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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 404. Basics on the European Enforcement Order
30 November 2010

From EU summaries of Legislation website

 

European enforcement order for uncontested claims

The Regulation creates a European enforcement order for uncontested * claims *. Thanks to the introduction of minimum standards, the instrument allows the free movement of judgments *, out-of-court settlements or authentic instruments * concerning uncontested claims in all the Member States. It is no longer necessary to use an intermediate procedure in the Member State of enforcement * prior to recognition and enforcement.

ACT

Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims [see amending acts].

SUMMARY

The Regulation creates a European enforcement order for uncontested claims. It lays down minimum standards to ensure that judgments, court settlements and authentic instruments on uncontested claims can circulate freely. This entails the abolition of exequatur, i.e. the automatic recognition and enforcement, without any intermediate proceedings or grounds for refusal of enforcement, of judgments handed down in another Member State.

Scope

The Regulation applies in civil and commercial matters. It does not, in particular, cover revenue, customs or administrative matters. It is applicable in all Member States with the exception of Denmark.

European enforcement order

A judgment on an uncontested claim is certified as a European enforcement order by the Member State of origin * in accordance with certain conditions. Certification is carried out by means of the standard form. The certification may apply to only parts of the judgment, in which case the order will be known as "partial European enforcement order".

A judgment that includes an enforceable decision on the amount of costs related to the court proceedings may also be certified with regard to the costs unless the debtor has specifically objected to his obligation to bear such costs. The certificate can also be rectified if there is a discrepancy between the judgment and the certificate, or withdrawn where it was clearly wrongly granted. Nor is there any appeal against the judgment relating to certification. The certificate takes effect only within the limits of the enforceability of the judgment.

Minimum standards

The court proceedings in the Member State of origin must meet certain procedural requirements for a judgment on an uncontested claim to be certified as a European enforcement order.

The Regulation lays down minimum standards with regard to the service of documents (the document instituting proceedings and, where applicable, the summons to a court hearing) to ensure that the rights of the defence are respected. Only the document service methods listed in the Regulation are allowed if the judgment is to be certified as a European enforcement order.

Furthermore, the document instituting proceedings must give details of:

  • the claim (personal details of parties, amount of the claim, whether or not interest is incurred and for what period, etc.);
  • the procedural arrangements required for contesting the claim (deadline for contesting the claim, consequences of failing to object, etc.).

The Regulation allows non-compliance with these requirements to be remedied, subject to certain conditions. For a judgment to be certified as a European enforcement order, the Member State of origin must provide for review in exceptional cases.

Enforcement

Enforcement procedures are governed by the law of the Member State of enforcement. The creditor must supply the authorities responsible for enforcement in the enforcing Member State with:

  • a copy of the judgment;
  • a copy of the European enforcement order certificate;
  • where necessary, a transcription of the European enforcement order certificate or a translation thereof into the official language of the Member State of enforcement or into another language accepted by the Member State of enforcement.

No security, bond or deposit can be required of creditors on the ground either that they are foreign nationals or are not domiciled or resident in the Member State of enforcement.

The competent court in the enforcing Member State may, subject to certain conditions, refuse to enforce a judgment if it is irreconcilable with an earlier judgment given in any Member State or in a third country. In certain cases, it can also stay or limit enforcement.

Final and general provisions

All the information needed to apply the Regulation will be communicated by the Member States to the Commission, which will publish it. In addition, in order to facilitate access to enforcement procedures and related information, the Member States undertake to provide the general public and professional circles with relevant information within the framework of the European Judicial Network in civil and commercial matters.

Creditors remain free to seek recognition and enforcement of a judgment under Regulation (EC) No 44/2001. Moreover, this Regulation does not prejudice the application of Regulation (EC) No 1348/2000.

The Regulation is applicable from 21 October 2005. Following the accession of the new Member States on 1 May 2004, the annexes to the Regulation were replaced by Regulation (EC) No 1869/2005 so as to adapt the standard forms for use in those Member States.

Key terms used in the act
  • Judgment: any judgment given by a court or tribunal of a Member State, whatever the judgment may be called.
  • Claim: a claim for payment of a specific sum of money that has fallen due or for which the due date is indicated in the judgment.
  • Uncontested: the debtor has not objected to the claim in the course of court proceedings or has not appeared in court or has expressly agreed that the claim exists and is justified in the course of court proceedings, including by means of a settlement or in an authentic instrument.
  • Authentic instrument: a document formally drawn up as an authentic instrument or an arrangement relating to maintenance obligations.
  • Member State of origin: the Member State in which the judgment to be certified as a European enforcement order has been given.
  • Member State of enforcement: the Member State in which enforcement of the judgment certified as a European enforcement order is sought.

