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El blog de Maria

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

Legal posts 1270. Claim on UK pension tax in Spain
27 February 2015

Foreign Pension remunerations which have been undeclared in Spain during the voluntary period in non prescribed years can be regularized without penalty, interest or penalties from January to end of June 2015.  Surcharges, interest and penalties imposed by late submitting will also be not imposed

 

If pension related taxes were paid prior to the entry into force of the Act in which this measure is contained, all surcharges (including those of the enforcement period), interests and penalties arising from such regularization will be exempted, provided the enforcement is still no firm.

 

If the enforcement is now firm, devolution can be requested from the Treasure till end of June 2015. Amounts paid shall be refunded, without payment of delay interest, within six months from the filing of the claim.

 

After that time, if no refund has been made the corresponding delay interest shall be paid.

Genalguacil, Malaga, South eastern Spain, at facebook.com



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Legal tip 1269. Who was to blame ?
27 February 2015

As years pass and the observation and interpretation of events can be more and more objective, I still think Financial Systems, lack of control.. not just in Spain but also in Europe and the whole occidental side of the world made the mess. It is simple and clear.

Many other actors danced at that party but.... there were clear promoters, organisers and benefitted.

Answering today in the forums:

Josey:

Asking you below in bold green (same text as your message):

 

So, just to be clear on this, if as a purchaser of an Off Plan Property in Spain and even if the property was eventually built and FOL granted but you never completed the purchase, you could still make a claim against the original Lawyer if they failed to collect any bank guarantees for your deposits???  No, you cannot, you need to prove an effective damage arising from the fact of lack of Bank Guarantee. and especially when you have written copy from the original lawyer at the start of the buying process, clearly stating that they would collect all bank guarantees realting to the purchase. 

If this is the case, surely there would be a flood of good lawyers in Spain advertsing a no win no fees policy, to claim against the bad lawyers who misrepresented thousands of buyers over so many years if there is in fact case law realting to this abuse???  or is it like most other things in the Spanish legal system where there is no 100% guarantee of ever getting your money back even when case law exists???

Let me kindly reply to last assertion, for your peace of mind:

Judges are interpreting Law quite correctly, in my opinion in favor of off plan buyers in Spain ( with exception of one particulart region, need to add here).

Supreme Court is being quite fair and brave when interpreting Law 57/68 and, from 1968 Spain has a Law which protects off plan buyers  fiercely when buying off plan. No similar Law known at any other country in the world.

A different matter is the particular ( and generalised, unfortunately, due to aggressive finance policies) of Banks, agents, developers, lawyers.... inmersed in the off plan investment-buying crazy world of those years.

It happened in Spain but there were many foreign interests playing their role. Let me reiterate this opinion. Let´s be honest and truthful to oursleves. It is the only way to avoid same mistakes in the future.

Case Law protecting these buyers is now highly reinforced, this Law Firm, has deccisively contributed to that. ;)

With all respect always... willing to listed to opinions after all these years.

Genalguacil, Málaga, South eastern Spain, at facebook.com



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Legal tip 1268. I am not Spanish but I pay IHT in Spain
26 February 2015

 

Who are the foreigner taxpayers of Spanish Inheritance tax?
 
As you know, Inheritance tax in Spain is paid by the beneficiaries. Submission to the tax is due to either personal or real obligation.
 
If the beneficiary is a Spanish resident:
 
According to provision 6 of Act 29/1987 on Inheritance and Donation tax, you will be liable in Spain for the acquisition  of all the inherited assets regardless the country they are located. The criterion for this submission is personal obligation (personal residency). Taxes paid in a foreign country by similar concept will be deducted according to a rule established in provision 23 of the Spanish Inheritance Tax Act.
 
 
If  the beneficiary is not a Spanish resident:
 
According to provision 7 of the Act 29/1987, he will be under Spanish Inheritance tax obligation by real obligation (location of goods), and will have to pay Inheritance taxfor those goods and rights located in Spain.
 
From date of death of the deceased, there is 6 months to pay the inheritance tax return. The forms are 650 and 652.
 
If you are a resident, it is necessary to have a Tax identification number (NIF).
If you are not a resident, you will need to have a NIE number.
 
There is no agreement for the avoidance of double Inheritance taxation between Spain and the United Kingdom.
 

European Court recently declared that  Spain tax on inheritance and gift is, in part, contrary to Community legislation.

