Moreover, the public deed of sale also provides a detailed description of the property and its registration status. It also provides assurance that the buyer is eligible to buy, and will indicate whether the property is free of liens and encumbrances. This information will be included in a nota simple (non-certified copy), which the notary will request in advance from the Land Registry (Registro de la Propiedad) and which will be attached to the deed.
Once it has been verified that the property is free of encumbrances, the notary certifies transfer of ownership from seller to buyer. The relevant documents are then filed at the registry to change the ownership.
Is it mandatory to sign this public document?
The short answer is no. While it is possible to complete the purchase and sale in a private contract without putting it on public record, it is not recommended. Spanish law provides for freedom of form in the execution of contracts. However, there can be problems if disputes arise over the ownership of the property or the existence of any encumbrances after signing, as a private contract is not binding. If, for instance, the buyer wants to sign a public deed after a private contract has been signed and the seller refuses, the buyer should be very wary.
What are the differences between a private and a public document?
First of all, a public instrument is binding, as it has been ratified before a notary, meaning a public official who has the power to attest to the facts that he or she signs (in this case, to the identity and capacity of both buyer and seller, and to the lawfulness of the information contained in the document). Furthermore, filing the instrument at the Land Registry gives it legal force vis-à-vis third parties, and puts it on public record (i.e. making the information available to the public).
Meanwhile, a private contract cannot be filed at the Land Registry. Therefore, it is not binding and has no probative value because no notary has attested to its content. If there is a problem over ownership, we can go directly to court without having to seek a declaratory judgement first.