REFERENCES

Act Entry into force - Date of expiry Deadline for transposition in the Member States Official Journal
Regulation (EC) No 805/2004 21.01.2005 - OJ L 143, 30.04.2004

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1869/2005 24.11.2005 - OJ L 300, 17.11.2005



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Legal tip 403. Legals for rentals IX. What happen with the rental contract if I die?
29 November 2010

 


Subrogation is the sucession of one person for another one in the rental which implies the assumption in all the rights and obligations held by that. The substitution can be performed on tenants or on landlord’s rights.
 
Subrogation on the landlord’s rights happens when the owner sells the rented house to a third party. In these cases, the buyer has to fully respect the clauses of the rental contract, which will be valid until the termination of the rental period.

Subrogation on the tenant’s rights happens in different cases:

1) By death of the tenant: this death does not imply the extinction of the rental contract as there are several people who can assume/subrogate it:

  • Spouse of tenant or union fact partner who was living with the tenant at the moment of his death. Two years of proven live co-habitation is necessary in the case of union fact partners. (Co-habitation is proven through the Padrón Municipal (Official  Census Record of the town ) 
  • Descendants under the parental rights and duties or under tutelage of the tenant or in the case of two years of proven con-habitation before the death of the tenant. 
  • Ancestors, brothers and sisters of the tenant who had habitually lived with him during the last two years of his life.
  • Those other people 65% or higher handicapped, who has a kinship as niece, nephews,  aunt or uncle of the tenant and have been living together during the last two years

The order of the list above is used to determine the best right, when there are more than one of the aforesaid people holding a right to the subrogation:  Parents over 70 years old have a priority over descendants. 

In some circumstances priority is for: 60% or higher handicapped, those with family responsibilities and finally the younger descendant, the older ancestor or the younger brother/sister.

If there is no one to subrogate the contract, it will be cancelled.

Cancellation will happen too if the death of the tenant and the identity of the subrogator are not communicated to the owner within 3 months from the death of the tenant.
  
2) By marriage separation, divorce or nullity. If the house was the matrimonial domicile and it is granted by the judge to the spouse who is not the tenant. Needs to be communicated to the landlord in two months time

Casares by deanka at Flickr.com



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Legal tip 402. Legals for rentals VIII. Cancellation of rental contracts.
26 November 2010

 

First cancellation cause of a rental contract is the expiration of the rental period.

It must be commented that, even when parties can freely establish the duration of the contract, if the agreement was for a period under 5 years, the tenant can stay at the house up to the 5 years period, without any possibility of valid opposition by the landlord. After this period, the landlord can communicate to the tenant on his cancellation will.

Secondly, both landlord and tenant can ask for the cancellation of the rental contract if they fail to meet their respective obligations.

This way, landlord can cancel the rental contract if the tenant: 

  • Failed to pay the rent or the guarantee.
  • Subletted or assigned the house to a third party without the consent of the landlord.
  • Caused intentional damages to the house or made works without the consent of the owner.
  • Performed annoying, unhealthy, noxious, dangerous or illegal activities in the house.
  • Stopped occupying the house as a first place of residence.

The tenant can cancel the rental contract if the landlord:

  • Didn’t make the needed reparations to keep the house in the appropriate habitability conditions.
  • Disrupted the tenant when using the house.

Finally, the rental contract can also be cancelled if the house is destroyed by causes beyond the control of the tenant (for instance, an earthquake) and because an official declaration of the house as a ruin done by the competent authority.

White Village in Spain by Dirk Huijssoon at Flickr.com



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Legal tip 401. Legals for rentals VII. The sale of a rented house
25 November 2010

Sale of a rented house. Pre-emption and buyout rights 

If the owner of a rented house wants to sell it he must offer the sale to the tenant first, indicating to him the price and the rest of the sale conditions. 

The tenant has a preferent buying right over the house: pre-emption, and will have 30 days to opt for the purchase. 

If the owner doesn’t make the offering to the tenant and sell the house on his own at a price lower to the communicated one, or break any of the requirements, the tenant can challenge the sale and buy the house under the same conditions this was sold to the third party. This is called buyout right and can be practised by the tenant in 30 days time from he receives the notification of the sale of the house.

The agreement by which a tenant renounces the rights of pre-emption and buyout will be valid if the contract has been signed for a renting period over five years.

The tenant will not have the pre-emption and buyout rights if the rented house is sold together with the rest of houses/ premises owned by the landlord belonging to a same estate or if the common owners of a estate sell to the same buyer all the apartments and premises belonging to that estate.   

The buyer of a rented house acquires the same rights and obligations of the seller, therefore he is obliged to respect the conditions of the contract till it reaches 5 years of rental period. Cancellation can be performed after this period.

