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The Spanish Lawyer Online

Antonio Flores’ Blog

Thoughts about laws and regulations which affect foreigners in Spain

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Archive for the ‘Legal Practise’ Category

Driving in Spain: The costly experience of using a fake driver’s license

May 13th, 2018

shutterstock_277982513It is a well-documented fact that the Spanish Costas’ rich variety of foreign residents increases the complexity of legal issues and driving licenses -that turn out to be fake- is one of them.

This same paper reported some months back that a US national was fined €500 for carrying a ‘bogus’ international driving license, a lucky escape I should say considering that a middle-eastern businessman is facing prison time for using an “International Driver’s License” issued by an entity named as International Automobile Alliance (IAA), purportedly based in New York.

According to the State Prosecutor’s writ of accusation, the license was deemed “fake in its entirety, having a photograph affixed by the owner or a third person” and, based on those findings, requested the Court that the alleged offender is sentenced to a minimum prison term of 19 months for forging a public document and plus an additional criminal fine of 12 euros/day for a period of 18 months if the offender is unable to show evidence that he did have a valid driver’s license from another country (it now appears that only U.S. officially-approved “AAA” and “AATA” associations can issue such international licenses).

The are tens of online ‘businesses’ selling fake driving licenses, along with passports and IDs. One advertises its business offer as having […] year of experience producing original quality real/false passports, ID’s, drivers’ licenses.

Alongside these obvious clandestine operators, there is second tier of businesses that -purporting to have a specific Government official approval- state they can issue valid international driving licenses pursuant to Annex 9 of the Geneva Convention and Annex 6 of the Vienna Convention.

To sum up, a) international drivers’ licenses are generally only issued by officially recognized agencies to drivers who already have a valid license from the country and b) the agencies issuing them must be approved by the specific Government.

Legal Practise , ,

THE LANGUAGE OF LAW IN SPAIN

February 16th, 2018

shutterstock_222873250We often hear statements relating to the implication of contracts and other legal documents that are in a language different from Spanish. One of those statements has, by its own right, risen to the category of legal myth/urban legend: I am referring to the belief that a contract signed in Spain in a language different from official Castilian (or for that matter regional languages) is null and void and thus, does not create rights or obligations.

There is an evolution of the above far more twisted: that if a person that does not understand Spanish signs a legal document in this language, they can challenge it in Court where, incidentally (according to a minority of expats) the Judge should -at the very least- know English but if not, a translator should always be provided at to ensure his/her rights are protected.

The following notes should help dispel any potential confusion as to what is correct from what not, “language-wise”:

  • A document of a contractual nature can be drafted in any language for which an official translation service is available. This implies that contracts in any language that is official somewhere in the world is legal, since a valid translation can be provided.
  • Not understanding the content of a contract is not an excuse, as much as ignoring the law excuses no one, as the principle goes (save for some exceptions, notably in financial or investment contracts).
  • Pursuant to art. 142.1 of the Civil Procedure Law, “In all judicial procedures, the Judges, Senior Judges, Public Prosecutors, Court Clerks and other civil servants in courts and tribunals shall use Castilian Spanish, the official language of the State.”, but it also adds in 143.1 that “when a person who does not know Castilian Spanish nor, in the event, the own official language of the Autonomous Authority has to be questioned or make a declaration, or when it is necessary to personally let him know a decision, the Court Clerk may issue an order authorizing any person who knows the language concerned to act as interpreter, in which case the said interpreter shall be required to swear or promise that the translation is true to the original.”
  • And finally, in accordance to art. 144.1, “any document worded in a language other than Spanish or, as appropriate, the official language of the Regional Authority in question shall have a translation of such document attached thereto.”

Legal Practise ,

Spanish Notaries and Supreme Court at war over validity of powers of attorney.

August 14th, 2017

According to the General Council of Notaries, these highly qualified professionals fulfil an essential part of the judicial life of this country by bringing legal sshutterstock_601180544ecurity and certainty. Their website states the following: “Notaries are State civil servants required to provide citizens with the legal certainty guaranteed by the Article 9 of the Spanish Constitution within the context of extra-judicial legal dealings.”

