Article 28 Mortgage Law abolished

Since September 2021, heirs have gained the right to sell inherited real estate without the mandatory two-year waiting period that was previously required by mortgage law.

On June 2, 2021, the Spanish government issued a decree abolishing the controversial Article 28 of the Mortgage Law (artículo 28 de la Ley Hipotecaria). As of September 3, 2021, this article became null and void. The so-called “Cuba Law” (Ley de Cuba) prohibited heirs from selling property directly until two years had elapsed — a problem that unfortunately worsened due to the pandemic, according to the Fotocasa report “Housing inheritance during the pandemic.”

What did Article 28 of the Mortgage Law state?

Article 28 of the Mortgage Law (artículo 28 de la Ley Hipotecaria) established: “Registrations of real estate or real rights acquired by inheritance or bequest shall have no effect against third parties for two years from the date of death of the testator.”

In practice, this meant the following: when real estate was inherited by someone who was not a direct relative (i.e., not a child, parent, or spouse), it could not be transferred to the new owner for two years — in case a forced heir (such as an unrecognized child) appeared, who would automatically become the owner by law.

How did Article 28 affect heirs and buyers?

Due to this article, if real estate was sold with this restriction, the new owner risked losing the property to the legal heir, while the obligation to pay the mortgage remained.

Banks were reluctant to grant mortgage loans in such cases, which further complicated obtaining financing. A buyer of inherited property could lose ownership but would still be obligated to pay the mortgage.

From the heir’s perspective, the situation was no better: they could not sell the property for two years after the death of the previous owner. If there was a need to sell before this period, they had to agree to a below-market price due to the risks associated with the restriction.

What does the abolition of this Mortgage Law article mean?

The abolition of Article 28 of the Mortgage Law (Ley Hipotecaria) allows for the removal of restrictions on all real estate that was subject to this regulation. Any inherited property (regardless of the degree of kinship of the heir) can now be registered in the Property Registry (Registro de la Propiedad) to the new owner without a waiting period and sold without restrictions.

Additionally, buyers who purchased such real estate and were in the “two-year waiting period” are released from it and can register property rights without any obstacles.

Although Article 28 was controversial and criticized during the mortgage law reform in 2019, it was not abolished. The pandemic played a decisive role in making this decision. According to the Fotocasa report “Housing inheritance during the pandemic,” the number of housing inheritances in the country increased significantly over the past year.

The share of heirs among property sellers was 23% of the total in 2021. Meanwhile, heirs who rent out properties comprised 9.8% of all landlords.

Historical context

Article 28 of the Mortgage Law becomes clearer in historical context. It was written in 1946 — less than 50 years after Cuba gained independence from Spain.

75 years ago, this regulation made sense: it gave descendants of Spaniards who had emigrated to other countries (especially to former colonies) time to receive news of a relative’s death and come to Spain to claim their inheritance.