 

Mojacar Pueblo by Shehani at Flickr.com



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Legal tip 400. Legals for rentals VI. Improvement works. Who pays them?
24 November 2010

Improvement works relate to hygiene, healthiness and comfort of the house and of the people who live in it.
 
If these improvement works cannot be postponed until the end of the renting period, the tenant will have to tolerate them as the maintenance works. If they last for more than 20 days, the tenant will have a right for the reduction of the rent in a proportion equal to the part of the house which is not habitable due to the works.

In these cases, the owner needs to notify the content, starting date, duration and costs of the works to the tenant 3 months before the start of them.
 
Once notified, the tenant can cancel the contract in one month’s time, unless the works scarcely affect the house. If the tenant wants to cancel, the cancellation will take place within the next two months. Works cannot be started until these two months pass.

If the tenant wants to bear the works, he will be entitled to a reduction of the rent in an amount proportionated to the part of the house which becomes inhabitable due to the works, and is also entitled to a  compensation due to the expenses derived as a consequence of the works.
 
The tenant cannot operate without the landlord’s consent (expressed in written), those works which modify the configuration of the house and its accessories, or which produce less stability or safety in the house.
 
In both cases, the landlord can ask the tenant to put the house back to its original state. 

Finally, the handicapped tenant can make all the necessary works to fit the house to his/her special needs or those of the  spouse or relatives living with him/her. After the rent period, if that is required by the landlord, they need to replace the house to its original state.
 
If the landlord makes improvement works in the house (once the 5 years of contract validity passes) he will be entitled to the increase of the rent unless parties agree on the contrary. The increase cannot be higher to the 20% of the rent.

Doorway to a pottery store in a White Village, Spain by today is a good day at Flickr.com



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Management tip 35. PostCrisis values:simple proposals XXVIII: DO NOT MISS THIS ONE
23 November 2010

10 Business Lessons From the World Cup

Berrone, Pascual

 

 

 

 

Publisher: IESE

Original document: Business lessons from the Soccer World Cup

Year: 2010

Language: English

 

When Spain’s national soccer team became world champions for the first time at the World Cup 2010, team captain Iker Casillas acknowledged that their awareness of people back home “going through bad times” had served to strengthen their resolve to win.

In his working paper, “Business Lessons From the Soccer World Cup,” IESE Prof. Pascual Berrone analyzes the key features of the team’s success, and suggests 10 ways in which business owners and managers can likewise raise their own game by learning from this example.

1. Collective pride instead of individual egos. Soccer, by nature, requires teamwork. While big egos are common, long-term success is built on a strong team ethic. Some teams bank on the ability of one star player. Spain stood out for its feeling, not only that all the players were important, but that no one was indispensable either. Companies should remind themselves that teamwork and group pride are essential for success.

2. Balance between youth and experience. The Spanish team, with an average age of 26, had just the right mix of talented youth and more experienced players. Teams that rely too much on youth often lack the experience needed to flourish. On the other hand, older teams – such as Italy’s 2010 side – are unable to withstand the physical demands of the tournament. For companies, having a balanced team enables constant rejuvenation, the transfer of knowledge from seniors to juniors, and takes advantage of youthful irreverence and elder wisdom.

3. Solid leadership. One essential part of Spain’s success was its 60-year-old national coach, Vicente del Bosque, who brought discretion, calmness and patience to the role. Firms, like soccer teams, often struggle due to an absence of strong leadership. Perhaps one of the greatest challenges of this century will be finding gifted leaders who are willing to break with the traditional practices of long-tenured executives.

4. Dream big and believe in it. Coverage of the World Cup consistently reported on the Spanish players’ high level of self-belief. Of course, dreaming big does not, by itself, guarantee a big win. What made the difference was that, for the first time ever, Spanish players seemed to think the dream was attainable. The same goes for companies. In order to develop a genuine dream for the company, there must be a shared mission that is bold and big on passion, yet grounded in reality.

5. Internationalization and professionalization.
Spanish teams have traditionally relied on attracting the finest foreign players as a means of reaching the highest levels of competition. This, in turn, forces local players to raise their own game. This virtuous circle of professionalization has had a huge, positive effect on the national team’s technical level. Frequently, certain firms – family businesses, in particular – tend to avoid the professionalization process, because they fear change. As a result, they miss out on potential benefits, including enhanced performance and greater longevity.

6. Leverage competition.
Decades of fierce competition between Spain’s two biggest clubs, Barcelona F.C. and Real Madrid, have led to higher levels of competitiveness, both at the club and international level. Indeed, Barça and Real Madrid accounted for more than 50 percent of the players in the Spanish squad. It is often forgotten that competition can have positive effects on company performance, leading to more innovation, productivity and growth. As former Pepsi CEO Roger Enrico once said, “If Coca-Cola didn’t exist, we’d pray for someone to invent it.”

