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El blog de Maria

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

Legal tip 351. Self employed or limited (SL)
30 September 2010



    In the case of a self-employed, the liability is unlimited,  as there is an absence of divission between  company and personal assets . While limited liability companies is limited to the capital. Thus, when a limited company goes bankrupt, only respond with his assets, and never will with the properties of their owners. 

Financial requirements: 

A limited requires a minimum capital of € 3006.00 €. In this case when it comes time to grant a loan, banks require the partners or directors to  provide personal guarantees.

No initial capital is required to be registered both in Social Security system and Taxes for a  self employed. 


Self-employed individuals  obtain directly the benefits of their business and are taxed in the income tax. However, the limited is taxed through corporation tax.  Sometimes corporation tax is more advisable than income tax levels when this are very high.

 Number of members:
    More than one person trading together usually makes a company, although  law envisages the possibility of one-person limited companies, consisting of a single person or entity. 

    Social Security and Taxes formalities

    To commence a business as a sole trader is much faster and easier than opting for a limited company. As a self-employed you just need to register within the Treasure Department and start paying taxes and social security fees. As a limited company, you need to first establish the company- through the granting of a Notary deed and register it in the Commercial Registry- and also perform registration at Taxes and Labour departments, basically. 
    Some independent proffessional can pay fees to the Proffessional Mutual Benefit Society instead of fees to the Social Security.
    Bases for calculation of the Social Security fees are published by the Ministry of Finance each year. Therefore, the worker must pay a monthly fee, which varies according to the chosen base. The larger the base, the higher the fee. The type of base and fee wil also have an impact on the volume of coverage that Social Security provides for sickness, disablement and retirement. 

 There are not automatical criteria for deciding between self-employed and limited company. The most  advantageous option depends on the specific circumnstances of each one.
    A tip: If you are starting an activity and are not sure of its viability, better to choose to be a self-employed with a low base and see what happens.... who knows? You may become a multinational company in the future...

By Jesús Castro and María L de Castro

Castellar.Houses inside the Castle by Roberto Pecino at


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Legal tip 350. Lack of Bank Guarantees. Banks´responsability. Case Law.
29 September 2010

Most relevant Case Law for claiming Banks responsabilities due to the the lack of Bank Guarantees in off plan purchases was issued by the Higher Court of Justice in Navarra in 2008 and states, among many other important things:

It is the developer who needs to deposit amounts in the special account.  

The receiver Bank must  demand the developer to unequivocally mention this account in the purchase contracts.

The receiver Bank must also demand the developer to deposit money in those accounts.  

The Guarantee fully and completely covers  all amounts the buyer proves to have paid in advance for the building of his house. 

A rencet Court Decission ( June 2010)  by Alicante Appeal Court make same statements.

Let´s keep moving ahead!

Inside Villa Capistrano, Nerja, Málaga by Roberto Pecino at

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Legal tip 349. What about trees, branches, roots of my neighbour?
24 September 2010

In terms of minimum distances between neighbouring properties, trees plantations need to be made according to local regulations. If local regulations do not specify about this, the minimum distance to the dividing line will be of 2 meters if trees are tall and 50 cms if trees are short. Trees planted contravening this rule can be uprooted at the request of the affected owner.

The owner of a property suffering the invasion of branches and roots of neighbor’s trees can request them to be chopped. Roots can be chopped without previous request.

Trees in a living dividing hedge are also considered part of the hedge and any owner can request them to be pulled up, excepting trees working as markers, which cannot be uprooted without co-owners agreement.

Marina under construction in La Linea ( Cadiz) by Roberto Pecino at

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Legal tip 348. Special requirements for special buildings
22 September 2010

Distances and intermediate works for determined buildings and plantations

( today: buildings, tomorrow: plantations)

1º Military area:
Buildings or plantations closet o fortresses need to be made according to conditions established by Law and particular regulations and decrees on the matter.

2º Dangerous buildings
: Dangerous constructions such as wells, sewers, aqueducts, ovens, furnaces, fireplaces, barns, storage of corrosive substances, devices that are moved by steam, or factories that are dangerous or harmful per se need to be build according to local regulations and keeping the necessary shelter work

If there are no local regulations, the survey of an expert will be necessary in order to avoid any damage to adjacent properties.


 Textures by Roberto Pecino at

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Legal tip 347. Case won against POLARIS´ guarantor
22 September 2010

Lawsuit submitted in February 2010 against HYPO REAL ESTATE BANK INTERNATIONAL for the execution of a Bank Guarantee granted according to Law 57/68 for the refund of deposits paid in Terrazas de la Torre, developed by the Polaris company, Hacienda Verde SL.