A recent ruling by the Supreme Court -and more so a previous one of 2013- seem to cast doubt over such convincing and forceful statement in respect to one the main functions of Notaries: granting powers of attorney (POAs) and their presupposed validity if the grantor challenges them in Court.

The 2013 sentence -supported by a prior one of 2010- shook the notarial establishment when it declared that POAs to settle, dispose of, mortgage or perform any other act inherent to ownership (art. 1713) would have to […] clearly specify the object and subject, in a clearly defined and predetermined manner. The high tribunal’s interpretation of general POAs to sell or mortgage is thus far-reaching: if the POA does not specify the property or the lender, the transaction can be rendered null and void.

Again, in 2016, the Supreme Court stated that those transactions where such POAs were used could also be declared null and void where the recipient abused or exceeded the instruction. This is how the Court explained it: […] In this context, the will of the parties stands as the guiding interpretation criteria, ruling out an automatic or mechanical reliance on the literality of the POA granted, but principally on the intention and will of the grantor to establish the purpose and sense of the instruction. And secondly, the obligations of fidelity and loyalty are indispensable guidelines connected to carrying out the instruction.

The importance of these rulings (dated 6/11/2013 and 20/5/2016) is that they rendered a Deed of Gift and a Deed of Sale of Shares null and void, even if the POAs were -allegedly- properly granted in front of Notary Public, with all the required solemnities and formalities.

For its part, Notaries believe that their job is separate from that of Courts and that the above rulings represent solutions to specific disputes brought before them.

Legal Practise , ,

Are Powers of Attorney granted by UK Notaries Public Valid in Spain?

December 5th, 2016

The effects of Brexit appear to have reached some Spanish government offices, shutterstock_450860425
inclusive of Courts of law. The Directorate General of Registrars and Notaries (DGRN), a regulatory body equivalent to the UK Notaries Society, has recently issued a startling ruling (14 Sept. 2016) rejecting the validity of all Powers of Attorney (PoA) granted by a qualified United Kingdom “Notary Public”, on grounds that the authority and competence of these British professionals is not equivalent to that of their Spanish peers.

The ruling went as far as unbelievably stating that only UK-qualified “notaries-at-law” or “lawyer notaries” could validly issue powers of attorney, negating this prerogative to plain “notaries public”.

As was expected and with immediate effect, the erratic decision sent shock waves throughout the network of thousands of professionals, directly or indirectly, involved with expat legal work. And for a reason: hundreds of Court cases could be dismissed (one of Lawbird Legal Services’ case among many), thousands of property transactions could be voided (on the upside, along with their mortgage loans) whenever such PoAs were used and overall, legal chaos.

Alerted by this misguided ruling, the Notaries Society, based in Ipswich, issued the following statement:

  1. A Notary is a qualified lawyer whose work is recognized internationally, unlike the work of Solicitors. The primary function of a Notary therefore, is the preparation of documents and the authentication of clients’ identities and signatures principally for use abroad.
  2. Some Notaries are also “Scriveners”, who mostly operate in London.
  3. “Notaries-at-law” or “lawyer notaries” do not exist as a separate profession.

Hundreds of Spanish Notaries and Registrars, fully aware that their regulator´s historical cock up would certain bring embarrassment to their reputation but more importantly, cause incalculable financial damage, have taken an unusual step: completely ignore this binding ruling and fully accept the Powers of Attorney correctly granted by UK Notaries Public.

And as if to soften the blow, the International Law Registrars Council has issued a non-binding report where it is confirmed that documents signed by UK Notaries Public, who are appointed by the Archbishop of Canterbury and are regulated by laws as ancient as the Ecclesiastical Licenses Act 1533, an Act of the Parliament of England.

Legal Practise, Property , , , , ,

Is it Legal to Use the Same Lawyer for Conveyancing, Divorce etc.?