7. Faith in strategy. Spain’s fast-paced, creative style of play meant it could pick other teams apart with relative ease. More importantly, Spain – unlike the other teams in the competition – always kept the same style, regardless of circumstances. Firms, like soccer teams, must accept that good strategies often take time to crystallize. Results don’t always come with the first try, and patience is vital in achieving long-term goals.

8. Ability to overcome adversity. Spain is the first country to lose the opening game and still go on to win the World Cup. This was the result of strong morale, a collegial atmosphere and a profound passion for what they were doing. Disappointing results are just as common in business, but you can overcome them, if you have passion.

9. Do not let dependency dictate your future. After so many decades of World Cup disappointment, the Spanish team could have been forgiven for succumbing to defeatism. But while history matters, past results are not necessarily good predictors of future performance. Business executives need to challenge the belief that path dependency is hard to break, and acknowledge that experiences from the past are not necessarily the best recipes for the future.

10. Societal support. A key external factor in the Spanish team’s triumph was the strength of the support it received from the general public. This support was based largely on the victory at UEFA Euro 2008, which gave people reason to believe that bigger things were possible. Social acceptance is equally important for companies. When firms conform to social expectations, the broader public grants its acceptance, allowing the company better access to resources, improved exchange conditions with its partners, better ability to innovate, and enhanced corporate image and reputation.

 



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Management tip 34. PostCrisis values:simple proposals XXVII
23 November 2010

The "Seises" in Seville is a tradition that dates back to the XVIIth century.

 

 

 

Commentaries found on the web today regarding the " Seises" say that the kids are taught: personal contribution, collaboration, respect to others, order and cooperation...

All in life is an oportunity to grow as individual persons and members of our communities. Company life too.

If a company´s practise is not good for the life of every single individual worker, it is not good for the company.

The CostaLuz lawyers team



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Legal tip 399. Legals for rentals V. Maintenance works. Who pays them?
23 November 2010

Within the rental life, two different kinds of works need to be differentiated: necessary or maintenance and improvements

A. Maintenance works
 
The landlord needs to make all those repairs needed to maintain the house in habitable conditions unless the deterioration has been caused by the tenant, or the house has been destroyed by force majeure not chargeable to the tenant (fire, inundation, earthquake, etc.) and that causes the extinction of the contract. The landlord cannot increase the rents in these cases. 

Little reparations due to wear and tear caused by the ordinary use of the house must be paid by the tenant.
 
If there are some needed repair works to be done in the house and they cannot be postponed until the letting period finishes, the tenant will have to tolerate them; if the works last more than 20 days, the tenant will have a right to the decrease of the rent proportionally to the part of the house which is not habitable/usable due to the work.
 
If there are works which are urgently needed in order to avoid serious and immediate damages, these can be carried out by the tenant, provided that is fully communicated to the landlord. The tenant will have a right for the reimbursement of the amount paid for these urgent works.
 
If the maintenance works have been ordered by the competent Authority and they make the house inhabitable, the tenant can suspend or cancel the contract with no compensation.
 
The contract suspension means that both the renting period and the rent obligation are stopped until the end of the works.

 White village, Spain by today is a good day at Flickr.com

 



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Legal tip 398. Legals for rentals IV. Expenses: who pays them?
22 November 2010

Expenses. Who pays them?

General expenses derived from regular use of the house (community of owners’ fees, pool, elevators and garages, watchfulness services, etc.) needs to be paid by the landlord unless the parties agree on the contrary in the rental contract.

Expenses coming from individual services (water, gas, telephone, electricity…) need to be paid by the tenant unless the parties agree on the contrary. These expenses are also called “rent assimilated amounts”.

Arcos de la Frontera by Jelle Oomstrong at Flickr.com



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Legal post 397. Tax exemption for the sale of habitual dwelling
22 November 2010

An answer to a EOS member today:

Dear Anne:

Your answer:

You need to be a resident.

Capitals gain on the sale of habitual residency are exempt for:

- people older than 65 years old 
- people under serious dependency 

in cases where the house is sold for money or in exchange of a temporary or permanent monthly payment or pension.

House needs to have been the habitual dwelling for the last two years before the transmission.

Best regards,

Maria

Jerez Horse Fair by Dominic´s pics at Flickr.com



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Management tip 33: PostCrisis Values: Simple Proposals XXVI
21 November 2010

 Today´s: Broad-mind

A quote by a great person: "Nothing make a man more broad minded like adversity" Will Rogers

The economic changes we are experiencing these days need to be a reason to broad our enterpreneurial mind within own areas of expertise and related ones. Specially in projects for cooperation and coworking.

