Shared ownership and temporal ownership in Catalan law
| Author | Héctor Simón Moreno, Núria Lambea Llop, Rosa Maria Garcia Teruel |
| Position | Department of Private, Procedural and Tax law, UNESCO Housing Chair, Universitat Rovira i Virgili, Tarragona, Spain |
| Pages | 63-78 |
Shared ownership and temporal
ownership in Catalan law
Héctor Simón Moreno, Núria Lambea Llop and
Rosa Maria Garcia Teruel
Department of Private, Procedural and Tax law, UNESCO Housing Chair,
Universitat Rovira i Virgili, Tarragona, Spain
Abstract
Purpose –The global economic crisis and the housing bubble meltdown have had a signicant impact on
the Spanish property market. As a result, the homeownership–tenancy dichotomy has become a matter of
discussion, and efforts are made to discover formulas that provide affordable, stable and exible housing
access. Taking this background into account, the Catalan lawmaker has implemented the so-called
“intermediate tenures” (temporal ownership and shared ownership) into the Catalan Civil Code, which are
conceived as a middle ground between ownership and renting. This paper aims to explores how these
“intermediate tenures” work.
Design/methodology/approach –These tenures are conceived as a middle ground between ownership
and renting and may be used for a variety of purposes. As the Catalan lawmaker has fragmented the right of
ownership on the basis of English law, which is a great breakthrough regarding the long-standing conception
of the right of ownership in continental legal systems, the paper explores how these “intermediate tenures”
work, as regulated in Act 19/2015, in a comparative perspective.
Findings –The paper offers an overview of how these “intermediate tenures” are regulated and which are
the problems arising from legislation and the potential uses.
Originality/value –As the temporal ownership confers on the titleholder the domain of an asset for a
specically dened period of time, it does not conform to the right of ownership as it is currently conceived in
continental European legal systems, given that it is based on the English leasehold; shared ownership confers
on the buyer a property share in the thing, entitling him to the full possession, use and exclusive enjoyment of
the thing and to gradually acquire the remaining share. Both are based on the English shared ownership
scheme and leasehold, and are legal transplants worth to be analysed.
Keywords Ownership, Temporal, Catalonia, Intermediate, Shared, Tenures
Paper type Research paper
1. Introduction
Homeownership and tenancy are by far the most conventional land tenures in Spain (the
former is widespread – 78.2 per cent, whereas the latter seems to play a minor role – it
accounts for 21.8 per cent; Eurostat, 2016[1] However, this dichotomy has been called
into question in Spain because of the international economic crisis and the bursting of
the Spanish housing bubble (2000-2007), which has had a signicant impact on the
Spanish property market, leading to (Nasarre-Aznar, 2011,in toto;Vinuesa Angulo,
2013,in toto;Gentier, 2012, pp. 342 ff.) a sizeable drop in housing prices (more than 40 per
cent since 2007[2.]); a sharp reduction in the number of mortgage loans granted[3]; a
gradual increase in the number of evictions[4] (as a result of massive unemployment[5];
and high levels of household over-indebtedness, Banco de España, 2013[6]); vacant
dwellings (Spanish National Statistics Institute, 2013)[7]; increasing poverty rate and
social exclusion (FOESSA, 2014); and increased difculties for vulnerable groups, such
as children or immigrants (Human Rights Watch, 2014). As a result, access to
homeownership has been hampered, and the supposed alternative, tenancy (other
The current issue and full text archive of this journal is available on Emerald Insight at:
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Catalan law
63
Received 30 September 2016
Revised 7 February 2017
Accepted 10 February 2017
InternationalJournal of Law in the
BuiltEnvironment
Vol.9 No. 1, 2017
pp.63-78
©Emerald Publishing Limited
1756-1450
DOI 10.1108/IJLBE-09-2016-0015
alternatives, such as cooperatives, are not signicant enough, as already pointed out), is
not a real alternative to homeownership. Although the original wording of the Spanish
Urban Leases Act 1994[8] (the rule governing Spanish tenancy contracts) aimed to strike
a balance between tenant and landlord interests, the measures introduced in 2013 (Act
4/2013, dated 4th of June) have reduced tenants’ stability and security, e.g. reducing the
minimum duration of the contract and abrogating the enforceability of the tenancy
contract before third parties in the event of a sale (“emptio non tollit locatum” principle)
(Nasarre-Aznar et al., 2017).
In this context, where neither homeownership nor tenancy seem to meet the current
needs of a segment of Spanish households (i.e. those who cannot buy a house but who do
not deem tenancy as a real alternative (Fotocasa, 2016[9]), there exists the need to nd
new options that can make housing access more affordable. The Catalan lawmaker took
a very strong interest in solving this issue and, after intensive pre-legislative work[10],
Act 19/2015, dated 29th of July [11], was passed[12]. Accordingly, the so-called
“intermediate tenures”, i.e. temporal ownership (propietat temporal) and shared
ownership (propietat compartida), were introduced into the Catalan Civil Code
(hereinafter, CCC), aiming at widening the spectrum of land tenures available for – but
not limited to – housing purposes. Both were forms of land ownership unknown in the
Catalan and Spanish legal systems.
2. The Catalan “intermediate tenures” in the European context
2.1 Shared ownership scheme
The concept used to describe both temporal and shared ownership in Catalonia
(“intermediate tenures”) is not new in terms of housing policies. England (and later, Ireland)
has been the major driver of these land tenures (Whitehead and Monk, 2011, pp. 326 ff.), such
as the shared ownership scheme. Broadly speaking, this scheme allows low-income
households to buy an affordable portion of the value of the home in the beginning (the
minimum share to be acquired is usually 25 per cent, the remaining share being owned by a
housing association, to which the buyer pays a rent in proportion to the value of the property
which he/she does not own), with the chance of attaining the outright ownership of the
property in a phased manner. The Irish “shared ownership lease” scheme also took the same
approach (Maddox, 2010, pp. 63 ff.)[13].
With 8,194 shared ownership sales across England in 2013-2014 (Sinn and David,
2015, pp. 11 ff.), and with a median market value of £169,259, it accounts for 0.8 per cent
of households in England, and it is deemed to be a way to either aspire to staircase up to
full ownership or to have more control and security (almost 50 per cent of those who enter
the regime were previously tenants). In spite of the challenges that shared ownership
currently faces (Council of Mortgage Lenders, 2014)[14], the fact is that it offers an
affordable alternative to private renting (more affordable than buying outright and
renting privately in all regions except the North East)[15], broadens the land tenures
available, offers the opportunity to move into full home ownership, provides security of
tenure and supports community stability (Sinn and David, 2015,p.14).
Other European countries following the civil law tradition have regulated a sort of
“intermediate tenures” (Whitehead and Scanlon, 2007, p. 144; Elsinga et al., 2007, p. 318;
Nasarre-Aznar, 2014b), e.g. The Netherlands regulates what is known as “Koopgarant”,
a sort of restricted ownership that entitles the purchaser to buy a dwelling from a
housing association at a discount of 25-30 per cent (in return for which, prots or losses
are shared between the homeowner and the housing association when the property is
sold afterwards). However, only Catalan law has adapted joint ownership rules[16]soas
IJLBE
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