Remedial Action for Eviction: What It Is, Examples, and When It Applies

Before finalizing any transaction, you should understand what " compensation for eviction" is—a right for the buyer and an obligation for the seller. It is a legal concept designed to protect any agreement involving the transfer of ownership of property.

The right to compensation for any defects in the item, or to ensure its undisturbed use, is a right of the buyer. For their part, the seller is legally obligated to deliver the item in accordance with the agreed-upon terms, and both parties must be aware of this.

What does "compensation for eviction" mean?

According to the Federal Civil Code, redress for eviction means that the seller of a property is liable for any eviction suffered. Of course, the eviction must be suffered by the buyer, who is deprived of all or part of the acquired property due to any circumstance or by a third party.

In Spain, indemnification in the event of eviction is considered a standard clause in any negotiation, particularly in sales transactions involving the transfer of ownership. In other words, even if the parties do NOT include any provisions regarding eviction, it is presumed to be the seller’s responsibility.

However, we should clarify that this obligation may also be waived; in other words, it is a provision that allows for a contrary agreement. This occurs in certain cases where the buyer expressly waives their right to remedy in the event of eviction, but is unaware of any latent defect.

In this case, it is presumed that the seller acted in bad faith, and the seller will immediately be required to remedy the defect as soon as possible. Thus, any waiver of the right to remedy shall be deemed not to have been agreed upon, and the seller may be required to exercise this right in order to refund the full purchase price received.

How does it work?

Remedial relief through eviction applies in sales transactions and is available when the following conditions are met:

Deprivation of possession

In this case, the buyer is wholly or partially deprived of the use of the purchased item.

Final judgment

In some cases, the deprivation may result from a final judgment that recognizes a third party’s prior preferential right to the property.

Valid sales contract

This applies provided that a valid sales contract between the buyer and the seller was in place prior to the new negotiation.

Notification to the seller

Under these circumstances, the buyer is required to notify the seller of any claim that could result in eviction. In any case, the buyer always has the right to demand legal remedies, and these provisions apply to the purchase of any property.

How many types of eviction are there?

In Spain, there are two types of eviction, namely:

Complete eviction

This occurs when the buyer loses full control or possession of the item sold and may sue the seller for the deprivation of their rights. In other words, the seller is obligated to pay the price received, plus interest, any legal costs, rent, etc.

Partial eviction

This situation arises when the foreclosure is partial, meaning that the buyer does not lose the entire property sold, but only a portion of it. For example, in the sale of an assembly plant whose machinery is collateral for a loan, the buyer retains the plant but loses the equipment.

In both cases, the seller is immediately entitled to compensation from the buyer, who must refund the full purchase price received. It is important to note that this warranty applies even if the parties did not include it in their sales agreement.

When does eviction apply?

In Spain, eviction applies when any of the following conditions are met:

When the buyer is unable to take possession

We are referring to a situation where you have full or partial ownership of a property you have recently acquired, and a third party claims a superior right to it. This interference with your property rights is a prerequisite for the defense of eviction to apply.

When a final judgment has been issued

In such cases, a court has ruled in favor of a third party who is presumed to have demonstrated a stronger claim to the property in dispute. This is presumed to have been preceded by legal proceedings initiated by a party seeking to establish their claim to the property.

Pursuant to a right existing prior to the purchase

It may or may not be accompanied by a final court ruling, given that a third party claims to have a prior right of first refusal. This occurs when the seller has already sold the property prior to the new transaction, which could imply bad faith on the part of the seller.

What requirements must be met in order to seek relief from eviction?

Since this is a legal concept that is presumed to be implicit in all negotiations—especially those involving the sale of property—the buyer has the right to demand it. However, in order to claim relief from eviction, the following conditions must be met:

• The buyer is wholly or partially deprived of the property they have just purchased.
• The deprivation of this right must result from a final judgment upholding the claim of the third-party plaintiff.
• The right of eviction must be based on a right that existed prior to the execution of the sales contract.

Who is liable for eviction?

Remedial action for defects arising from eviction is an obligation that always rests with the seller and is the seller’s sole responsibility. The seller is the only party obligated to take remedial action, provided that the seller demands it.

When does the statute of limitations for eviction expire?

The statute of limitations for claiming restitution due to eviction expires after 15 years, as provided in Article 1964 of the Spanish Civil Code. This period begins to run from the moment the buyer suffers eviction or loses the purchased property.

After this period, no legal claims may be filed, as this is a legal requirement to which the contracting parties must adhere. This is something that should be kept in mind, especially by those engaged in a purchase and sale negotiation.

Difference between relief from eviction and relief for latent defects

The difference between these two legal concepts lies in the fact that the remedy for eviction guarantees the buyer that they will not be deprived of their property. On the other hand, latent defects may refer to non-apparent damage to the property that affects its functionality or value.

It is worth noting that defects are a kind of imperfection or damage, but they can also refer to an alteration in the quality or characteristics of the item. Here, we must exclude any defects that can be identified during a routine inspection prior to delivery of the item.

We should also consider the buyer’s level of expertise; for example, if the buyer is an expert or a mechanic and fails to detect the latent defect. In such cases, it is assumed that the buyer should have foreseen the damage given their expertise, and therefore the seller may not be liable for the damage.

Example of adjustment for eviction

A classic example of rescission due to misrepresentation can occur when purchasing a property, if something previously unknown comes to light after the purchase. For instance, the seller may not have had a clear title to the property due to a mortgage they failed to disclose.

This, of course, results in the buyer’s immediate loss of the property, thereby constituting a case of rescission due to eviction. In such a case, the seller is obligated to refund the full purchase price received for the property, at least until the mortgage is paid off.

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Conclusion

In Spain, any real estate transaction is legally protected and guaranteed by the legal concept of relief from eviction. This right protects the buyer from any interference with their legitimate right to ownership, as they are considered a buyer acting in good faith.

However, it is important to note that the buyer may eventually waive this legal protection, leaving themselves at the mercy of the seller. This waiver, of course, has an exception, and applies when the seller’s bad faith is proven after the transaction has been finalized.

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