Our joy is today for two reasons: firstly, becuase our clients has been granted a decission in his favour for the refund of full deposit, plus legal interests plus legal costs ( Court decission dated the 20th of September 2010: in 7 months time)

and secondly, because the Judge takes the oportunity to  critricize the terms of the  Polaris contract, ( we have never heard that before from a Judge) considering it is an  "adhesion contract", where the buyer has had no option, no agreement intervention and that has been completely left to the will of the developer.

It is also intersting because Polaris Guarantees were specially difficult/ if not impossible to execute due to lack of clear completion deadlines. This lucid Judge has been wise enough to admitt how we jumped over the trap and requested the execution of the Guarantee.

Good for the Judge again today! Goof for fair- wise application of Consumers Law!


La Barrosa, Cádiz, by Roberto Pecino at

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Legal tip 346. Legal easement for drainage
22 September 2010

 Natural drainage of buildings: The owner of a building needs to have  their roofs in a way that will permit rainwater to fall on their own ground or on the street or public place, and not on the floor of the neighbor. Even falling on own ground, the owner is obliged to collect waters in a way that will not cause damage to adjacent property.

 Legal easement for drainage:  This legal easement applies when the yard or patio of a house is nestled among others, and it is not possible for the waters to be drained through it. This way, waters will be given way through the point of the contiguous land where the exit is easier. The drainage channel will be set so damages to the adjacent property will be the minimums, previous due compensation.

 Voluntary easement for rooftops:  The owner of the property which receives waters from adjacent owner´s roofs can build either receiving waters on his own roof or giving them another outlet according to local regulations or customs so that the adjacent owner is not damaged.

 Amanecer in Algeciras by Roberto Pecino at

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Legal tip 345. Won case on balance of penalties: good for consumer oriented Judge in Totana
20 September 2010

We have just received today a Court decission in favour of our client. We claim for the balance of the penalty clause. Polaris wanted to keep the 100% of the deposit he has paid as a penalty clause for lack of completion/ default by the vendor.

We challenged that penalty clause on the basis of being against Consumers Rights as per stablished in the Consumers Act ( article 85.6 specifically), which says:

Article 85: Abusive clauses as linking the contract to developer´s will


6.Clauses that imply the imposition of an unproportionately high penalty clause to the consumer who does not meet their obligations.

The Judge, declares null and void the said clause and allows Polaris to keep just  9000 €, against the 63.000 € that Polaris was keeping as penalty clause.

Good for judges moderating illegal and abusive clauses of contracts. It is part of their role. Good for the future of regions they are incardinated. If they produce balance and fair Law, economy will grow healthier.

Good news for the beginning of this rainy week of September.

Congratulations to our litigators!


Street in Cordoba´s Juderia by Roberto Pecino at

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Legal tip 344. Houses in Spain are houses in Europe
17 September 2010

 A million and a half unfinished and unsold properties in South Europe ( Spain). Spain was an early show of euro success, the sale of these houses need to be a more mature show of euro present consistency. Come  northern europeans, come to your south and buy under your sun.

Houses inside Castellar Castle, Campo de Gibraltar, Cadiz By Roberto Pecino at

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Legal tip 343. Electronic urban planning for Spain
17 September 2010

Under initial tests and implementation:
a national system in Spain to integrate new technologies in the local town management so that citizens can have direct access to urban planning and therefore promote transparency in these processes.
This will also facilitate the full interoperability between administrations and between them and those involved in laying the foundations of a system of electronic processing of all urban planning
Have a great weekend!

 Sanlúcar de Barrameda, Cádiz, Costa de la Luz by Roberto Pecino at

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Legal tip 342. Banks defaults as guardians of Law 57/68
16 September 2010


It could be accepted  the responsibility of the depositary bank for off plan purchases quantities, ex Article 1.2 Law 57/68, although the promoter does not open the Special Bank Account prevented by this Law 57/68 provided that:

The amounts deposited in ordinary Bank accounts were known, or due to be known, by the bank as off plan purchases advanced amount.  This knowledge by the Bank is drawn from documents relating to the development and financing of the work, such as, among other ones:  

 -Reservation or sales contracts,  pre-contracts…

-Banking:  credits to developers, payments to suppliers, building permits….