It can not be called an "adversity" that which tells you that new and different paths needs to be taken: it is a sign of the expiration of the old ways and a call to creativity and challenge.

For a passionate enterpreneur there is no adversity.... there are just bells.

The CostaLuz Lawyers team



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Legal tip 396. Legals for rentals III. Guarantee and rental amount
19 November 2010

Rental guarantee deposit ( provision 36 of the Urban Rentals Act)

What:  When signing the contract and by legal imperative, the tenant needs to hand over to the landlord a cash rental deposit of

How much:-one month’s rent  for permanent use ( housing) rentals

                -two months´rent for seasonal use or temporary contracts

This deposit amount can be updated once the first five years of rental life has passed.

Why:in order to guarantee any damage caused in the property by the tenant. The damage needs to be proved as not being the consequence of the habitual use of the house.

Refundable: This cash will be given back to the tenant once the house is given back in perfect state after the renting period.

If damages have been caused, the cost of the repair of these will be deducted from the deposit amount.

This deposit cannot be used to pay rental instalments.

The deposit can be asked back if not given to the tenant after the letting, interests will be charged once one month has passed and the deposit has not been refunded.

Rent

How much: Rent is freely agreed by parties.
The landlord can never ask for advanced payments of more than one   month.

During the first 5 years of contract, the rent will be updated according to the Consumer Price Index (IPC) published by the National Institute for Statistics. After those first five years, the updating can be done in a different way, but generally this IPC index is used after the first 5-years period too.

The updated rent needs  to be communicated to the tenant and will be requirable one month after this communication.

When: Unless a different thing is accepted by the parties, the rent is paid in a monthly basis and must be done within the first 7 days of each month.

How and where: Rent payment can be done where and how the parties agree. If nothing is stated in the contract regarding this, the payment must be done in cash and at the rented house. 

A receipt must be given to the tenant, unless the payment can be proved by a different means (i.e. Bank transference receipt).

 

 

Moorish Balcony in Alhambra, Granada by Shapeshift at Flickr.com



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Legal tip 395. Legals for rentals II. Contract period
18 November 2010

 

Contract period

The contract period can be freely established by the parties.

But, be VERY CAREFUL: There are very important differences in the rules about contract period depending on the temporary or permanent use of the house. 

Actually, the possibility for you, as a landlord, to have a permanent tenant in your house for 5,8 years depends on one simple word: VIVIENDA.

Or, if matter is seen by the other side, if you are a tenant and want to stay that long, due to family needs of permanent dwelling, this permanency also depends on the same word: VIVIENDA

I explain:

There are rules of automatic contract extensions which are applicable when you rent a house as permanent dwelling. These automatic extensions of the Urban Renting Act (URA) are not applicable to temporary lettings. This kind of temporary lettings are not under the URA but subject to the will of the parties which has been freely stated in the contract and, subsidiarily to the Civil Code and its imperative rules and there is no automatic extensions here.

Permanent:  Automatic extensions for 5 years-3 years.

Temporary: NO automatic extensions.

The exclusion of this kind of contracts from the URA is because this contract does not protect the tenant rights to a permanent residence, but is referred to the house rented by someone who already has a permanent residence house  and just makes this contract for  leisure or vacation necessities.   

Reiterated Court Decisions state that we are before this kind of lettings if the house is rented for vacations, weekends, feast days… and with no pretension of covering the need of a permanent residence of the tenant. Therefore, the temporary character of the use: VIVIENDA OR NOT VIVIENDA is the key to differentiate one from another.

Malaga. Cathedral gardens by Cisco G at Flickr.com

 



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Legal tip 394. Legals for rentals I. Contract document
15 November 2010

The rental agreement could legally be a verbal agreement, but that is not safe...obviously.
So, in the most of the cases the rental contract is a simple document which explicits:
-Identity data of both landlord and tenant, addresses for notifications, marital status...
-Description of the property
-Renting time period
-Permanent/ as a home or temporary use of the house
-Others: Penalty clauses, guarantees agreed, rights to option to purchase...
There is no legal prescription of any particular format or sort of document: any kind of written document is valid. Even though if any of the parties wishes so, can legally request the other one to sign a written document.
There is an official form contract which is sold at any tobacconists in Spain.
The  rental contract can also be done before a Notary Public (on a public deed) in order to have it registered in  the Land Registry, this way your tenant/landlord position can be opposed against third parties. Not very frequent though.
The most common way is to write an ordinary private document on plain paper.
It is advisable to have a lawyer revising your rental contract, specially on the terms of possible extensions, guarantees for unpaid rents, submission to arbitration or Courts...
Best,
Maria L. de Castro
 
Generalife. Alhambra Palaces and Gardens 


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Legal tip 393. New case won: Cadiz Courts backing consumers again!
11 November 2010

 At home with flu, I received a wonderful new about Cadiz appeal Court confirming the abusive character of a penalty clause in an off-plan purchase contract and reaffirming rights of  Consumers to devolution of a 95% of amounts paid if, due to breach of the buyer, the developer cancels the contract and keep an amount as a penalty.

