The tax office seizes your property for someone else's debt

The case, in five lines

What is brought

An ownership claim in the administrative route and, afterwards, a civil ownership claim seeking the lifting of the seizure.

Before which court

The collection office running the enforcement receives the pleading and forwards it to the competent body. If it is refused, the claim goes to the Civil section of the Tribunal de Instancia (the first instance court).

Deadline

There is no deadline in days to raise it, but there is a limit: article 119.2 RGR bars an ownership claim once the asset has been transferred to a buyer in the sale or awarded to the tax authority. After the decision, article 120.3 RGR gives ten days to evidence the court claim.

Who can bring it

The third party who claims to own the seized asset and did not acquire it from the debtor after the attachment. Article 117.3 RGR expressly excludes the debtor himself.

Financial risk

If the claim fails, enforcement continues over the asset and the civil order rules on costs under articles 394 and following LEC. Article 598.2 LEC also allows the suspension to be made conditional on the claimant providing security.

The claim belongs to the third party owner, never to the debtor

Article 165.3 LGT describes the situation precisely: where a third party seeks the lifting of a seizure because the ownership or title of the seized assets or rights belongs to him, he shall file an ownership claim with the competent administrative body. Article 117.2 RGR adds that it can only be based on ownership of the seized assets or on a right to be paid in priority.

Article 117.3 RGR closes the door on a frequent mistake: a claim filed by the debtor cannot be treated as an ownership claim. The debtor does not dispute title, he disputes the debt or the attachment, and those are different routes. That is why the first thing settled is who signs the pleading and on what title.

Before the civil court the standing is the same. Article 595.1 LEC allows an ownership claim by anyone who, without being a party to the enforcement, states that he owns an asset seized as belonging to the debtor and that he did not acquire it from him once the attachment was made. That final point rules out purchases made after the seizure.

The administrative claim is compulsory before going to the civil court

Article 117.1 RGR says it plainly: the administrative claim is a prior requirement for bringing the ownership action before the civil courts. Anyone who goes straight to court finds the door closed, the claim rejected and the asset already heading for auction, with the debt of another person still pressing on it. The order of the steps here is not a formality, it is the difference between saving the asset and losing it.

Article 119.1 RGR sets out how it is filed: in writing, with written prima facie evidence of the basis of the claim, keeping the original documents available to the collection offices, and addressed to the body running the enforcement, which forwards it to the competent one. If something is missing, ten days are given to put it right, with a warning of closure.

Once the ownership claim is admitted, the seizure of that asset is suspended

Article 165.4 LGT provides that, where an ownership claim is brought, enforcement is suspended as regards the disputed assets and rights, once the appropriate securing measures have been adopted. Article 119.4.a) RGR details those measures: registration of the seizure in the relevant registers or deposit of the assets, and only then does the suspension follow.

The suspension does not cover the whole file. Article 119.4.d) RGR clarifies that enforcement continues over the debtor's other assets until the debt is satisfied, and that in that case the seizure over the disputed assets is lifted without this implying any recognition of the claimant's title. Where the asset is money in accounts, paragraph b) provides for it to be deposited or retained.

It is worth knowing that a priority claim works the other way round. Article 165.5 LGT provides that enforcement continues until the assets are realised and that the proceeds are deposited pending the decision. That is why the classification of the claim, which article 119.3 RGR entrusts to the administrative body, decides from day one whether the asset is saved or sold.

There is a point of no return, and it is the sale of the asset

Article 119.2 RGR sets the time limit: an ownership claim will not be admitted after the moment when, under civil law, the assets are transferred to a third party acquiring them through the sale routes laid down in the regulation, or to the tax authority by award in payment. After that, no claim is available.

Article 596.2 LEC says the same before the courts: the court will reject outright, by order and without any further steps, a claim brought after the asset has been transferred to the creditor or to the third party acquiring it at public auction, and also one not accompanied by written prima facie evidence. Two grounds of rejection avoided by acting early and with documents.

Six months to decide and ten days to sue

Article 120.1 RGR requires the claim, the documents and the enforcement file to be sent to the deciding body within fifteen days of admission, with a reasoned proposal, and an opinion to be sought from the legal advisory body, which has a further fifteen days. That is when the file closes: whatever has not been produced is not weighed.

