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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche.
www.costaluzlawyers.es

Legal tip 567. Dation is a right, of course it is
20 July 2011

 I differ from these points who say that dation is not a aright. And our Civil Code differs too.

 Through dation, considering the value the Bank gave to the property, you have the right of liquidating your debt by returning the house to the Bank.

This is a post we wrote on this in January 2009: http://www.eyeonspain.com/blogs/costaluz/1094/legal-tip-27-dation-in-payment-a-right.aspx

If you defauledt and are on arrears, there are still possibilities, before they start the repossession and even after this: some Banks actually prefer the house to be in arrears for accepting the dation.

Even after being noticed of repossession, the repossession procedure can be contested through a dation- covenant for payment answer. I am sure many judges will sympathise.

Info about Last Decree on auctions after repossessions, here

KIndest kindest

Maria

 



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Legal tip 566. Banks are guardians of buyers´interests in off plan
19 July 2011

Two Contract Law Professors of Cadiz and Seville Universities which are part of our team  agree that liabilities of the Banks that receive deposits in off plan purchases can be claim against just provided we can locate money transferences being made to a Bank account held by a developer, even when there is no reference to development and unit and even if the private purchase contract for which those deposits were paid, do not mention about Law 57/68 nor the specific Bank account.

They both also agree that there is no such a thing as formal special account and when Law 57/68 talks about “special” means an account which is being “separated, differentiated”  of any other account held by the developer. Supreme Court in Spain has reiterated in a good number of occassions that the set up of a “ special” Bank account is an obligation of developer and bank and therefore, the lack of this, can never be detrimental to buyers. (Supreme Court decisions dated 22nd of September 1997, 1st of December 1998, 15th of November 1999, 8th of March 2001 and 19th of July 2004)

Navarra Supreme Court dated 22 of December 2008, which has the same value as Supreme Court ones declared that it is the developer who needs to deposit these amounts in a Special Account and the Bank needs to request the developer to do so and to mention this account in the sales contract. The Bank also needs to request the developer to obtain the necessary guarantees.

The Bank which receives deposits for off plan purchases has two obligations by law: 1) to separate developer´s  own funds  from funds paid by buyers as advanced deposits 2) to require the developer to obtain the necessary guarantees to protect these deposits.

Any breach of these obligations turns into a refund devolution by the Bank.

It is a very simple idea: Banks which received deposits are liable for refund if the building is not started or finished on time and the Bank Guarantees were not constituted. This comes from provision 1.2 of Law 57/68.

Valladolid 3 Court Decision 180/2010, in its legal argument number four also mentions the obligation of the Bank to request the hiring of the Guarantee according to what it is established in provision 1.2 of Law 57/68.

 Court of First Instance 57 in Madrid in a Court Decision dated April 2010 establishes that the receiver Bank, knowing  that the amounts of the account were advanced deposits for off  plan purchases,  should have request the developer to meet the legal obligations established in that Law ( separated account, constitution of Guarantees. As the Bank did not perform this duty, the receiver Bank is jointly and severally liable with the developer for the refund of advanced amounts plus legal interests.

Enough with a general Bank Guarantee

Regarding a different type of liability of Banks in off plan purchases, that liability attached to the issuing of a Guarantee, Vélez-Málaga 1 and Burgos Appeal Court has also established that once there is a general Bank Guarantee,  individual claimers can claim their deposits back from the Bank who issued those general Bank Guarantees, despite the  non existence of individual certificates of Guarantees.

BANKS FOR PEOPLE: HEALTH FOR ECONOMY



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Legal tip 565. Business flashes in sunny Spain
14 July 2011

 Upcoming proffessional to Spain http://www.eyeonspain.com/blogs/costaluz/2902/legal-tip-228-upcoming--proffessionals-to-spain.aspx

Legal obligations of the manager of a company http://www.eyeonspain.com/blogs/costaluz/2987/legal-tip-234-manager-of-a-company-legal-obligations.aspx

Why SL or autonomo worker? http://www.eyeonspain.com/blogs/costaluz/2995/legal-tip-235-self-employed-or-limited-liability-company.aspx

Bilingual nursery http://www.eyeonspain.com/blogs/costaluz/3054/business-tips-1-a-bilingual-nursery-in-spain.aspx

Property management companyhttp://www.eyeonspain.com/blogs/costaluz/3066/business-tip-5-a-property-managment-company.aspx

Rural Bed and Breakast http://www.eyeonspain.com/blogs/costaluz/3113/business-tip-6-how-to-set-a-rural-bed-and-breakfast-in-spain.aspx