It is very important this doctrine line is consolidating.



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Management tip 32. PostCrisis values:simple proposals XXV
11 November 2010

 Today a speaker and a video on trust:

 

 



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Legal tip 392. On the importance of outlaw for Property Law
10 November 2010

http://yalepress.yale.edu/yupbooks/book.asp?isbn=9780300122954

Property Outlaws

How Squatters, Pirates, and Protesters Improve the Law of Ownership

  • Eduardo M. Peñalver and Sonia K. Katyal
      REVIEWS             PREVIEW             CONTENTS             EXCERPTS      

 

 

 

 

 

 

 

Property Outlaws puts forth the intriguingly counterintuitive proposition that, in the case of both tangible and intellectual property law, disobedience can often lead to an improvement in legal regulation. The authors argue that in property law there is a tension between the competing demands of stability and dynamism, but its tendency is to become static and fall out of step with the needs of society.

 

The authors employ wide-ranging examples of the behaviors of “property outlaws”—the trespasser, squatter, pirate, or file-sharer—to show how specific behaviors have induced legal innovation. They also delineate the similarities between the actions of property outlaws in the spheres of tangible and intellectual property. An important conclusion of the book is that a dynamic between the activities of “property outlaws” and legal innovation should be cultivated in order to maintain this avenue of legal reform.

 

Eduardo Moisés Peñalver is a professor at the Cornell Law School.

 

Sonia K. Katyal is a professor of law at Fordham Law School. 



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Legal tip 391. Bank of Spain on transparency and regulation
09 November 2010

I am sure that they will be welcoming your points of views and experiences within Law 57/68 for further regulation.

Let´s keep the effort up for the benefit of all.

Suggestion: Go sign Keith´s petition!

http://www.bde.es/prensa/intervenpub/diregen/regula/regula150310e.pdf

By José María Roldán

Director General of Banking Regulations 


 
TRANSPARENCY
 

I will conclude by briefly mentioning transparency. The Banco de España has been a pioneer in the 
 
publication of Financial Stability Reports which analyse in detail deposit institutions' exposure and 
 
their position in terms of profitability (profits, it should not be forgotten, are the first line of defence 
against risks) and solvency (the second line of defence).
 
The Boletín Estadístico publishes, on a 
 
quarterly basis, banks', savings banks' and credit cooperatives' exposure to the construction and 
 
development sector and each sector's volume of doubtful assets. Annex IX of Accounting Circular
 
4/2004 sets out provisioning obligations with specific percentages based on a precise time scale.
 
Furthermore, when there is a clarification of the rule which may have a material impact, it is also 
 
published.
 
Can further progress be made in transparency? Yes, there is no doubt that more can be done, but 
 
in the other developed economies better practices in this area are hard to find.
 
What does seem essential is a greater effort by institutions in explaining their strengths, 
 
 
weaknesses, risks and how these risks are mitigated and managed.
 
This is because, in the 
 
 
absence of information, the market may perceive the situation to be worse than it really is. 
 
 
Therefore, it is not a question of transparency for the sake of plain good-heartedness or generosity, 
but rather it is in the institutions' own interest.
 
 
CONCLUSION
 
The combination of a deep crisis and a rapid correction of the excesses of the recent real estate 
 
cycle are setting the priorities for deposit institutions' risk management and
will continue to do so 
 
over the next few years. The Banco de España is aware of this and is exercising its oversight 
 
functions in an extraordinarily complex setting due to the wide variety of collateral underlying the 
 
overall exposure to the construction and development sector.
All of us, both supervisor and 
 
 
institutions, must make greater efforts to explain our priorities, our strategies and our uncertainties 
 
to the market. Thank you very much.
 
 
 
 
 
 
 
Floral Tea-Bar Garden in Santiago de Compostela, Spain by Meddie at Flickr.com
 


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Legal tip 390. Not against Spanish Banks but on favour of Spain´s legal order.
08 November 2010

I am very certain, there are many different types of situations among those Bank managers who worked in the off plan business in Spain during the last boom. From some of them completely conscious of the weakness buyers where being left, to some other ones that just followed the protocol and instructions for higher instances.

