ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós, Cases Lacambra
2.2 Laws Applicable to Transfer of Title Titles are transmitted by the so-called theory of the “title and mode”. This theory is a system of transmis - sion of ownership that requires the conclusion of an agreement, the subsequent delivery of the real estate to be transmitted (similar to the US common law doc - trines of merger or acceptance of title upon deliver - ance), and proof before a public notary, without any aspect being enough separately. Depending on the activity to be carried out with the real estate, attention should be paid to administrative regulations. Based on the specific economic sector (residential, industrial, offices, retail and hotels), dif - ferent types of real estate would have specific regula - tions, but the theory of the title and mode would apply to any sector. 2.3 Effecting Lawful and Proper Transfer of Title The lawful and proper transfer of title to real estate occurs when the conclusion of an agreement and the subsequent delivery of the real estate has been made before a public notary. There is no land registry in Andorra, but each town hall has its own real estate registry for tax purposes. The transfer of title is record - ed in the Andorran chamber of notaries. The public notaries record all the public deeds granted in refer - ence to a real estate, including the encumbrances, modifications and other duly recorded vicissitudes of the real estate. Title insurance is not used in Andorra. 2.4 Real Estate Due Diligence Buyers usually carry out due diligence on a real estate property, undertaking an exhaustive investigation of the ownership and main characteristics of the real estate. The red flag aspects to analyse are the fol - lowing: • titles and encumbrances; • the rights of third parties over the real estate, eg, if there are lease rights, if they are subject to a specific licence, if the real estate is subject to any tax, or if there is some kind of foreclosure on the real estate; • whether there is any debt involved in the case of condominiums; and
nullity of both the investment and the entity through which it was conducted. 1.3 Proposals for Reform The Andorran government is working on a law propos - al to modify the current regulations regarding urban planning and development to substitute the current Act and adapt it to the actual circumstances of the country and the sector. The actual regulation is from the early 2000s. The right of property can be understood as a full right or a limited right. In Andorra, the right of property understood as a full right could be: • an absolute freehold, permanent and absolute ten - ure of land or property, with the freedom to dispose of it at will; • a co-ownership, which is the right owned by more than one person over real estate; or • in a condominium ( propietat horitzontal ), the ownership of common premises is shared by the plurality of owners of each unit that makes up the apartments. 2. Sale and Purchase 2.1 Categories of Property Rights On the other hand, the property right could be under - stood as a limited right. Therefore, in Andorran law, the following rights are recognised as limited property rights: • leasehold, which is the temporary right that includes the ability to build on the ground or in the subsoil, and the right to overhang, with the right to appropriate what has been built for a specific period; • beneficial interest, which is the right by which a person can use the property of another and enjoy its benefits, with the obligation to preserve and take care of it; and • emphyteutic lease, which is the right by which the useful domain of a real estate property is given for a period by the payment of an annual pension, whereby the assignment is made as recognition of the useful domain of the property.
15 CHAMBERS.COM
Powered by FlippingBook