Freelance English teacherhttp://www.eyeonspain.com/blogs/costaluz/3183/business-tip-7-freelance-english-teacher-in-spain-no-vat.aspx

Golf events organizer http://www.eyeonspain.com/blogs/costaluz/3184/business-tip-8-golf-events-organiser-company-low-expenses-involved.aspx

Researcher http://www.eyeonspain.com/blogs/costaluz/3207/business-tip-9-ancestral-research.aspx

Companies in new Tanger Port http://www.eyeonspain.com/blogs/costaluz/3210/business-tip-10-companies-within-the-t%C3%83%C2%A1nger-med-port.aspx

IT company http://www.eyeonspain.com/blogs/costaluz/3233/business-tip-11-a-company-for-internet-design-website-ranking-strategies-and-the-internet-market.aspx

Tourism and Housinghttp://www.eyeonspain.com/blogs/costaluz/3343/business-tip-12-tourism-and-housing-in-spain-2010-part-i.aspx

Adapting a Spanish village for English teaching http://www.eyeonspain.com/blogs/costaluz/3381/business-tip-13-adapting-a-spanish-village-for-english-language-teaching.aspx

The video above is a revival of Verano Azul, a very popular TV serie of the 80´s in Spain



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Legal tip 564. Rental of a room: legals and a business oportunity
13 July 2011

 Rentals of rooms are regulated by the General Rules of the Civil Code, which means that they are not under the prescriptions of the Urban or Rural Rental Acts. Therefore the autonomy or freedom of the parties´wills are by force of provision 1255 of the Civil Code, Law between them.

1255 of the Civil Code establishes that parties can mutually agree any pact, clause or condition they find as convenient with the only limts to Law, Morals and Public Order

Generally, aspects regulated by room rental contracts are:

- Price

- Furnitures of the room included

- Bathroom/kitchen use

- General Rules of Living together

- Cancellation rights

- Deposits

This type of contracts have been traditionally very commun for students and are now more and more IN  to the touristic sector too. I see it as a modern way of promoting nice, human, family oriented tourism, also well priced and culturally inserted.

Internet keeps opening gates everyday. Someone willing to start a company for management of these exchanges? 

 



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Legal tip 563. Gratuity and solidarity of Spanish lawyers
12 July 2011

 I received a great lesson from a colleague today:

She is a great Family Lawyer in Town and also a neighbour of mine. One of our commun neighbours, Sandra, is having very difficult financial and personal times due to a complicated divorce.

I do not deal with divorces and found our neighbour was in Lola´s hands much better than in my own ones so we called Lola for a consultation.

She has been kind and generous enough to  spend a couple of her proffessional hours this morning advising, encouraging and protecting this commun neighbour. For free of course. As matter of good  vicinity. 

At the end of the consultation, we all felt to strenghtened  and  commented on how rich we spaniards are in terms of human and social care.

There are hundreds of good lawyers as Lola is.

Cheers for her!

Maria

Chiclana, Costa de la Luz, by Vigabriel at Flickr.com



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Legal tip 562. Supreme Court on Special accounts and Law 57/68
11 July 2011

A recent Court decission by Madrid Appeal Court quotes several ones of the Supreme Court on Law 57/68 and the meaning or dis-meaning of "special accounts"

The Supreme Court affirms that the sole conditions for Law 57/68 to display all its effects are that (1) amounts are advanced in off plan purchases and  (2) the building is not started or finished.

It is clearly a matter of guarantees when the object you are paying for  does not exist yet. Supreme Court sees it crystal clear.

What these Supreme Court decissions say is that Law 57/68 protections are about guarantees for buyers when the object you are advancing money for it does not exist yet. The Supreme Court also affirms that the effects of Law 57/68 do not rely on money being deposited in one or another kind of account.

Come on with the formalities Banks! You have had all the business and none of the risks. It was just becuase of the credit crunch that you provoked that you have not had the huge benefits you proyected! 

Any discussion or irregularity regarding the deposits of amounts in special accounts can never go against the buyer as this business is completely foreign to him and therefore it is something that needs to be discussed between developer and guarantoor with no impact on rights to buyers included in law 57/68

So, once you have paid advanced amounts and building have not started/finished on time, you do have all the rights that Law 57/68 establishes as essential, public order class and inalienable.

El Palmar beach ( Costa de la Luz), Cádiz by Viktor. Moulet at Flickr.com



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Legal tip 561. Now it is the momentum for Spain
10 July 2011

 Is this what you personally was looking for when thinking of moving/ holidaying/ retiring in Spain?

