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The Spanish Lawyer Online
The Spanish Lawyer Online

Antonio Flores’ Blog

Thoughts about laws and regulations which affect foreigners in Spain


Archive for December, 2008

Mortgage Moratorium: Much Ado About Nothing

December 30th, 2008

When reading the pompously titled Royal Decree 1975/2008 (Spanish PDF) – Urgent Measures to be Implement in Respect of Economic, Fiscal, Labour and Access to Property Measures -, one thinks that we are opening a bag full of tax discounts and exemptions, job creation proposals and even formulas on how to bring in more business.

The reality is disappointing for when we look into these proposals only one really stands out of the crowd: the temporary and partial mortgage moratorium, limited to a maximum of 50% of the mortgage repayment (or €500) on a €170,000 mortgage, for unemployed at least since 3 months prior to applying for this help, whether salaried or self-employed and also, for the latter group, if they are earning less than approximately €1,500  in the last 3 months (or less than 3 times the minimum approved salary).

But if we then read carefully article 3 of the decree it states that “in any case the application of the measures herein contained will be subject to a prior agreement between the lender and the borrower”, which means that the above will be applied only if the bank wants to! And in anyone’s experience, how many times have we been offered help by a bank?

In summary, the Socialist Government is engaged in a superhuman effort to publish useless bits of legislation which are either always very difficult to benefit from because of the bureaucracy involved, are subject to third party agreement or simply are just not envisaged to save money (like this mortgage moratorium).

Zapatero has not realized yet that Spain was built on bricks and mortar and that he just cannot change the origin of the wealth and prosperity this country has enjoyed in the last 10 years. If he does want the economy to kick start again he better be thinking how to reduce the horrific taxes and costs associated with buying property (which in the worst case scenario go up to 11% of the purchase price) and then gradually try to base growth on a different economic model.

Property ,

Spanish Express Eviction Law Pre-Approved

December 24th, 2008

safe-rental1At last the Government has pre-approved a law proposal (PDF-Spanish) to encourage property owners to rent out their properties. Even though property sales have slowed down substantially, the property rental market is not increasing, and a staggering 2.8 million properties in Spain remain empty. 

The proposed changes will mainly target the excessive length of proceedings (which in some instances can take up to 12 months) to enforce an eviction process. Below is a summary of the main law changes to be approved in due course:

  • Notice of payment prior to going to Court is reduced from 2 months to 1.
  • The Court proceedings are now conducted via an equivalent to a small claims court procedure and are therefore a ruling can be reached in a couple of months (depending on the specific Court).
  • The Court ruling will now be enough to evict a tenant and will be enforced within 30 days, without having to execute the ruling (whereas before the ruling was not automatically enforceable as the landlord had to instigate this action). If the tenant cannot be found the ruling will be notified in the notice board which each Court has and will proceed to send the bailiffs.
  • Landlords will be able to demand return of the property if they need it not only for their own use but for that of parents and children. This clause will have to be inserted into the contract in order to be enforceable.

It will be interesting to see how these measures, in addition to others, bring dynamism to an otherwise stagnant market and, more importantly, if the court system will be able to cope with the expectations these changes will introduce.

Uncategorized , , , ,

Putting up a Debtors List in The Community of Owners Public Areas is Illegal

December 1st, 2008

shame2We have been recently approached by a client asking whether sticking ones name on a list of debtors for Community fees is a legal thing to be done by the President or the administrators office.

In the particular case the President considered that these debtors have to be named and shamed as if we were in the time of the Spanish Inquisition as in his opinion this was the only way to make owners pay.

In a case identical to the one above, the Data Protection Agency contended that the information of debtors published on a notice board allowed the public (neighbours but also outsiders) to know information on the personal financial situation of the claimant which should have been kept secret by the administration office so that only the co-owners of the complex could access such information. The Community of Owners was consequently fined with 601 Euros and will presumably demand this money from the President.

In our case we have urged our client to send a clear warning to the “President” advising him that he is in breach of the Data Protection Act and that a similar illegality was fined with € 601 by the Data Protection Agency although the fine could be stretched to a maximum of €60,101, which is what the Act stipulates.

Property , ,