When purchasing any property on Ibiza, the buyer should thoroughly review the property’s complete legal status. If the property for sale is rented, this does not preclude the purchase, but caution is advised. The tenant may have a right of first refusal (right of pre-emption), and could thus prevent the property from being sold.
Spanish law distinguishes between two types of pre-emptive rights: contractual and statutory. Contractually stipulated pre-emption rights are generally not problematic, as they have been mutually agreed upon between the parties, and they can also be registered in the land register. Examples include a neighbour who secures a right of first refusal in the event of a sale, or a tenant who wishes to reserve the right to purchase the rented property at some point in the future.
Much more complicated and perilous are the statutory pre-emption rights, because the parties involved may be not be familiar with the Spanish terms “derechos de tanteo y retracto.” The word “tanteo” means the right of pre-emption before the contract for sale of the property is concluded. The word “retracto” refers to a situation where the holder of pre-emption rights steps in after a contract has already been executed with a purchaser, because the holder’s existing pre-emption right was disregarded. However, this right also obligates the holder of pre-emption to reimburse the purchase price paid, including any transaction costs, to the buyer, who generally acted in good faith.
The Spanish Civil Code (“codigo civil”) only regulates the following two cases of pre-emption rights: First, the pre-emption right of a co-owner (“comunero”). If a property is owned by several people in the form of non-material shares (“indiviso”) and one of these co-owners wishes to sell, they must first offer their share to their fellow co-owners. The classic case, of course, is the case of community of heirs; therefore, none of the co-heirs can simply sell their share to a third party.
The other pre-emption right that the Codigo Civil regulates are those of a neighbour in rural areas (suelo rustico). However, this only applies if the property in question for sale is smaller than 10,000 m², and is not separated from the neighbours by a natural boundary (ravine, river, paths) or easements. If these conditions are met, the pre-emption holder can assert their claim to take over the contract within nine days of the unauthorized acquisition being registered in the land register. Caution: This is a very short period of time!
The most important pre-emption right mentioned above is found in the Spanish Tenancy Act (“Ley de Arrendamientos Urbano”). Article 25 of that law grants the tenant a priority right to acquire the rented property in the event of a sale. In this case, the owner must notify the tenant of their intention to sell through a notary public. The tenant then has 30 days to exercise their pre-emption right.
In practice, the buyer will protect themselves by requiring the tenant to waive their pre-emption right in a notarized declaration before signing the purchase agreement with the seller. Such an exclusion of the pre-emption right can also be stipulated in the rental agreement. However, to be on the safe side, it is advisable to request this notarized waiver from the tenant.
The government also has certain pre-emption rights, including those listed in the Nature Conservation Report. In Ibiza, the Insular Council can enforce a pre-emption right in nature reserves such as Ses Salinas. Pre-emption rights are often not obvious to property buyers without legal knowledge, but they can have serious consequences in a real estate transaction.
We therefore recommend legal advice for both the buyer and, in particular, the property seller, who could suffer significant damages if the pre-emption right is not adequately observed and eliminated in a timely manner.
