Catalonia creates a register of large holders to regulate properties, strengthen tenants' rights, and confront real estate speculation. Complexity arises in sales transactions.
New register of large holders in Catalonia: Implications and challenges for the real estate sector
Catalonia has taken a significant step in the legislative realm with the creation of a new register of large holders, a measure aimed at regulating and controlling property ownership in the hands of entities and large investors. This development, in the context of housing access and the rights of pre-emption and retraction, has the potential to change the real estate landscape in the region. In this article, we will explore the details of this new legislation, its implications, and the challenges it presents for ongoing sales transactions.
Context of the legislation
The creation of the register of large holders in Catalonia is a response to the growing social concern about real estate speculation and housing access. This measure is part of a series of initiatives by the Catalan government to ensure greater protection for tenants and to ensure that the housing supply meets the needs of the population.
Large holders are defined as individuals or legal entities that own more than ten properties or have in their possession a surface area of more than 1,500 m² of property. Registration in this register means that large holders must comply with a series of obligations, including transparent information about their properties and rental practices, as well as respect for tenants' rights.
Rights of pre-emption and retraction
One of the most relevant aspects of this new regulation is the reactivation of pre-emption and retraction rights. These rights grant tenants and public administrations the ability to acquire a property before a third party when it is put up for sale. This measure is aimed at protecting tenants from speculation and facilitating housing access for the most vulnerable population.
The right of pre-emption allows tenants or public administrations to make an offer for the property at the price offered to a potential buyer. If the owner accepts that offer, tenants or the administration become the new owners. The right of retraction allows reacquiring the property in case it has already been sold to another buyer.
Implications of the new law
The implementation of the register of large holders and the modification of pre-emption and retraction rights introduces a new legislative scenario that all market actors must consider. For large holders, the need to register may entail an increase in bureaucracy and the auditability of their transactions. In turn, this could impact the perception that potential tenants and buyers have of these entities, favoring those that adhere to more responsible and transparent practices.
For buyers and tenants, this legislation offers certain guarantees and benefits, as it provides them with additional tools to protect their rights. However, the buying-selling process becomes more complicated as new procedures must be followed to comply with the regulation.
Problems in ongoing sales transactions
One of the most significant challenges posed by this new law is the ongoing sales transactions when the regulation comes into effect. The parties involved in these transactions will need to adapt to the new regulatory reality, which can cause confusion and delays.
For example, if a property is in the process of being sold and the buyer has already agreed to the terms with the seller, the entry into force of the regulation may allow a tenant with pre-emption rights to act to acquire the property. This can lead to complicated situations, where the seller and the original buyer must be willing to deal with the new regulation in their closing process. The respective negotiation process between the parties may be complex and, at times, unsustainable.
Entities and professionals in the real estate sector, such as real estate agents and lawyers, must be prepared to advise their clients on this new legislation and its impacts. In addition, they must ensure that all new obligations are met to protect both buyers and tenants, and even the sellers themselves.
Final considerations
The creation of the register of large holders in Catalonia and the reactivation of pre-emption and retraction rights represent an important step towards greater transparency and accountability in the real estate sector. However, it also involves a series of challenges for both large holders and buyers and sellers in the market.
It is essential that all actors involved in the real estate sector are aware of the new regulations and adapt to the changing conditions. Proper legal advice, as well as market knowledge, will be