If you economically cancel your mortgage with the bank but never inform the Land Registry, the mortgage will still be registered against the property. If you decide to sell your property, the buyer will find out that there is a mortgage against the property and he/she can reject the sale. Even if you tell the buyer that your mortgage is cancelled, he/she probably will not buy a property with a mortgage against it.
Land Registry will issue a Note (Nota Simple) which is the proof of ownership. Moreover, it also notify about the charges (i.e.: mortgages) and foreclosures and embargos (i.e.: mortgage arrears, Council Tax debts (IBI)) that the property keeps.
If you would like to sell your property free of charges it is important to clear the mortgage at the Land Registry.
The process will require some steps:
Preliminary: If you do not have economically cancel the mortgage, and you have to transfer the money to clear the mortgage debt, the bank will require some documentation. Due to the Anti Money Laundering Law (you can read more about this law through: https://www.reuterssolicitors.com/antimoney-laundering/), it is necessary to prove the origin of the funds (i.e.: bank statements, ownership certificates, selling deeds, heritage,…).The bank will inform you about the documentation you need to provide first thing first.
Once this step has been done, you need to follow the steps below.
First: You need to contact the branch of the bank and formally ask for the cancellation of the mortgage at the Land Registry. It is better to do it in writing addressed to the head manager of the bank.
Second: The bank manager will prepare the cancellation deeds together with the Notary and they will make the appointment.
It is important to highlight the fact that you can be penalized by the bank for the cancellation. When you sign the mortgage deeds, it is common to agree some charges and expenses connected with the cancellation of the mortgage. For this reason, it is important to ask the bank for the cost of the charges related the cancellation before proceeding. Moreover, you will also pay the cancellation deeds at the Spanish Notary and the cost of the registration at the Land Registry.
Third: Once the notary signs the mortgage cancellation deeds, you will be able to pay the notary and collect the original deeds. In order to submit the deeds at the Land Registry, you need to fill a form (Modelo 600) and submit the original deeds and the form to the Land Registry. Once the Land Registry has registered the deeds, they will contact you. They will inform you about the cost of the registration and when you can collect the original deeds for your records.
In order to avoid any future problem, it is convenient to hire the services of a lawyer. You can contact Reuters Solicitors for a budget.
My wife & I bought a property in Paguera in 1994 with a 10 year mortgage with Sa Nostra. The mortgage was paid off in 2004 and Sa Nostra told us that we could obtain the property deeds from them at any time in the future. We now wish to obtain those deeds as we plan to sell the property. Sa Nostra has in the meantime been taken over by BMN and more recently Caixa bank. We approached Caixa bank at the same office at which Sa Nostra had granted the mortgage but they were unhelpful and directed us to Caixa main office.Having e-mailed the head office many times since Dec 2021, the only response which I have been able to get is that they no longer have any documentation concerning our mortgage, as by law they are not required to keep them after a certain amount of time, and they offer no solution as to how the property deed can be obtained and the land registry records updated to show that there is no longer a mortgage on the property. So the question is : What do we do now ?
Dear Michael,
Thank you for contacting Reuters Solicitors. It will be a pleasure to assist you with this matter.
We have just sent you a private email with relevant information about the process. Please check your emails (and spam box).
Regards