Antonio Flores’ Blog

We all know fraudsters never sleep, just like money; in fact when our guard is down the fraudster can be at his most damaging.

And this is exactly what is happening as a result of the irresponsible press release issued by the Spanish Government last November, when they propagated the lie that they would be offering residency (automatic) for anyone who bought a property worth €160,000 and above.

The above innocent release triggered a desire by tens of thousands of potential buyers eager to move to this part of the world, whether to be able to start a better life away from war zones or potentially conflictive areas, move the family to better education or living conditions and where the choice was for the Coastal areas, get the enviably famous weather. For many too, it was a way to be able travel more effectively without the hindrance of waiting in queues to be dealt by unfriendly Consulate staff for visas and for a few, for reasons of privilege and even social status.

And confusion was compounded by ignorant journalists who mistook residency for “citizenship”.

So in the wake of all the above, professional conmen saw an opportunity to try to trick desperate families into buying a property and on the back of it, get permanent residency for all the family. One of such companies, Green Planet EU residency, most probably run by former timeshare resale scammers, is offering a package where you pay €220,000 and you get, for the privilege, a property and a residency card. To make things look legit, they resort to the Costa conman manual and pick novice lawyers generally based in Fuengirola to receive the payment (whether the lawyers are aware of the scam or not is unknown to us).

Far from it. There is no approved norm, law, act, ruling or otherwise, in Spanish law, that will allow you to get automatic residency by buying a property worth €160,000 and above, for one simple reason: it was never approved.

The latest move by the Spanish Government has been to announce that, after much consideration, they will grant residency to families buying a property worth €500,000 and above, as was approved on Friday the 24th of May. But beware, this pre-law has not been published in the official gazette (www.boe.es) so even after this press release, professionals in the sector need to be cautious because as of yet, buying a property over 500,000 (cash-no mortgage) will yet not secure residency, and it is not going to be retrospectively applied!

Antonio Flores Immigration, Scams Spain immigration, Spain property automatic residency, Spain residency

The Spanish Supreme Court has ruled that floor clauses can be deemed void where the bank failed to advise customers with clarity and transparency, establishing conversely that would be licit where borrowers were fully and adequately informed.

The high court analysed the clauses used by the bank BBVA and found them to be in breach of consumer regulations due to the following reasons:

• There is insufficient clear information that such clauses are material to the object of the contract.
• They were inserted together with “ceiling clauses”, which caps the loan interest rate, as if offered in exchange for the bank’s concession.
• The bank failed to offer examples on specific instances of interest rate behaviour.
• There is a lack of clear and comprehensible information in respect of cost comparisons with other loans offered by the lender -where there are others- or a warning that the borrower is not being offered others.
• In the case of BBVA, the clause is embedded within significant data that  disguises it and has the effect of diluting the attention of the consumer.

The Supreme Court has also found these clauses to have a perverse effect: they created the false appearance that the lower the Euribor, the lower the mortgage repayment (it was thus just an amiable facade).

Customers in the above scenario are now in a position to succesfully challenge such clauses although, as was made clear by the Supreme Court, the ruling does not have a retrospective effect.

Do you have one of such clauses in your mortgage loan contract? Have you calculated how much you could save by having it removed?

Antonio Flores Litigation, Mortgages, Property Abusive Clauses, BBVA, Caixa Nova Galicia, Cajas Rurales Reunidas, Floor Clauses, La Caixa, Santander, Spanish mortgage borrowers, spanish mortgages

Newspaper ABC has exposed a worrying trend: since 2007 110% more of eligible heirs to Spanish inheritance have renounced to their portion of the estate because there is more debt than equity to inherit.

According to the Notarial Council General, it’s a shame that so many people take the route of renouncing the inheritance, without knowing whether indeed the liabilities exceed the assets, just because it is not possible to have a clearer picture of the financial situation of the deceased prior to going in front of a Notary.

But Spanish Notaries remind us that the Spanish Civil Code has a solution for this: to inherit subject to “benefit of inventory”. This allows the inheritor to have the right to obtain the exact situation with the estate of the deceased testator prior to becoming a full inheritor but at the same time, accepting the designation if finally, there are assets worth inheriting. In other words, debts that are inherited will be covered by assets from the estate, not the inheritor.

For example, beneficiaries of a will written by victims of banks implicated in the Equity Release fraud are advised to choose this route to avoid becoming personally responsible for the mortgage loan that was sold fraudulently as the miracle product against Spanish Inheritance Tax.

This method of inheriting also allows inheritors to litigate against creditors (banks for instance where miselling took place) without becoming personally liable for it.

Finally, if all inheritors renounce to the inheritance, the Spanish State will be eligible to receive it although, subject too to debts not being higher than the part of the estate that is really worth something!

Antonio Flores Inheritance, Litigation herencia beneficio inventario, spanish inheritance tax, Spanish Succession, Spanish Wills

In this video blog I talk about bank guarantees and the responsibility of financial entities that consented property developers use their bank accounts to collect deposits, without ensuring that those deposits were guaranteed. In this instance, the bank applied the 57/1968 Act which stipulates that “banks will ensure under their responsibility, prior to opening a special account for a property developer, that a guarantee has been taken out.”

Some interesting case law can be read here.

Antonio Flores Litigation Act 57/1968, Aifos, Banco popular, El Pinet, Enforcement guarantees, Execution bank guarantees, La Caixa, La Fortuna, Offplan property, Spain bank guarantees