- Calmer life

- Better weather

- Closer human relationships

- Good cheap gastronomy

- Welcoming environment

- Smiles

- Parties, great summer nights

- Conversation, friendship

- Positive sense of life

- Community oriented spirit

- Good health protection

- Good schooling possibilities

- Reasonable access to University

(....)


Even if you found a real estate disaster which was caused not just by Spain or spaniards alone, but because of the confluence of many factors as described here .....

I assure you...

...Spain is still all that..

...and that you can find good prices of finished houses now...

Maybe now it is the moment... it was not 6-8 years ago due to the euro´s inmaturity.

Chipiona waterfront. Costa de la Luz, Spain by qwghlm at Flickr.com

 



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Legal tip 560. New Decree... when about Law 57/68?
08 July 2011

New Decree published yesterday: Safety for real estate transactions… what about reform of law 57/68?

These are some of the modifications recently established by the Government on real estate transactions safety:

·       Negative meaning of silence if f Administration does not answer on licenses files within 3 months from application.

·        No deed declaring the end of works of a new building will be registered if there is no First Occupation License

·        Obligatory recordind in the Land Registry of Planning sanctions processes for the protection of good faith third parties

What about reform of Law 57/68 and legal clarification of liabilities of Banks established in provision 1.2 of that law? When? It is good the clarification is happening through Case Law though!! Good for brave Judges!

Costa Ballena, Costa de la Luz by Mirindas 27 at Flickr.com



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Legal tip 559. Banks in America pioneering again
05 July 2011

 

Consumer Law & Policy Blog

Link to Consumer Law & Policy

Would you modify a loan before default?

Posted: 04 Jul 2011 01:08 PM PDT

The New York Times reports that Bank of America and JPMorgan Chase are sending notices to some of their borrowers with high risk loans modifying the terms of the loan and reducing the principal due on the debt. Not much news worthy here, except, the letter is sent to borrowers who have not defaulted or requested a modification. The banks are proactively overhauling loans for borrowers who have so-called pay option adjustable rate mortgages, which were popular in the late stages of the housing boom but which banks now view as potentially troublesome. In almost all case, these borrowers are substantially under-water. In one reported case, a borrower was told the amount she owed had been cut in half. The bank cut her principal by $150,000 while raising her interest rate to about 5 percent. Her payments would stay roughly the same. She had not complained to the bank about the amount of the loan, had not defaulted, and reported that she would not have defaulted. 

I am not an economist, nor a banker, but as crazy as this sounds it may make sense. Most of these mortgages are possible problem loans acquired through the purchase of troubled banks.  I assume the banks can determine approximately how much they have invested in each of the loans, and perhaps this move is simply a way to insuer they get back at least that investment, plus a higher rate of interest. Waiting until default might not result in a similar result. Debtors in default have already ruined their credit, and have less incentive to work out new terms. They may in fact have already made the decision to move. Working with those debtors may also impose substantial costs on the banks, in terms of staffing. This proactive strike may seem like throwing money away, but it fact could an efficient way of protecting an investment. A move that could benefit both banks and consumers.

"Golf Club La Alcaidesa", by Luis López-Cortijo

 



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Legal tip 558. New decree on auctions
04 July 2011

On the 1st of July, the government approved the decree by which minimum value estate assets can be repossessed by Banks is of 60% of valuation for mortgage. Initial deposit to be part of an auction was also lowered by the Government from 30% to 20% in order to increase the participation in auctions.

The part of the salary that cannot be seized is raised from 700€ to 960€. If the debtor is in charge of dependant members of the family, the non sizeable amount rises 30% for each of these members.

Interesting how the preamble of the decree states that the auction of assets will never drive to abusive situations or under selling of goods.

Online auctions are being promoted.

Barrosa beach. Chiclana, Costa de la Luz by DIOS_MIN at Flickr.com



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Legal tip 557. Decree for Breath for mortgage debtors
01 July 2011

The Council of Ministers has approved the rising from 705 to 961 Euros the non-seizable  family income in foreclosure, following the announcement of Prime Minister Jose Luis Rodriguez Zapatero on Tuesday's debate. The minimum is 1,300 Euros if the debtor has two people without regular income at your expense. It will be made through a decree law, which shall be effective as soon as it is published in the National Gazette.

 

 

Sunset in Chiclana Beach. Costa de la Luz. by Sergi Gisbert at Flickr.com



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Management tip 42. Not just growth but...
01 July 2011

 In the life of a company like in the life of any other entity ( person, family, community...) not all is about  growth and productivity.... and we need to consciously give room to gratuity.



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