The Directorate General for Legal Certainty and Public Faith analyses the suspension of the registration of a property sale involving an asset that was granted free of charge by a Municipality subject to a social purpose condition for 30 years (Art. 111 of the Local Entities Assets Regulations). The resolution addresses whether the mere expiry of the 30-year term automatically extinguishes the right of reversion, or whether the Municipality's consent or the formal cancellation of the encumbrance is required to permit the transfer of the asset.
For entities that have received free grants of local assets (such as associations or foundations), the expiry of the term of the modal condition does not automatically extinguish the limitation on ownership; proof of extinction or cancellation of the condition is required to permit a sale (Legal Grounds I). For buyers of properties with a history of municipal cession, there is a risk that the Land Registry will suspend registration if the Municipality's consent or a title proving the cancellation of the encumbrance is not presented (Facts II).
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