 

Luxembourg has just ruled that the tax is contrary to Community law as it forces foreign residents to pay higher taxes than Spanish residents.

 

This tribute is regulated by Regions (Communidades autónomas) and these offers tax deductions of which can only benefit the residents in that region. Thus, residents in another EU country or holders of property located outside the country are forced to pay higher taxes.

 

The Court of Justice of the European Union (ECJ) considers that there is "no objective difference that could justify this difference in treatment" between the situation of a resident and a non-resident or from a property located in Spain or in another country.

 

European justice agrees with the EU executive, who brought the case to court in 2012, and believes that this involved a "restriction" on free movement of capital, one of the pillars of the European Union.

 

The judgment, unappealable, is now mandatory for Spain.  Spain will have to modify Law 22/2009 on cession of IHT tax to regions so non residents receiving an inheritance in Spain can benefit from regional allowances.

 

 IMPORTANT NOTICE: If you are a non resident and you paid IHT tax in Spain during the last four years, a refund claim is possible now

Parque del Oeste, Malaga, South eastern Spain

 


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Legal tip 1267. British Consulate in Malaga recommending us for conveyancing work
26 February 2015

Thanks a lot!

We are very much looking forward to helping many people with conveyancing in Spain

Come to Spain! We will guide you through with our relocation services!

Malaga, South eastern Spain



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Legal post 1266. What does Spanish Law considers as " annoying"?
25 February 2015

 A reminder of what  Law in Spain considers " annoying":

It is annoying all those activities that deprive of  or make difficult to others the regular and adequate use of a thing or a right. All those activities that, being performed by people within their ownership rights realm, are exceding the limits of regular tolerance  and throw its consequences on others´ownership and disrupt their use: 
 
Court case is wide and diverse on this: ( this is not a closed list).
 
- To pile up iron and boxes full of bottles in a patio.
 
- Noises and vibrations from the music machine of a “ Pub” might cause the cancellation of a rental contract. Those activities need to be evident and persistent
 
- Noisy  people gatherings which produce uncomfortable vibrations, smells…

 - Cooking activities which produce unpleasant smell and vapors.
 

-Pets are not annoying “per se” unless it is proved that they cause damages or nuisance to others or others´properties.
 
- Threatens, insults,  constant and hostile activities or constant noises with an annoying purpose.
 
It is very recomendable  to have internal rules of the Community of Owners , specifying standard behaviour between neighbours and to have active Committees that can warn and limit so living together can be easier.
 
 
Reservoir Conde de Guadalorce, Ardales, Malaga, South eastern Spain, at facebook.com

 
 


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Legal tip 1265. Today´s question on baby nationality
25 February 2015

A question from a client today: 

Hi
I need a couple of questions answered if possible. My son's partner whom he lives with have lived here for 10 years and been a resident since 2007 her British passport runs out on end of march and she was wondering whether she could get a Spanish one instead or does she have to get a British one. She needs to apply for nationality first and she will get the passport after this
Also there due to have a baby boy on XX of XXXXXX of march and they are naming him  XXXX XXXX XXXX  the last name being our family surname can the baby have a Spanish passport. as both parents are residents over here. This does not give Spanish nationality to the baby. and does this affect the name of the baby because we heard that if the baby has a Spanish passport it means he has to have the mothers family name as his last name my son and his partner are both British but as I said they are both residents and living together and on the same padron

If that boy obtained Spanish Nationality ( he/she can request it once her mom obtains it, always provided her mom request it before he/she is born), he/she will have two last names. Generally father´s last name is first and mother´s last name is second but, they have a right to shift it.

Atajate, Malaga, South eastern Spain, at facebook.com



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Legal tip 1264. What is all that about European Inheritance Law being compulsory from August´15 on?
24 February 2015

 

 EU Regulation passed in 2012 (650/2012, also knows as Brussels IV) brings easiness to international inheritances.

This regulation has three basic pillars:

  1. It makes sure that every succession is treated under a single Law and by one authority.
  2. It also enables citizens to choose between law of residency and law of nationality for their inheritance affairs.
  3.  Creation of the European Certificate of Sucession

 

Brussels IV applies to inheritances with or without testament. It does not imply, in any sense, the alteration of  the substantive National inheritance Law of every European Country. Matters such as who are inheritors, or how taxes apply are not impacted in any way by this new European regulation.