Someone said to me very recently that it was not Spanish Bank´s risponsabilities to care for the lack of caution and sense of british buyers purchasing crazily in Spain when the Libra glory days and the easiness of financiation.I always take everyone´s point of views into account to depure and refine my perspective on problems and sincerely I cannot agree with this person on his approach, whatever is the angle I take it from.

I do think that actions against Banks out of 1.2 of Law 57/68 is a way to show the strength of legal order in Spain and its possibilities for justice in this field. Of course Banks are below Law ( someone also asked this to me today)

Law 57/68 was actually a very advanced and pioneer action on the protection of consumers before financial institutions. Placing depositer Banks as the guardians of this Law put the business into balance. Most of the unbalances and unfair positions buyers are now ( specially when the developer goes into creditor´s meeting, liquidation or the Bank take over developments, through execution of mortgages on them) were not called to happen, if Banks had honoured that "responsability" for safety of deposits that law 57/68 entrusted to them.

Just if banks were sensible, humble and open enough, they will rapidly recognise these liabilities as soon as they receive the corresponding claims and will refund deposits to buyers.... no better way to gain again the trust and the will to buy of foreign buyers: matter of their very interest  specially now that they are the biggest estate agents in the country. Just a matter of balance and broad sense of market.

I am sure they will finally recognise and with the correct approach, they will re-atract many buyers to the Spanish Real Estate property market this way... very soon.

Best wishes,

Maria L. de Castro

Generalife gardens, Granada by tochis at Flickr.com 



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Legl tip 389. Bank of Spain overwhelmed with claims: go and regulate!
05 November 2010

 

 Bank of Spain received in 2009  a number of 13640 claims : a 93% more in respect to 2008. 53% about  Banks and 35% About Saving Banks ( Cajas de Ahorro)

Many of them are of course related to the execution of Bank Guarantees of Law 57/68.

As very well say my friend Keith Rule, it is Bank of Spain´s liability the lack of regulation on Bank´s liabilities out of Law 57/68. Both when there is a Bank Guarantee and when there is not.


It is about time. How is that petition going Keith?

 

Alhambra by Joao Maximo af Flickr.com



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Legal tip 388. Person oriented retirement village
04 November 2010

A friend of mine is starting to take first steps for the establishement of a great project. It will be what I  would call a " person oriented" retirement development/village in Alcaidesa, San Roque, Cádiz.

Development seems to be almost built now. Next step is to look for inhabitants...

I feel atracted by the project as it will be oriented to really get to know people there, their needs, their preferences... A person oriented project centered on the full well being of the inhabitants within the community: security measures, social offer, cultural integration, medical and psychological support and  easy access to shopping,  social , medical, spiritual centers...

Beach and Golf Courses around too.

Social retreats, conferences, spanish culture and tradition experiences... all with a very good level of proffessionalism and humanity and with an approach where every single  person and person within a community is central.

Housing will be provided initially  on a permanent  rental basis with possible access to buy in the future.

Is this somehting any of you would be up to? I would like to help him out a bit with a kind of market research among you.

Alcazar pots in Sevilla

 



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Legal tip 387. San Javier Court going pro-consumer and against a clause of a Polaris contract
04 November 2010

A recent Court decission won by our Law Firm in San Javier, declares abusive the clause of Polaris contracta by which the developer tries to retain the whole lot of paid amounts after the cancellation of the contract by the said developer.

The decission is based on applying Royal Decree 1/2007 which says that those clauses which have not been negotiated on an individual basis need to be clear, simple and legible, being essential the presence of good faith and fair balance between rights and obligations of the parties

Provision 82.4 of the said Royal Decree explicity describes as abusive all those clauses which link the contract to the company´s will, limit rights of consumers and users, lack reciprocity, restrict guarantees in an unproportionated way, wrongfully impose to consumers the burden of proof ,or are in any way unporportionated to the execution of the contract or contravene rules about jurisdiction or applicable Law.

 

Good again for litigators!



Like 0        Published at 13:55   Comments (2)


Legal tip 386. Disqualification of Social Housing VPO
04 November 2010

The disqualification of a Social housing supress all limits to free trade of the same.

This disqualification can be applied for on a voluntary basis  once  the deadline stablished in the applicable regulations is met.

Any aid or grant received by either National, regional or local administration will have to be returned to the corresponding administration plus legal interests accrued since reception of aids.

The Housing Office of the Region with jurisdiction on the house will have to issue a  report  on the justification of the disqualification.

     Applicable Law

  • RD 2114/1968, regulations on Law for Social Housing. RD 3148/1978,  Royal Decree on housing policies
  • RD 727/1993, Price of Social Housing developed by private companies  
  • Specific Regulations of Housing Plan with regards to every specific house.

