Search:     Go  
The Spanish Lawyer Online
The Spanish Lawyer Online

Antonio Flores’ Blog

Thoughts about laws and regulations which affect foreigners in Spain

Archive

Posts Tagged ‘Spanish eviction’

European Court of Justice Lukewarm Ruling on Spanish Foreclosure Laws

April 15th, 2013

A recent ruling by the European Court of Justice (ECJ) has given Spanish Courts dealing with loan foreclosures the right to interpret contracts and their clauses, but has not declare eviction laws completely illegal, as has been widely publicized. The Q & A below summarize the ruling and its effects on borrowers:

Why did the ECJ get involved in this matter? Spanish foreclosure procedural laws are deemed, among legal professionals, as a one-way street. This means that if your bank forecloses you either pay up the whole sum owed or you instigate criminal proceedings to prove that the loan was fraudulent. There are no other possible defenses to stop ultimate eviction under these declaratory proceedings

Is my mortgage loan illegal by virtue of this ruling? No but now Spanish Court have the powers to delay or freeze the eviction of home buyers, who have fallen behind on their mortgage payments, whilst they assess the fairness of certain terms and conditions within the loan contract that, according to the ruling, create “significant imbalance” to the detriment of the consumer.

Which terms were referred to in the ruling? The ECJ criticized the contract submitted to them on 2 grounds: it allowed the bank to take away a home after just one failure to pay an instalment, and provided for a default interest rate of 18.75 per cent. According to the ECJ, Spanish Courts dealing with foreclosures are now able to determine the validity of these clauses.

So how does this affect my existing mortgage loan? The ECJ has opened the door for Spanish Courts to annul mortgage loan clauses that are objectively unfair, such as those quoted above. However, it does not give the borrower the right to stop paying the loan, avoid the debt altogether or stay in the property for good without keeping up the repayments. As journalist Mike Shedlock wrote in respect to Mr. Aziz, the claimant whose loan was scrutinized by the ECJ, “I suspect he can afford to pay 0% and nothing on principal”…which gives us an idea of the where the real problem lies!

Equity Release, Mortgages, Property , , ,

New Law Attempts to Speed up Eviction of Defaulting Tenants in Spain

December 24th, 2009
Deafaulting Tenant Spain

State in which our client's apartment was left by a defaulting tenant

Great expectation has been raised now that the new law on rental eviction procedure and a few other bits and pieces has been approved. Because what this new law intends to do is to help boot a defaulting tenant in a matter of days, or so it seems when you read it (it now talks about “days” as opposed to “months”). The reality however is that for all its good intents and purposes it is quite possible that landlords will still have to resort to switching off water and electricity supplies, calling in a couple of Liverpool heavies or hiring a failed guitarist to make nights unbearable by playing “Stairway to Heaven” outside the apartment for hours on end. The reason is that, even if the new law is clearly envisaged to speed up kicking out tenants, the stark reality is that Courts in Spain are so slow that it is difficult to see how switching procedures (to a quicker one) and reducing significantly the time to comply with an eviction notice (fifteen days) can succeed.

According to a report released by a Law Firm in Barcelona (Alboreca Abogados de Vivienda), after reading more than 2,000 Court rulings and interviewing a fraction of those poor landlords, the time to finally get a sentence to “launch” (as Spanish law calls it) your hated tenant averages six months and fourteen days. The problem is that you then need to execute this ruling so that eventually the police can effective throw the bastard out and this will take another three months and sixteen days so you are looking at an average of ten months in all…but then again it takes another eight months and five days to make up you mind to go to Court (getting in touch with lawyers, arranging meetings, paying them extortionate fees…) so after you add up it will almost take two years from when the monthly rental fails to show up on your bank account to when you can visit your “investment” property again. Not to mention of course that you should not expect a bottle of champagne with a with thanks note in the living room but quite the contrary: stolen fixture and fittings, destroyed furniture, missing kitchen utensils, dog crap all over the place and to get even more scatological (and not joking here), walls and curtains smothered in human fecal matter. So who the hell would want to rent with this prospect??

According to this report, 50,5% of defaulters are males and 35,7% females, the rest being companies. By nationalities, 74 out of 100 are Spaniards and the rest Brits, Germans and Romanians, by this order.

This same law firm has privately compiled a database with 6,000 Court rulings where “non-complying” tenants are named (unfortunately not publicly shamed) and so for a modest amount of money (7.50 Euros) one can know if we are dealing with the right guy. Obviously not all bad payers are registered, but if they happened to be registered and to avoid 7.50 Euros we incurred in thousands in losses, one would not be happy at all. This database should be also by checked by a lanlord who has a defaulting tenant, for a tenant which has had two court cases for the same reason can be prosecuted for criminal swindle, as opposed to a regular eviction case.

Fortunately enough, the law of averages says that finding a defaulting tenant is not always going to happen, and so it is quite possible that you will be able to have a beer or two with your tenant at some point during your commercial relationship with him/her because he/she has decided to do what all landlords are praying for, i.e., just pay the rent.

With the new law hopefully the almost twelve months from filing to firing will be reduced to, say, three or four months, we can only hope!

Litigation, Property , , , , , ,