Investment approach
A flat in ejecución hipotecaria: buying from the debtor before auction
A flat in ejecución hipotecaria can be bought at auction or from the owner before it. What each stage of the process means, why the deal cannot close without the bank and where the buyer's risks lie.
Ejecución hipotecaria (mortgage foreclosure) is the judicial recovery of a debt directly against the mortgaged property, which can end in its sale at auction. On a loan to a private individual for a home, the bank may demand the whole debt early only if the arrears amount to at least 3% of the capital or 12 monthly payments in the first half of the term, and 7% or 15 payments in the second (art. 24 of Ley 5/2019, the mortgage credit law). A buyer meets such a property at auction or with the owner before it.
How an ejecución hipotecaria runs, stage by stage
Each stage changes the risks and the realistic timing of a deal, so the first thing is to find out which stage the case is at. The rules come from the Ley de Enjuiciamiento Civil (LEC, the Civil Procedure Act).
| Stage | What happens under the law | What it means for the buyer |
|---|---|---|
| Claim | The bank files a claim and states whether it is the debtor's home and whether the bank is a gran tenedor (large holder of housing) (art. 685) | The case is already in court, the timing depends on the court |
| Demand for payment | A demand is sent to the debtor and to third-party owners (art. 686) | After 10 days the bank may ask for temporary administration of the property (art. 690) |
| Certificate of title and charges | The registrar issues the certificate and enters a note of the proceedings in the registry (art. 688) | The mortgage cannot be removed other than through the foreclosure itself until the court lifts the note |
| Announcement of the auction | The subasta (auction) is set 20 days after the demand and the notifications (art. 691) | The window for a deal before the auction narrows |
| Distribution of the money | The auction price goes to the bank's debt, interest and costs within the mortgage cover; the remainder to later creditors and the owner (art. 692) | The buyer at auction gets the property, but not possession at once |
The minimum auction price is fixed by the parties already in the mortgage escritura (notarial deed), and it cannot be below 75% of the tasación (bank valuation) made for the loan (art. 682). How the auction itself works is covered in the article on the judicial auction.
Can the debtor stop the process
Yes. If the mortgaged property is the debtor's main home, the debtor may release it before the auction closes by paying the exact sum of what has fallen due and the interest, together with later instalments, even without the bank's consent (art. 693.3 LEC). It can be done a second time only if at least three years have passed between the release and the new demand.
For a buyer this means an agreement with the owner can lose its point at any moment before the auction: the owner finds the money and decides not to sell. The deadline and the terms for leaving such an agreement are set down in writing.
Why a direct purchase will not close without the bank
A flat can be bought from the owner during enforcement, but only together with the bank. While the registry carries the note of the certificate issued under art. 688.2 LEC, the registrar will not cancel the mortgage on any ground other than the foreclosure itself until the note is lifted on a court order.
The order of action in a direct purchase:
- Get from the owner the case number and permission to talk to the bank; request a fresh nota simple (Land Registry extract).
- Find out from the bank the full sum due on the date of the deal, with interest and court costs.
- Agree with the bank that it will take the money, drop the enforcement and ask the court to lift the note in the registry.
- Check the other charges: other mortgages, attachments, debts to the comunidad (owners' association). How to read them in the extract is covered in the article on cargas in the nota simple.
- Sign the escritura only with a guarantee that the money goes to repay the bank's debt and that cancellation of the mortgage and of the note is done under the agreed plan.
- Settle the question of possession: who lives in the flat and when they leave.
How to calculate the price of a direct purchase
Worked example, not a forecast. By nearby transactions the flat is worth 400,000 €. The debt to the bank with interest and costs is 300,000 €, plus 6,000 € of debt to the comunidad.
| Item | Amount |
|---|---|
| Price agreed with the owner | 360,000 € |
| To the bank for repayment at the notary | 300,000 € |
| To the owners' association | 6,000 € |
| Left to the owner | 54,000 € |
| Buyer's ITP (transfer tax), 10% | 36,000 € |
The discount to the market, 40,000 €, exists only if the deal closes and possession is handed over on time. If the owner stays in the flat or the process goes to auction, the calculation changes completely.
When such a purchase does not fit
A direct purchase does not fit if the bank is not ready to cooperate or if the debt is larger than the price of the flat: then the owner has nothing to offer and the case goes to auction. It also does not fit a buyer who needs the flat by a particular date: the process depends on the court, the bank and the debtor's decisions.
A separate risk concerns the occupants. Since 8 October 2026 Real Decreto-ley 29/2026 (a royal decree-law) has been in force: until 31 December 2030 the court suspends proceedings against vulnerable occupants with no alternative housing in the cases the decree describes (art. 2) (BOE). The Congreso has not yet validated the decree, so before deciding the current wording is checked with an abogado (lawyer). Buying from the bank a flat it has already been awarded is a different scenario, see the article on the piso de banco (bank-owned flat). A specific property can be discussed through DNPI's contacts.
Questions and answers
How does ejecución hipotecaria differ from subasta?
Ejecución hipotecaria is the whole process of recovering the debt against the mortgaged property. The subasta is one of its stages, the sale at auction, which can also be the outcome of enforcement for other debts.
Can the debtor stop enforcement at the last moment?
If it is their main home, yes: until the auction closes they may pay the exact sum of what has fallen due with interest, even without the bank's consent, under art. 693.3 LEC. A second time only after three years.
Can a flat be bought from the owner if the bank has already sued?
It can, but with the bank's participation: it must receive the money, drop the enforcement and ask for the note in the registry to be lifted. Without that the registrar will not cancel the mortgage.
After how many months of arrears can the bank start enforcement against a home?
For a loan to a private individual for a home, arrears of at least 3% of the capital or 12 payments are needed in the first half of the term and 7% or 15 payments in the second, plus a demand from the bank with a one-month deadline. This is the rule of art. 24 of Ley 5/2019, and the contract cannot make it worse.
Will the buyer at auction get the flat vacant at once?
Not necessarily. Possession and the eviction of occupants are decided by the court separately, and additional rules apply to vulnerable occupants. The occupancy position is checked before the auction.
