The right of pre-emption rights in property sales exercised by the Generalitat Valenciana has long been a source of doubts, inquiries, and delays in real estate transactions. This right affected not only social housing (V.P.O.) but also properties surrendered to the bank to cancel the mortgage debt (dación en pago), foreclosure processes, and more. However, the recent enactment of Law 5/2025 represents a significant regulatory change. We analyse it, below.
When and why pre-emption and redemption rights applied. Decree Law 6/2020.
Decree Law 6/2020, dated June 5th, granted the Generalitat Valenciana a preferential right to acquire certain properties before they were sold to third parties. In which cases did this right apply?.
.- Properties transferred back to the bank in lieu of mortgage repayment: when the owner handed over the property to the bank to settle their mortgage debt.
.- Foreclosures: when the bank took ownership of the property after judicial proceedings for non-payment.
.- Bulk sales: such as when 80% or more of the units in a building were sold, or when 10 or more properties were transferred in bulk.
In all these cases (regulated by article 10 of the mentioned Decree), both seller and buyer had to notify the Valencian authorities before formalizing the sale at the Notary’s office. They had to wait for the administration’s formal communication on whether it would exercise its right or not, meaning acquiring that property under the same conditions and with preference over the buyer. These procedures often delayed real estate transactions significantly.
Law 5/2025: Farewell to pre-emption rights in property sales in the Valencian region.
Published in the Official Gazette on May 31st, 2025, Law 5/2025, of May 30th, introduced a key change.
In its sole repealing provision, section f), Decree Law 6/2020 is completely abolished. This means it is no longer necessary to process pre-emption and redemption rights before the Valencian administrative authorities in these types of sales. That is, when the property was acquired by deed in lieu of a mortgage debt, a foreclosure process, etc.
The law came into effect on June 1st, 2025.
Does pre-emption and redemption rights still exist in any case?. Social housing.
This change does not imply that pre-emption and redemption rights have completely disappeared. These rights remain in force for social housing (known in Spain as “V.P.O.”). In such cases, it is still necessary to carry out the pre-emption procedure before the Valencian reginal authorities, as has been done until now. It is also important to remember that these properties are often subject to other limitations such as maximum sale price, etc.
Conclusions.
If you are thinking of buying or selling a property that was once adjudicated to a bank or transferred by deed in lieu of foreclosure, you no longer need to process pre-emption and redemption rights before the Valencian authorities. However, if it is a social housing property (V.P.O.), these rights remain fully in force and must be properly processed with the administration. At White-Baos Lawyers, we are experts in real estate law. Contact us without obligation.
The information provided in this article is not intended to be legal advice but merely conveys information relating to legal issues.
Carlos Baos (Lawyer)
White & Baos.
Tel: +34 966 426 185
E-mail: info@white-baos.com
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