 

 Sevilla Alcázares by asw909 at Flickr.com

 



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Legal tip 385. New initiatives by the General Council of Judicial Power
03 November 2010

General Council of Judicial Power taking a new initiative. Two important points to the matters that are commonly discussed here in EyeonSpain:

 

1. - Reduction of judicial procedures.  In order to provide effective judicial protection in reasonable timeframes and in order to optimize public resources this way. The proposal is to raise the minimum amounts required to go to Appeal and Supreme Court.  Of course the limitations need to be established in a rational way and without any harm to citizenship´s rights.  In this sense, it is also proposed the definitive promotion of alternative mechanisms for conflicts resolution.

2. Claims of citizenship:

 Gabriela Bravo, Spokesman of the General Council of Judicial Power has stated to “Legal Today” that the main objective of the communication measures that are being implemented by the General Council of Judicial Power is for the society to know and value its mission. Our first commitment is for transparency and therefore we aim to make understand our constitutional duties as govern body of the judiciay in Spain . She thinks that public opinion is starting to see them as an Institution committed with modernization of Justice and guarantoor of judicial independency, the main reason of being of the Council.  

Reales Alcazares Sevilla by Kojotomoto at Flickr.com



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Legal tip 384. Foreign companies growing in Spain III. Branches
03 November 2010

The branch is a secondary establishment with permanent representation and autonomy to develop the activities of the parent foreign company.

Branches do not have own legal personality so the steps are different than when making a new company under Spanish rules:  


1.- The Boards of Directors of the parent company must adopt an agreement by which they approve the establishment of the branch. This agreement and the bylaws must be translated by a sworn translator and subsequently filed with the Commercial Registry in Spain.

2. The Spanish Consulate in the foreign country of residence of the parent company,  needs to certify that the parent company is incorporated under the laws of its country.

3. Deposit of the social capital agreed by the parent company in the Bank ( there is no required minimum)

4. A Public Notary deed for the establishment  of the company  must be signed before a Notary public.  

5. Application for Tax identification code of the branch needs to be done before the Tax Office's headquarters. Documents to be brought for the application are the deeds and the Notary deeds of company establishment and the Tax Number of the representative or agent of the company in Spain.

6. Stamp Duty is of 1% ( there may be exemptions  in order to avoid double taxation).

7.  Finally, the branch must get recorded in the Comercial Registry with jurisdcition whre the branch is located within the month following the execution of the deed.
 
Branches are under accountancy obligations for anual accounts to be deposited in the Commercial registry.

The Taxation of the branch depends on the provisions of Double Taxation Conventions applicable to the case, and, failing that,
it is taxed as non-residents for all the incomes obtained in Spain.

Inside Alcazar de Sevilla by ReservasdeCoches at Flickr.com



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Legal tip 383. E- Justice figures
02 November 2010

More and more Europeans are working, studying or living in different Member States to the one of their birth.  Consequently, the probability that citizens are involved in civil justice in another Member State is increasing exponentially.

In a genuine European judicial area citizens should be able to assert their rights throughout the Union.

The Commission has launched this summer, the e-Justice portal in order to provide information to citizens on how to solve their legal problems abroad. The site, which already has more than 12 000 pages of content, provides access to justice across the EU and provides quick responses to the concerns of citizens' on legal matters. Has so far received 125 000 visits.

European citizens continue to face obstacles due to differences between legal systems of Member States. We must ensure that such differences do not hinder the access to civil justice that they have in their own country.

Figures

According to the survey:

    * 56% of European citizens find it difficult to access civil justice in another EU country.
    * 73% of European citizens are in favor of adopting additional measures to facilitate access to justice in other Member States.
    * 52% believed that such measures should be taken by common standards at EU level.
    * 68% of EU citizens believe the EU should intervene in how they apply national standards in international divorce cases and financial matters related to spouses from different EU countries.
    * 58% of respondents are in favor of the EU to take further steps to improve the recognition of documents in the Member States.

Generalife Gardens by Joao Máximo at Flickr.com



Like 0        Published at 17:32   Comments (0)


Legal tip 382. Foreign companies growing in Spain II
02 November 2010

 

There are different ways for having a presence in Spain as a company:

  • Open a branch or representative office.
  • Form a Spanish company
  • Associate with businesses already established in Spain: joint ventures . Their members can share risks, resourses, experiences, staff...

Other ways to have presence in Spain:

 1. Through a distribution agreement.

 2. Through an agent

 3. Establishing a franchise

Will be going through them along coming posts.

Spirits up? Alright!

Maria


Alcazar Gardens Cordoba by Hoja de Reyes at Flickr.com

 



Like 0        Published at 11:20   Comments (0)


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