This regulation also creates the European Certificate of Succession, which will facilitate the proving of status and rights as heir/ administrator of the estate/ executor of will. This certificate will be issued by the country where the deceased had habitual residency and will provide proof of entitlement in the estate to all signatory countries.

After this regulation, if you are a UK National but have Spanish residency and your only estate asset is in Spain make sure that you choose law of Nationality in your will as on the contrary, your inheritance might  be governed by Spanish rules and its obligatory heirs at your death

 

These rules will obligatorily, by virtue of Law  apply to all persons dying after 17th of August 2015 so it is important that you make the necessary preventive changes in your will before that date. 

You can use this new regulation and choose Nationality Law now, always provided you perform the change according to rules set up in the regulation/ applicable private International Law.

Residency status is determined by facts: duration and regularity of the deceased´s presence in the country. Residency requires close and stable connection with the specific country.

UK, Ireland and Denmark  did not sign the regulation but any UK national   having habitual residency in Spain and with Estate assets just in Spain, Spanish Courts might understand that the Spanish assets needs to be under Spain Law by virtue of Brussels IV; so, if they want their national succession Law to be applied to their whole estate, they need to grant a new will stating this. If they had assets in the UK, Ireland or Denmark a grant of probate will be obviously necessary to administer the Uk, Ireland or Denmark assets.

 

Cortes de ls Frontera, Cádiz, South of Spain, at facebook.com

 



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Legal tip 1263. NEW! Case won against Sabadell and Promociones Eurohouse AGAIN
17 February 2015

PROMOCIONES EUROHOUSE 2010 S.L. - BANK ACTION WON AGAINST BANCO SABADELL (formerly BANCO CAM)

Notification sent today to a client who had reserved two off-plan properties from the developer, PROMOCIONES EUROHOUSE 2010 S.L., informing them that their action against BANCO SABADELL had been won in the First Instance Court in Orihuela.

 

Please find attached Sentence number xx/2015 from the First Instance Court No.2 in Orihuela.

 

Your case against BANCO SABADELL S.A. has been won.

 

The final paragraph of the First Instance Sentence delivered on 9 February 2015 and notified on 12 February 2015 states: 

 

 

“Partially estimating the Lawsuit filed on behalf of xxxxxxxx & xxxxxxxxx against BANCO SABADELL S.A., and condemn the defendant to the repayment of the amount of xx,xxx Euros, plus legal interest from the date of payment to the account of Banco Sabadell S.A. until full payment.

 

No imposition of costs on any party is made”

 

So BANCO SABADELL S.A. is liable to refund the amount of xx,xxx€ plus legal interest from the date the amount was paid to the Promociones Eurohouse account at BANCO SABADELL until full payment to the Court.  Legal costs are not imposed on any party, so each party will pay its own costs.

 

The Sentence explains in great detail the liability of BANCO SABADELL according to its obligations under LEY 57/1968 for the off-plan deposits paid to the account opened by the developer, PROMOCIONES EUROHOUSE 2010 S.L. in BANCO SABADELL (formerly Banco CAM).

 

Particular points of interest stated by the Judge in the Sentence are: 

 

“When interpreting and applying LEY 57/1968 we should not forget the aim of the Law which is to protect consumers against real estate fraud.

 

The main aim of consumer protection has been highlighted by the Supreme Court in a Sentence in 2001.  Such is the protective purpose of LEY 57/1968 that jurisprudence has clarified that the interpretation of this Law should not be to the detriment of the consumer.

 

All these rights and guarantees to the purchaser are declared in Article 7 of LEY 57/1968 and are of an inalienable nature.

 

Article 1.2 of LEY 57/1968 in its desire to protect purchasers of homes, also involves banks.  It states that for the opening of these accounts the bank, under its responsibility, must demand the Guarantee referred to in the previous condition.

 

The question is whether the responsibility of Banks always arises when purchaser’s funds are paid into any type of accounts when the Bank is aware that the source of such income is from buyers of homes under construction, or if such liability arises only when the funds are paid to a Special Account.

 

In this case the account opened in Banco Sabadell according to the account opening contract is not called a Special Account.  Likewise the Purchase Contract states that buyers funds should be paid to an account at another Bank, BBVA S.A.