Article 120.2 RGR requires the decision to be notified within six months and adds that, once that period passes without notification, the claim may be treated as refused for the purpose of bringing the corresponding court claim. Silence, therefore, neither blocks the case nor forces you to wait indefinitely for someone to answer: it opens the door to the civil court and lets you move on with the asset still suspended.

The most dangerous deadline comes next. Article 120.3 RGR provides that, if ten days pass from notification without documentary proof before the administrative body that the court claim has been brought, the suspended enforcement steps will resume. In other words, suing is not enough: it must be evidenced, and within those ten days.

What can be asked of the court and what the order really decides

Article 601 LEC narrows the subject matter: in an ownership claim no relief may be sought by the claimant other than the lifting of the seizure, and the other side may only seek to maintain it. It is not the place to claim damages or to settle the relationship with the debtor: it is a surgical action on the attachment of that particular asset.

Article 603 LEC sets out the scope of the decision: it is resolved by an order ruling on the ownership of the asset and on whether its seizure was proper, solely for the purposes of the ongoing enforcement, with no res judicata effect on title. And article 604 LEC states the practical consequence of a successful order: lifting of the attachment, release of the deposit and cancellation of the registered entry.

How we run the case, step by step

1. 1

   Gathering the written prima facie evidence

   Articles 119.1 RGR and 595.3 LEC require written prima facie evidence of the basis of the claim. We select the documents that date the acquisition and show payment with the claimant's own money, and keep the originals available.

2. 2

   Ownership claim addressed to the enforcing office

   The claim is filed under article 119.1 RGR with the office running the enforcement, which forwards it to the competent body. We identify the asset, the date of the seizure and the title of ownership, and expressly request the suspension of article 165.4 LGT.

3. 3

   Monitoring admission and the securing measures

   Article 119.1 RGR requires the admission decision within fifteen days of receipt or of the defects being cured, notified to the claimant and to the debtor. We check which measures of article 119.4 RGR are adopted and that the suspension actually reaches the asset.

4. 4

   Express decision or silence after six months

   Article 120.2 RGR sets six months to notify the decision and allows the claim to be treated as refused for the purpose of suing if that period ends with no answer. The exact date is documented, because the next deadline starts from it.

5. 5

   Civil claim and proof within ten days

   The ownership claim is brought before the Civil section of the Tribunal de Instancia and, within the ten days of article 120.3 RGR, documentary proof is filed with the administrative body. Without that proof, the suspended enforcement resumes.

6. 6

   Lifting the seizure and cancelling the entries

   If the claim succeeds, article 604 LEC orders the attachment to be lifted, the deposit released and the registered entry cancelled. In the administrative route, article 121.1 RGR produces the lifting of the seizure over the asset claimed.

The law that applies

• Art. 165 LGT. Governs the suspension of enforcement, its automatic suspension without security in cases of error, payment, remission, set off, deferral, suspension or limitation, and provides that a third party seeking to lift a seizure must file an ownership or priority claim, with enforcement suspended over the disputed assets in the first case and continued in the second. BOE-A-2003-23186
• Art. 117 RGR. Makes the administrative claim a prior requirement for bringing the ownership action before the civil courts, limits its basis to ownership of the seized assets or to a right of priority in payment, and excludes any claim filed by the debtor from being treated as such. BOE-A-2005-14803
• Art. 119 RGR. Requires a written pleading with prima facie evidence addressed to the enforcing office, ten days to cure defects and an admission decision within fifteen days; bars a second claim and an ownership claim after the asset has been transferred; and details the effects of admission, with securing measures preceding the suspension. BOE-A-2005-14803
• Art. 120 RGR. Requires the claim and the file to be sent to the deciding body within fifteen days with a reasoned proposal and a legal opinion, sets six months for the decision to be notified, allows silence to count as refusal for the purpose of suing, and resumes enforcement if the court claim is not evidenced within ten days. BOE-A-2005-14803
• Art. 595 LEC. Gives standing to bring an ownership claim, in the form of a court claim, to anyone who, without being a party to the enforcement, states that he owns an asset seized as belonging to the debtor and did not acquire it from him after the attachment, and requires written prima facie evidence with the claim. BOE-A-2000-323
• Art. 603 LEC. Provides that the ownership claim is resolved by an order ruling on the ownership of the asset and on whether its seizure was proper, solely for the purposes of the ongoing enforcement, with no res judicata effect on title, and deciding on costs under articles 394 and following. BOE-A-2000-323

Each article checked against the consolidated text published in the BOE (the Spanish official gazette).

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