November 7th, 2016

shutterstock_447814951

This question often arises in our office when parties to a legal matter decide to use the same lawyer. Typically, one will encounter property conveyancing transactions or rental agreements, company formations by several investors, mutually agreed divorce settlements etc.

In some jurisdictions, the law considers that parties to a legal process are generally adversarial –in other words, it’s one party and the legal representative versus everyone else involved in the transaction- and therefore, each party has to be represented separately.

In England, the Solicitors Regulation Authority (SRA) has stated that acting for both buyer and seller on a transfer of land for value is ‘indicative’ of a potential conflict of interest.

The Code of Conduct for Lawyers in the European Union states that lawyers may not advise, represent or act on behalf of two or more clients in the same matter if there is a conflict, or a significant risk of a conflict, between the interests of those clients.

In Spain -barring any conflict of interest- the Lawyers’ Deontological Code does allow one lawyer to act for two parties, under the following terms:

Art. 13.4: The Lawyer cannot act for two parties with conflicting interests. In case of conflict of interest between parties represented by the same lawyer, the latter will cease to act for both unless expressly authorized by both parties to act for one.

Notwithstanding, the Lawyer can act on behalf of all parties as a mediator or in the preparation and drafting of contractual documents, having in such case to observe a strict and exquisite impartiality. 

This applies to the law firm but also to member lawyers that work in or are associated to the law firm (Art. 13.7). These lawyers will not be considered, individually, as independent representatives of each client but as one single representative and will fall under the scope of article 13.4 above.

In summary, Spanish laws do allow parties to engage the same lawyer in a `mediator´ role, as explained above.

Legal Practise , ,

The 11-month Rental Contract and Other Legal Urban Myths in Spain

September 7th, 2016

shutterstock_433242178Spain is not different when it comes to “legal urban myths”, statements that sound true but are legally wrong. Let’s see some of them:

  1. Administrative residency and tax residency are the same: taking out your “residencia” at the Police Station does not make you a tax resident of Spain. To be one, you need to prima facie file tax returns in this country or you are exempt from doing so, prove continuous residency via electricity bills, “empadronamiento” certificates and so on.
  2. Infidelity is a ground for divorce: as explained in the previous article, the only “ground” for divorce is to have been married for 3 months. End of.
  3. Public nakedness is a criminal offence: unlike many other countries, walking around naked per is not a statutory offense unless it is proven there is a sexual connotation. However, if you expose yourself you will be subject to heavy fines: The Supreme Court ruled in 2015 that nudity cannot be condoned for it affects the peaceful daily coexistence.
  4. 11 months is the limit for short term rentals: Never has a legal urban myth expanded so rapid and damagingly. There is no such thing as an 11-month contract that is different from say one with a 9 or 13-month term. In fact, the law in Spain states that any residential rental contract can be legally extended to 3 years by the tenant. Holiday lets do exist but they are not defined by the term, but by the use of the dwelling: sporadic, non- permanent, accidental, circumstantial are some of the words use by the Courts to differentiate short term from long term or permanent.
  5. Red cars cost more to insure: many people will not know it but the car insurance industry is colour-blind.
  6. Legal letters have to be replied to: it is often the case that parties to a legal dispute feel that one email or letter needs to be matched with a reply, thus causing endless threads of communications. From a tactical point of view too, giving out to much information to a would-be litigant can be counterproductive. To sum up, avoid the temptation of a courtesy reply unless these letters are coming from the Courts or from Government offices.

 

 

 

Legal Practise , , ,

Real Estate Agents in Spain: Who Gets The Commission?

June 5th, 2015

Real Estate Agents (REA) in Spain have long thought that if they register a client with a property owner or developer (irrespective of whether they show them the property), they have an automatic right to receive a commission when the property sells; although it may come as a shock to many, this is not the case, according to specific case law on the matter. The following rulings explain this:

Appeal Court in Oviedo (22/2/1996):

Only the broker that has effectively concluded the contract between buyer and seller is entitled to retribution, rejecting “equitable remedies” to the broker who, having intervened in some capacity in the contract has nonetheless failed to close an agreement. 

