Hidden defects, double sales and fraud: your remedies

Terms used

• Vicios ocultos — Vicios ocultos are serious defects in a property that you could not see when you bought it.
• Burofax — A burofax is a registered letter that proves what it said and when it was sent.
• Arras — Arras are a deposit paid to secure a purchase; in the penitential type, either side can withdraw by losing or doubling it.
• Estafa — Estafa is the crime of fraud, where someone deceives you to take your money or property.
• Anotación preventiva de demanda — An anotación preventiva de demanda is a Registry notice warning later buyers that a court claim over the property is pending.

Key rules

• Hidden defects: Claim within six months of delivery, and pick between cancelling the sale and a lower price.
• No-warranty clause: It does not protect a seller who knew about the defects and hid them.
• Double sale: The buyer who first registers in good faith generally wins, so register at once.
• Formal demand: Send a burofax before asking a court to terminate the contract.
• Fraud: You can go civil, criminal or both, and you can ask for a Registry notice to block a resale.

Match the problem to the claim

Each problem has its own claim and its own clock. Pick the one that fits, and act quickly, because the shortest limit is six months.

The decision, timeline and warnings below the text help you choose and plan. A lawyer who handles property disputes should check your case before you file anything.

Hidden defects (vicios ocultos)

You have six months from delivery to claim for hidden defects in a resale property. New-build homes are covered by separate building guarantees, not by this claim.

A defect counts only if it is hidden, serious and already there at the sale. It must make the property unfit for use or clearly reduce its use.

You choose between two claims:

• Cancel the sale (acción redhibitoria). You return the property and get back the price and your expenses.
• Keep the property and get a lower price (acción quanti minoris). The reduction is proportional to the defect.

If the seller knew about the defects and hid them, you can also claim damages.

A "sold with no warranty" clause only protects a seller who did not know about the defects. It does not protect a seller who acted in bad faith.

Seller breach, or a property that is wholly different

You can terminate the contract if the seller seriously breaks an essential obligation. Examples are not delivering, not signing the deed, or title defects and charges. You must have kept your side of the deal, or be ready to.

You can ask the court to terminate the contract or to force the seller to perform. Either way you can claim damages and interest. If the court ends the contract, each side returns what it received. If you paid penitential arras (a deposit that lets either side withdraw) and the seller withdraws, the seller returns double.

Send a formal demand first, by burofax (a registered letter that proves its content). The court may give the seller a grace period. The limit is five years.

If the property is wholly different from what you bought, or unfit for its purpose, courts treat this as non-performance. You use the same termination claim. The time limit is longer than six months, so a late discovery does not automatically kill it.

Double sale

If the seller sold the same property to two buyers, ownership goes to the first of these:

1. The buyer who registered first, in good faith, in the Property Registry.
2. If neither registered, the first buyer to take possession in good faith.
3. If neither registered nor took possession, the buyer with the oldest title, if it was in good faith.

A good-faith buyer who registers is also protected against third parties. So register your purchase quickly.

The buyer who loses can claim damages and the return of their money from the seller.

Fraud

You have two routes, and you can use both.

• Civil. Ask the court of first instance where the property is to annul the contract for fraud (dolo) or error, plus damages. You have four years from the day you discover the problem.
• Criminal. File a complaint for fraud (estafa) with the police, the prosecutor or the investigating court. The limit is generally five years, and up to ten for aggravated cases. The criminal court can order the money returned.

A criminal complaint can pause the civil case. Decide the order with your lawyer.

To stop a fraudulent seller reselling, ask the court for a notice on the Registry entry (anotación preventiva de demanda). It warns later buyers that a claim is pending.

Choosing between options

Which remedy fits the problem you have with your purchase?

• Cancel the sale for a hidden defect: The defect was hidden, serious and already there at sale, and you want the price and your expenses back. You must claim within six months of delivery.

• Keep the property and ask for a lower price: The same kind of hidden defect, but you want to keep the property and get a proportional reduction in the price. The six-month limit from delivery also applies.

• Terminate the contract for seller breach: The seller seriously failed an essential duty, such as not delivering, not signing the deed, or hiding title problems or charges, and you have done your part or are ready to. You can choose to terminate or to force performance, with damages either way, within five years.

• Claim that the property is wholly different or unfit: What you received is completely different from what you bought or cannot be used for its purpose. It is treated as the seller failing to perform, so you can terminate and the six-month limit does not apply.

• Claim in a double sale: The seller sold the same property to two buyers. The property goes to the buyer who first registered in good faith; if neither registered, to the first to take possession in good faith; if neither, to the buyer with the oldest good-faith title.

• Annul the contract for fraud or go criminal: You were deceived into buying. You can sue to annul the contract and claim damages within four years of discovery, and you can also file a criminal complaint for estafa.

Start with what went wrong: a hidden defect points to cancelling or a price reduction within six months, a seller who did not perform points to termination, a second buyer points to who registered first, and deception points to annulment or a criminal complaint.

Timeline and deadlines

• Claim for a hidden defect: cancel the sale or ask for a price reduction: within six months of delivery of the property

• Claim that the property delivered is wholly different or unfit, or that the seller breached the contract: within five years of the date you could first bring the claim

• Send a formal demand (burofax, a registered letter with proof of its content) before asking a court to terminate for breach: before you go to court, as soon as the breach is clear

• Civil claim to annul the contract for fraud or error: within four years of discovering the fraud or error

• Ask the court for a notice on the Registry entry: when you file your civil claim, to protect against a resale

• Criminal complaint for fraud (estafa): generally within five years, and up to ten years in the most serious cases

What to watch out for

• The hidden-defect clock starts at delivery: The claim for a hidden defect must be brought within six months of delivery, so a defect you find late can leave you without that claim. Inspect the property carefully right after you receive the keys, get a technical report on any defect, and speak to a lawyer straight away.

• A no-warranty clause can block your claim: If the contract says the property is sold as seen, you cannot claim for defects the seller did not know about. Look for proof that the seller knew and hid the defect. If they did, the clause does not protect them and you can also claim damages.

• A fraudulent seller may resell the property: If you suspect fraud, the seller can sell on the property to someone else while your case runs, and you could be left chasing money. Ask the court for a notice on the Property Registry entry when you file, and consider a criminal complaint for estafa (fraud) with the police, the prosecutor or the investigating court.

Frequently asked questions

Can I still claim a hidden defect if the contract says the property is sold with no warranty?

Yes, you can still claim if the seller knew about the defect and hid it, because a no-warranty clause only protects a seller who was unaware of it. If the seller did not know, the clause is valid and blocks the claim. Gather anything showing the seller knew, such as earlier repair invoices or messages.

Can I claim after six months if the property is completely different from what I bought?

Yes, if the property delivered is wholly different or unfit for its purpose, the claim is treated as the seller failing to perform the contract, so the six months does not apply. The general five-year limit applies instead, counted from when you could first bring the claim. You can then ask to terminate the contract.

Can I stop a seller from reselling the property while my fraud case is running?

Yes, when you file your civil claim you can ask for a notice on the Property Registry entry (anotación preventiva de demanda). It warns any later buyer that the property is in dispute, which protects you against a resale.

What happens to my civil claim if I also file a criminal complaint for fraud?

A criminal complaint can pause your civil case until the criminal case is decided. The criminal court can also order the seller to return what you paid. Talk to a lawyer about which route to start first.