 

We follow current jurisprudence which explains that the status of the account for the purpose of LEY 57/1968 is not determined by the account opening contract, but by the fact that if the Bank is aware of the nature of the business of the account holder and has clear indications that the account is to be used for the receipt of off-plan funds then follows the duty of supervision and control of the account and the responsibility to ensure the Guarantee is provided by the developer as per the requirements of LEY 57/1968.

 

So although in this case the account at Banco Sabadell is not called a Special Account, several concurrent circumstances lead us to conclude that the account should be treated as a Special Account.

 

First we note that the defendant Bank has failed to provide to the Court copies of transaction statements for that account despite being required to do so.  It relied on the fact that these statements were not available as the tax law does not require them to keep them for more than 6 years; but the truth is, as stated by the representative of the defendant Bank in Court, that the bank statements from 2006 and 2007 are stored in the Banks system and can be ordered.

 

Secondly the representative of the defendant Bank stated in Court that they were aware that the business of developer, Promociones Eurohouse 2010 SL was that of property development.

 

Thirdly they stated that the account to which the buyers payments were made was the only account that Promociones Eurohouse 2010 SL had opened in that Bank.

 

Fourth, they stated that the account was managed by the business department of the Bank.

 

Therefore, if Promociones Eurohouse 2010 SL is dedicated to the promotion of housing under construction, the account opened in the Bank was the only account the developer opened at that Bank and the account was managed by the Banks business department in order to grant mortgages and credit facilities, then it is clear that the Bank should know that funds paid to this account was for homes under construction as this is the main source of income from the activity of a property developer.

 

From this it follows that the account was considered a Special Account for the purposes of Article 1.2 of LEY 57/1968 and that the Bank must fulfil its obligation to ensure the funds paid in advance for the price of homes under construction were legally guaranteed, and by not doing so the Bank incurs liability.

 

In this case the buyer’s amounts were paid to the account by cheques from Olé International, a property company, and this leads us to conclude that the defendant Bank had strong indications that this amount had come from buyers of off-plan properties and must therefore meet its supervisory role according to Article 1.2 of LEY 57/1968.

 

It is true that the Purchase Contract stated that the designated account for off-plan payments was held in BBVA, however the fact that the buyer paid funds to the developer via his legal representative in Spain and that the funds were finally paid to the developers account in a different Bank to that mentioned in the Purchase Contract cannot harm the buyers.

 

As such the defendant Bank must take responsibility and be accountable for the buyer’s two payments made to the developers account opened in its offices”

Benadalid, Malaga, South eastern Spain, at facebook.com



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Legal tip 1262. Is my property free after repaying full mortgage?
17 February 2015

Once you have paid last installment of the mortgage debt, you have got two options:

  1. To do nothing: in that case, the registration information will remain there for twenty years, after which the registration should automatically delete it.The charge will be showed there before third parties which might be an inconvenient.

 

  1. To remove the mortgage record from Land Registry, so official records show a free of charges property before third parties. Steps to be taken are as follows:
  • To request a certificate of zero balance from our financial institution. Bank is obliged to provide it free if we have satisfied all mortgage principal.
  • To bring this certificate to a notary and request mortgage cancellation deed.
  • To fill in the form of stamp duty tax (Form 600) in the corresponding tax office. The act is subject to tax, but exempt, so no tax cost.
  • To obtain registration of this from Land Registry.

Again, lifting the charge of mortgage is not mandatory, but necessary if we want to sell or get a second mortgage on the same property. 

"Cortijo del Palancar", near Ronda, Malaga, South eastern Spain, at facebook.com



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Legal tip 1261. Buying my sunny property. What is Plusvalia tax?
16 February 2015

The Tax Increase in Value of Urban Land (Plusvalía) is a direct and optional municipal tax.

What land is taxed?

Only land of urban nature, not of rustic nature. Tax is on land value and not on building value. Generally, the cadastral value.

 These cases are not subjected to tax:

- Contributions of assets and rights by spouses to marital goods community, allotments in their favor and transmissions that are made to spouses in payment to their common assets.

- Transfers of property between spouses or on behalf of children, as a result of the enforcement of judgments in cases of annulment, separation or marriage divorce, whatever the matrimonial regime.

- The case of a merger or takeover of companies or industries, if it involves the continuation of activities.

- Contributions to compensation boards, awards for subdivision of lands and mandatory assignments to urban municipalities.

Who has to pay Plusvalia?