Appeal Court in Oviedo (27/2/1998):

The elucidation of who is entitled to the commission where several REAs intervene is not an easy one for, although several REAs may have ostensibly taken part in the negotiations, it is only the REA whose actions were decisive to perform the instruction who will be entitled to a commission payment.

In a transaction where the principal has hired several REAs, it is not always easy to establish which are those specific actions, as carried out by each REA independently, which produce the desired result of successfully closing the deal. The Court is of the opinion that where this situation occurs, it is a question of fact whether a specific REA action was decisive in securing the closing of the deal, in other words, the causation of the exchange of contracts between buyer and seller even if, in practice, coexisting actions or other particular factors of other REAs could have helped achieve the result.

Supreme Court (23/2/1965):

Where several independent brokers concur with each other in a transaction, remuneration will have to be paid to the one whose action(s) was a cause, even if not exclusive, of the success of the intermediation, i.e. the exchange of contracts. Not upholding this view risks transmuting the very nature of a brokerage into a type of services contract where remuneration would be paid irrespective of the result of the conclusion of a sale, thus depriving brokerage agreements from the risk-of-failure element that is inherent to any aleatory contract.

This conclusion is even shared by international case law (Webranchek v LK Jacobs & co Ltd.):

Where a property is listed with several agents and they compete in trying to conclude a sale by the principal to a particular third party, it is not necessarily the agent who first introduces the purchaser who is entitled to remuneration but the agent who is the effective cause of the transaction being completed.

The most immediate consequence of the application of this case law is that the commonly known action of “registering a client”, on its own, does not entitle the agency to receive a commission. On the contrary, a REA needs to prove that its endeavours have materialized, specifically, in the exchange of a purchase sale agreement (of whichever description).

Legal Practise , , , ,

Buying Property in Spain: When the Liability Falls on the Lawyer.

March 26th, 2015

Spanish lawyers assisting investors in the purchase of property have been regularly charging the fairly standardized fee of 1% plus Vat. For many, this is an unnecessary expense that can easily be avoided by getting one of the following to help in the process: a family friend, a local “gestor” or even the real estate agency. Their arguments are varied: lawyers charge too much for what they do, they are bad in communicating with clients and if something goes wrong, they don’t want to know.

To a certain extent, I can sympathize with detractors of legal professionals who represent property buyers; they reckon that because we have Notary Publics and a Land Registry system, investors should be protected and minor legal guidance should suffice. In an ideal world probably, but not elsewhere.  

I naturally advocate using lawyers to buy property, and so does the claimant in civil liability case that was brought against a firm of lawyers based in Marbella and their insurers. For this client, the fee of 1% plus Vat has possibly turned out to be the best investment ever made for he has recovered, from the Law Society insurers (Caser Seguros), €107,000 paid in year 2000 -plus interest since that date- on 2 failed off-plan apartment.

The mistake made by these property conveyance lawyers was not small: when they demanded bank certificates guaranteeing the investments, mandatory under Spanish law, the property developer managed to get away with flogging them fake insurance policies issued a shelf company, Compagnies del Guaranties, run by an Italian fraudster.

There was actually no need to run through the lengthy bogus document which had, I must admit, an air of “officialness”. Just by searching the words “Compagnies Des Guaranties” one would have seen them prominently featuring on a blacklist compiled by the Dirección General de Seguros.

Granted, do you don’t need to pay a lawyer to do this simple job. But honestly, how many investors would have noticed that these were spurious policies? Very few, as it happened, when you realize the nationwide dimension of the con. At least, in a quirk of fate, those who hired a negligent lawyer will get paid!

 

Legal Practise, Litigation , , ,

Can Communities of Owners Chase Unpaid Fees Through Foreign Courts?

December 19th, 2014

Some days back, an interesting legal matter was raised by a customer who had received, in his Liverpool home letterbox, a letter from UK-based solicitors demanding payment of unpaid “Community Fees”, on behalf of the administrators of a Fuengirola Urbanization.