-Known facts: including the name or emblem of the Bank in pre-binding documents or in advertising  material used by the promoter…

The Bank will know the destination of payments by buyers, with total possibility if it happens that it is  same entity which grants the mortgage for the buying of the land,  mortgage for the building of the complex ….: in all these cases, it is clear the association between building and financing.

We cannot forget the inalienable character of rights contained in Law 57/68 in favor of the buyer and the watchdog role of compliance with the guarantees that the law assigns to depositors banks and savings banks.

It is uncontroverted Case Law that the obligation for the opening of the account is not of the buyer and the  fact that money was not deposited in this special account cannot be opposed by the  guarantor in order to avoid the guaranteeing obligations. Banks also cannot use this argument to absolve themselves of responsibility ex Article 1.2.

Flores by Roberto Pecino at


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Legal tip 341. Nice paragraph by the General Council of Judicial Power in Spain
08 September 2010

It has been nice, to receive today a letter in answer to one of our claims to the General Council of Judges in Spain.

It was about the slow speed of a Court in Murcia,

They say they have now given a boost to the judicial  procedure refered n our claim and also, -  this is in our opinion the nicest part of the letter- :

"Nevertheless, your claim has allowed the General Council of Judges to know on your valuable perception of the problem and to contribute this way to boost the process for the modernization of the Justice administration which is being undertaken at present moment with the comprehensive reform of the judicial offices in order to establish good levels of quality, management efficiency and use of new technologies"

So.... keep suggesting and claiming please. We all need to contribute!



Faro de Puerto Atunara by Roberto Pecino at

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Legal tip 340. Easements in Spain 4: lights and views
08 September 2010

Easement of lights:   Existence of holes to make light of neighboring property

Easement of views:  Opening windows or holes to enjoy views across the neighboring farm, and prevent any work that undermine or hamper them.

Lights and views on party wall. - To open windows or holes in the party wall, it is only required the consent of the other, or other owners.

Tolerance hollow: The owner of a wall, which is not a party wall, can open windows or hollows in it provided that:

    - Are immediate to the roofs.

    - Its dimensions are 30 cm square and

    - Have iron bars tucked into the wall with wire netting.

Direct views:

Straight windows, balconies or other similar projections on a property next door cannot be opened if there are not two meters of minimum distance between this and the neighboring one.

Sides or oblique windows cannot be opened if there is not 60 cm of distance from the line separating the two properties.

If by any title, an owner has a right to have direct views, balconies or viewpoints on the adjacent property, the owner of this passive estate cannot build nearer than three meters from the other one.  


Benalauría, Málaga, Spain by Roberto Carlos Pecino at

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Legal tip 339. Easements in Spain 3: party wall
07 September 2010

 Party wall easement (regulated in provisions 571 to 579 of the Civil Code): 

A party wall is the legal situation that exists when two properties are separated by a common element, which belongs to the owners of these.

Easement is presumed unless there is title, outward sign or proof to the contrary. This easement is not compulsory and therefore it can only be established by the will of the adjoining owners.

Rights attached to it are therefore what parties agree unless the presumption worked, case when the following rights will exist by force of Law:

 1. Repairing obligations are proportional to each adjoining owner´s party wall rights.

Each owner is entitled to raise the party wall at his own expense and to compensate the damages that this can cause, albeit temporary.  This owner will have to assume the corresponding maintenance costs.

3. Each owner is entitled to use the party wall in proportion to the corresponding rights on it. 

Gibraltar by Roberto Pecino at

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Legal tip 338. Dismissal of Senior Director/former common employee
06 September 2010


CASE: The employee is transferred from a normal/common work contract, to a senior executive contract.  Afterwards,  his executive status/position is terminated with the correspondent payment of  compensation as per it is established , when no specific agreement has been made between the contract parties, by Employment Law  and its regulations for Senior Executive contracts.

Immediately, he resumed his previous standard/common work status which had been suspended, and once again a dismissal is carried out, this one under the normal working regime. The company recognizes its unfair character.

COMMENTS: The existence of two periods is evident: the first period is for time of employment with a common work contract, and the second period is until the termination of the senior executive term, during which the standard working terms had been suspended and corresponding services were performed regarding this special employment contract/status.

The question regarding the calculation of compensation in view of the existence of a first period with a common/standard employment contract followed by a senior executive one and the termination is produced once again under the normal employment regime/regulations, has been the objective of various sentences from the Supreme Court.  As a meaningful example of said Case Law it can be mentioned the Supreme Court decision dated the 18th of February, 2003.

