 a limited liability company constituted two unilateral mortgages on a certain property in favour of the Spanish Tax Agency, as a guarantee of the payment of a tax debt.
- On 30th November 2018 the mortgagor filed, by electronic means, an authorised copy of the public deed with the land registry; on the 11th December 2018 a first copy in paper format was filed; and on 2nd January 2019 an electronic copy was filed, in order to incorporate the valuation certificate regarding the mortgaged property.
- On 21st January 2019 the Registrar issued a decision, according to which:
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- Two unilateral mortgage rights of an equal status were registered in favour of the State over the registered property.
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- Registration was suspended with regard to the valuation of the mortgaged property and the starting bid fixed for the auction given that the valuation certificate provided by the mortgagor company had expired (on the date of granting the public deed).
- The company appealed against the negative decision on the understanding that:
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- The creditor had consented to: (a) the acceptance of the mortgage prior to the date of expiry of the valuation certificate, although a term had been conceded to the mortgager for the constitution of the mortgage after such date; (b) the valuation of the property and the starting bid for the auction;
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- These circumstances were not applicable to the obligation of acceptance of the creditor, imposed by article 3bis of Law 2/1981, of 25th March, regulating the mortgage market;
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- On the date of granting the public deed the term of 6 months established in Order ECO/805/2003 had not yet elapsed.
II. Legal grounds:
- The appeal was admitted for processing, since, in spite of not having provided an authorised copy or certified copy of the assessed notarial deed, as required by the Registrar, at the time an authorised copy, with equal legal value, was filed by electronic means, so that the examining registrar had access to said document.
- Regarding the registration of a starting bid for auction when the appraisal certificate has expired, the DGRN understood that:
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- A priori, appraisals based on expired certificates cannot be registered, and the date of filing of the public document should be considered dies ad quem.
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- However, when dealing with a mortgage in favour of a public body, if it is possible to demonstrate with a certificate issued by said public body that the file containing said valuation had been approved before the expiration date of the valuation certificate, it may be deemed that the valuation certificate had not indeed expired.
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- The registration of the unilateral mortgage without the valuation certificate was correct since mortgages in favour of the AEAT in guarantee of a tax debt do not require the valuation for auction carried out by an approved entity established in article 682.2.1 of the Civil Procedure Law (“LEC” – Ley de Enjuiciamiento Civil).
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- In the event that the public deed of constitution of the mortgage included an expired valuation, the public deed could be dismissed and the valuation rejected, without the need for the express request from the creditor. Such a request would be necessary in the case of an ordinary mortgage.
Therefore, the existence of the appraisal value in the registration of the mortgage lacks the registry validity and effectiveness indicated in articles 670 and 671 of the LEC because the specific administrative enforcement procedure does not call for the starting bid for auction to be a constitutive requirement and its existence does not have determining legal effects.
Consequently, the DGRN dismissed the appeal and confirmed the Registrar’s decision.
Mireia Bosch
Vilá Abogados
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18th March 2022