On reading the content of it, it was clear that the 2nd class-delivered letter raised an important legal question: Can a Spanish Community of Owners legally pursue such debts through any EU-Court?

One of such law firms seemed to have to answer to this:

[…] Where defaulting owners are resident in the UK or Ireland, we avoid the delays and difficulties described above by recovering the debt directly in an owner’s country of residence.  This we do by relying on the European rules permitting debt to be recovered throughout the European Union, no matter where that debt was generated within the European Union.

European rules referred to by the debt-recover firm are none other than the REGULATION (EC) 1896/2006 CREATING A EUROPEAN ORDER FOR PAYMENT PROCEDURE, and the lawyers would have invoked article 2, which says:

[…] This Regulation shall apply to civil and commercial matters in cross-border cases, whatever the nature of the court or tribunal. It shall not extend to…claim arising from non-contractual obligations, unless…they relate to liquidated debts arising from joint ownership of property.

A simple answer to a fairly simple question then? So we thought until Spanish Judges got involved to upset the EU consensus in a recent seminar held on the matter. Out of the 8 participating magistrates, only one accepted that both the Spanish and EU debt recovery procedures can coexist and therefore, be alternatively used by Communities of Owners. The dissenting judges argued that, although the EU Regulation specifically deals with this, Spanish laws and tribunals should take precedence inasmuch as:

i)                    The debt is classified as “ob rem” i.e. attached to a property, thus necessarily connecting the matter to the local Court where the dwelling is located in.

ii)                   According to art. 9 of the Horizontal Property Act, all owners are obliged to designate a Spanish address for notifications, thus impeding the application of foreign Courts and laws.

The matter is of great interest as once again, the Spanish judiciary clash with EU pragmatic law makers always keen to harmonize diverse legal systems. But then, can Spain be allowed to cherry pick the scope of application of EU laws when it has adhered to them, formally, as opposed to countries –such as Denmark- who have opted out?

And will English Courts (or for that matter, any other Court in the EU) not just consider, but even get to know that a group of Spanish Magistrates have ever expressed an opinion different from the official position? No chance.

Legal Practise , , , ,

Notes on Legal Fees in Spain

October 19th, 2014

Recent enactment of legislative reforms that requires claimants to pay court filing fees when “making use of the public service of the administration of justice” has forced lawyers, already under severe stress due to the still struggling economy, to downsize their fee aspirations. In fact, even to the point of having to waive the retainer to allow a case -or an appeal- to go forward, on a no-win no-pay basis.

But what happens when one loses a case? And if no agreement was struck with the lawyer?

The following notes should help understand the legal fees’ system:

a)      The Spanish Solicitors’ Code of Practice establishes an absolute freedom to fix legal fees, pursuant to a Supreme Court ruling that nullified the prohibition of conditional fees.

b)      Where no agreement is struck clients needs to be aware that by default, they will fall under the legal fee guidelines approved by the provincial Bar Association, and these can be pretty heft (a case worth €300k will attract €25k in fees, only in the first instance).

c)       Equally, where a case is lost and the Court awards costs i.e. pay the other party’s legal fees, they will too be calculated by reference to the respective Bar Association, in any case.

d)      If scenarios b) and c) happen to coincide, an unsuspecting claimant could find that a case relating to a property worth say €300k could actually cost him €50k!

e)      On property conveyancing, 1% of the purchase price is still pretty standard, in spite of the crisis; the reason for this is perhaps to do with the hefty quantum of a potential claim i.e. up to the value of the property and, notably, the very the lengthy mandatory 15-year liability term to validly bringing a claim against a conveyancing lawyer.

The above conclusions make it very advisable prior to filing a case, and even responding to a claim filed against one, to request from the acting lawyer for an appraisal of the likely legal costs should the case be lost as, very often, these are ignored ab initio. And naturally, have one’s own fees agreed and ratified by signing a letter of engagement or letter of instruction.

Legal Practise , , ,