The Supreme Court understands that the first ordinary/standard employment contract remains suspended when the employee has been appointed for a higher charge.

In this case, it is not a question of the existence of parallel legal relationships, without a continuity solution, but the suspension of certain initial contract assignments which remains in a phase of slow progress during the existence and development of another special assignments that substitutes the first, which at its time continues to exist when the senior contract is terminated.

Article 9 of the RD 1382/1985 which regulates the special senior executive employment status/contract, establishes/clarifies that when the senior executive reaches this position in the company via internal promotion, rising from a standard/normal employment position, the contract must be officially written and must stipulate whether “the new contract substitutes the previous standard one or whether this previous one is simply suspended"

Anyhow, if this level of specification is not complied with in the contract, “it will be automatically understood that the standard contract has been suspended”.  The altering of the employees’ status will only come into effect two years after the signing of the contract. And the legal solution regarding the effects of terminating this special agreement is that by terminating this senior executive agreement, it is the employee who can decide whether to resume the standard employment contract. All this, “without affecting the compensations he is entitled to in the event of terminating the contract”. 

By Jesus Castro

Puerto Banús Marina by Roberto Pecino at

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Legal tip 337. Is that about Bank´s liability a JOKE?
03 September 2010

Today, I wrote this email to someone who contacted  me, showing her sincere skepticism towards action 1.2 for banks liabilities and her desires to find some hope:


Thanks for your sincere email. I am pleased to answer you:

If Banks had diligently verified that all amounts paid into their accounts for off plan developments, were covered by Bank Guarantees/ Insurance Policies, according to obligations set for them in provision 1.2 of Law 57/68, many (xxxxxxxxxx developer´s name)´s  buyers had their  money back in their accounts now.

Law 57/68 is a very advanced t its time ( 1968) Law which was stablished to prevent that very similar disasters to our days´happening in our country back in 1968 will never happen again. Unfortunately it is a Law that has been poorly written and even more poorly applied ( maybe because of its own lacks). There is an important group of Proffessors and Judges who understand Law 57/68 correctly, and it is increasing.  The consequences of that lack of care by Banks when receiving money for off plan buildings are now evident both in social life and in the reality of Courts everyday.

There is also a need of a renewed understanding of the role of Banks and financial institutions within the social fabric. They have special duties of care for money deposited in their accounts and cannot be focused just on ultra-benefits regardless how. One of the most important aspects of the social risponsability of Banks is a cared balance between own benefits and people rights and guarantees. They are in a position of trust.

We rely on these good Law scientifics and appliers ( Judges), we also rely on existing Case Law for the defense of this action,  and on a great and deep effort made by our team of specialists and advisors. We are sure Justice on this field will be coming very soon.

Best wishes,


Nerja, by Roberto Pecino at

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Legal tip 336. Easements in Spain 2: water descending
03 September 2010

 Natural easement for water descending. What does this mean?

It means that if your rural house and plot are in a lower level to the adjacent one and a natural course of water comes down from the neighbour rural property , he, the owner--- or better said, the waters--- have rights for this to be allowed by you. You also need to allow the pass of all the earth and stones coming down with the waters.

You cannot do any work for the minimisation of this course ( unless there is a danger involved) and the favoured owner cannot do anytghing to maximize it.

So, natural waters.... have a natural right... to pass by what nature decides is its course. We owners need to respect it.

More on easements tomorrow


Villa Capistrano, Nerja, Málaga by Roberto Pecino at

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Legal tip 335. Easements in Spain: concept
02 September 2010

 A real estate easement is a right on another owner´s real estate unit. The content of the right is the possibility of using the estate in a more or less full way.

These rights can be established by Law or by the will of the  parties. Any owner can constitute on his property the easements he wants, always they are not against Law or Public Order.  

The establishment of these rights need to be done by Public Notary deed

( more on easements tomorrow....)


Gatos by Roberto Pecino at

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Management tip 26. PostCrisis values:simple proposals XX
01 September 2010

 Today´s: Perspective

A quote by a great person:

     I Like this quote I dislike this quoteHumor is perhaps a sense of intellectual perspective: an awareness that some things are really important, others not; and that the two kinds are most oddly jumbled in everyday affairs.

 Christopher Morley quotes (American writer and editor 1890-1957)

 Falling into one day´s, one week´s, one month´s perception of the company is the way to lose perspective and energies. Tracing a system by which you acquire a short, medium and long term perception of the events of the company is a great tool for a balanced management.

The Costaluz Lawyers team

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