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Archive for September, 2009

Llanera Will be the First Spanish Developer to Exit Receivership

September 28th, 2009

As we had previously reported, an Administration Procedure does not equate to bankruptcy as some mistakenly repeatedly uphold. Receivership procedures in Spain are geared towards saving ailing companies which are undergoing temporary cash-flow problems. Throughout the Administration Procedure, and dependant on a Financial report drafted by experts, the Mercantile judge will rule on whether a company under administration should file or not for bankruptcy.

Developer Llanera was the first large Spanish developer to seek Creditor Protection back in 2007. It is fitting that it’s the first one to announce its clawed comeback. The Creditors’ General Meeting must ultimately give its approval tomorrow to the company’s proposal.

This is indeed welcome news for stressed creditors who are now bogged down in similar legal quagmires and have lost all hope.

Source: El Economista (http://www NULL.eleconomista NULL.es/empresas-finanzas/noticias/1571923/09/09/Llanera-primera-gran-inmobiliaria-que-saldra-del-concurso NULL.html)

Litigation, Property , , , , ,

Spanish Government to Raise Taxes

September 28th, 2009

Contrary to what would seem like reasonable Fiscal Policy in the midst of a deep recession, Spain’s Government has decided it will raise its Indirect tax, Value Added Tax or VAT.

It doesn’t take a degree in Economics to realise just how, errm to put it mildly, counterproductive this is to the broad Economy, more so in Spain’s case. With Consumer Confidence plummeting in Spain it would seem the Government should strive to incentivize spending, rather than curtailing it at every opportunity. Oddly enough and contrary to popular wisdom, that is exactly what it has announced last Saturday the 26th of September.-a tax raise leaving the door ajar to future tax raises…

With Spain’s Property Industry, which has long been Spain’s driving force along with Tourism, in the doldrums, with 5 million unemployed and reportedly steadily rising to unprecedented levels unseen since the days of the II Republic (1931), with a reported stock of between 1.6 to 3 million unsold houses (http://fistfulofeuros NULL.net/afoe/economics-country-briefings/three-million-unsold-properties-in-spain/) (both resales and new builds), with a Public Deficit spinning out of control adding 80 million Euros of debt everyday and with Consumer Spending spiralling downwards hitting fresh lows every month our Government decides that what is best needed by our countries’ ailing Economy is to …raise taxes; contradicting its much vaunted electoral promise of “lowering taxes”.

On Saturday the 26th of September it has been decided that as from next year 2010:

  1. The extended VAT of 16% is to be raised to 18%.
  2. The reduced VAT of 7% is to be raised to 8%. This is the tax that is levied on new builds (off-plans). The tax on resales remains unchanged. This is not welcome news by a struggling sector vying to unload a huge stock of unsold new build properties
  3. The super reduced VAT of 4% will remain unchanged.

One can only pray our Government will not raise even further our tax burden in such dire times. Lowering taxes is always the right path on the road to economic recovery which incentivates citizens saving and helps to attract Foreign Investments; both of which will be invested reactivating Consumer Spending which will ultimately lead to creation of new jobs, not to their destruction and the reckless public subsidizing of lost causes.

Property, Taxes ,

Reminder: Deadline to Join Aifos’ Creditors List Ends on September 30

September 24th, 2009

We would like to remind all of those buying off-plan from Aifos that the deadline to submit your request to join Aifos’ creditors list ends on September 30. All of those who have not done so already please contact your solicitor as soon as possible.

You will have to forward your solicitor the following:

  • Original Private Purchase Contract signed with Aifos.
  • Original bank statements as proof of the different stage payments paid to Aifos.

Those who fail to submit the paperwork on time will be left out of the creditors list and will lose every chance of recovering anything from their deposits.

If you don’t have a solicitor who can represent you, please contact us (http://www NULL.lawbird NULL.com/services/contact) urgently.

Litigation , , , , , ,

Spain’s Senate Petitions Government to Suppress “Floor Clauses”

September 23rd, 2009

For those who are wondering what on earth is meant by a “Floor Clause” (Cláusula Suelo), we had already reviewed them in detail in our article 10 Common Abusive Clauses in Spanish Mortgage Loans (http://www NULL.marbella-lawyers NULL.com/articles/showArticle/10-common-abusive-clauses-in-spanish-mortgage-loans) and in Antonio’s blog post Reduction in Mortgage Repayments Limited by Floor Clause (http://belegal NULL.com/blog-by-antonio-flores/reduction-in-mortgage-repayments-limited-by-floor-clause/).

A “Collar” clause is when the minimum interest rate to be repaid to your lender in a mortgage loan is capped i.e. 4,5%. So even if the Euribor rate heads below, you still have to pay the said minimum interest rate. These clauses are the very reason on why many borrowers are not benefitting from the historically low Euribor rate to which most Spanish mortgages are referred to plus a spread (diferencial). We had already anticipated last year in our post, Steep Drop in Euribor Translates into Cheaper Mortgages, that lower mortgage repayments were to be expected in 2009. Many borrowers which were gleefully expecting to lower their monthly mortgage repayments in 2009 have come to know and dread this obscure clause which was worded in their Mortgage Deeds unbeknownst to them.

We had criticised these clauses as being basically abusive to borrowers because they were one-sided. The public outcry has been echoed at last at the Senate this morning.

This initiative was fostered by Senator Mr Francisco Javier Vázquez who belongs to Spain’s Conservative party. The Senate has pleaded that these abusive clauses ought to be removed in compliance with Spain’s new law on Consumers’ Rights, Law 1/2007 (http://noticias NULL.juridicas NULL.com/base_datos/Admin/rdleg1-2007 NULL.html), which was enacted by the current Socialist Government.

It is estimated that this initiative, if upheld by Spain’s Socialist Government, would benefit an estimated two out three borrowers translating into cheapermortgage repayments.

Source: El Mundo daily newspaper. (http://www NULL.elmundo NULL.es/elmundo/2009/09/23/suvivienda/1253700997 NULL.html)

Spanish Mortgages , ,