In case of transmissions by lucrative title (eg: donations or inheritances) the person acquiring the property or for which a real rights is transmitted.

In the event of transfers by onerous title (eg: a sale) the person transmitting the property or real right.

Covenants arising between the parties in regards to Plusvalía are not obligatory to the Tax authorities. 

If the payer is a foreign resident, law provides that tax will be paid by the substitute payer, who is the other party involved in the transaction.

Exemptions and discounts

Most significant exemption is for the transmission of goods included in historic-artistic areas or who have been individually declared as cultural assets when their owners can prove they have performed works of conservation, improvement or rehabilitation.

There is other exemption when the amount of the resulting clearance is less than 6 euros. 

In terms of bonuses, the most important one is that referred to transmissions by death. This bonus is optional for the Local Council and can reach 95% of the whole amount. The substantive and formal aspects of this bonus are to be established by the City Council in its tax regulations.

Another bonus is applicable under Law 49/2002 on the taxation of non-profit entities, which will apply to goods already subsidized in the IBI.

Items for determining the tax amount

The  necessary elements to determine the tax amount to be paid are twofold:  tax base and tax rate.

Tax base is the increased land value shown at the time of accrual and experienced over a maximum period of 20 years. The two elements that must be taken into account in calculating the tax base are: the land value and the percentage increase.

- The value of the land: The cadastral value at the time of the chargeable event.

-In the case of usufruct, calculation will be made according to standards established in the regulations governing transfer tax and stamp duty

-In cases of expropriation of land, value to be used is the appraisal value (justiprecio). If the cadastral value is lower, this will be used.

- The percentage increase is calculated by multiplying the number of full years since the last transmission by a coefficient established by the City. This ratio can be adjusted within the limits established in the Local Finance Law.

The tax rate is determined by the City Council in the regulatory tax ordinance, without exceeding 30%.

How is the tax calculated?

The calculation of the tax revolves around two elements:

- The increase in land value, which is determined objectively.

- The tax rate, which is established by the Local Council.

As elsewhere in the tax system, different tax acmounts can be distinguished:

- The gross tax payable: results from applying the tax rate to increase land value calculated objectively.

- The net amount results by decreasing gross amount with bonuses.

- The differential fee: in the case of IVTNU is same as payable net amount, since there are no payments on account, installment payments, withholding or similar concepts.

Chargeable event

The tax accrues at the time of transmission when transfer is made inter vivos. Most common fact is a sale where the chargeable event will be on the deeds date. 

However, in cases of transmission through death, chargeability does not occur on the date of acceptance of the inheritance, but at the time of death of the deceased.

Tax declaration

In cases of inter vivos transfers, deadline for filing is 30 working days from the date of transmission.

In cases of transfers upon death, deadline will be 6 months, extendable to six months more on request of the interested party.

Late declarations

- If declaration is made within three months following the deadline for filing, a surcharge of 5% will apply.

- If declaration is made between the third and sixth month, surcharge will be of 10%.

- If declaration is made between the sixth and twelfth month, surcharge will be of 15%.

- From the twelfth month, surcharge is of 20% with application of delay interests from month twelfth.

If payment of the tax debt is done voluntarily, there will be a 25% reduction of the amount which has been charged for late declaration.

Peñón "El Cuervo" and the beach "La araña" (Malaga, South eastern Spain), at facebook.com

 

 



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Legal tip 1260. Buying my sunny property. What is IBI tax ?
12 February 2015

The IBI tax is local tax  on property, both urban and rural, which is accrued yearly. The collector of this Tax is the Local Council where the property is located.
 
The tax amount is calculated on the cadastral value of the property and determined by such other factors such as surface, specific location...
 
IBI rates vary from town to town, mainy depending on size of the town.
 
Non payment of IBI tax is attached to the property which generates it. So, if you are buying a property, it is very important you verify if all the yearly IBI taxes have been paid.
 
Provision 64 of the Local Taxes Act explains how  property it self is liable for unpaid local property taxes due... that is why your lawyer and the Notary needs to expressly check on the status of the this tax payments. The report on this status need to be provided up to date by the Administrator of the Community of owners.
 
The abovementioned provision says that in the event of transmission of ownership rights of properties, the estate itself will be subject to the tax liability in a subsidiary way under the terms of the General Tax Law.  It means that if the debts are not paid, the Local Council can place an embargo on the property.
 
For this purpose, notaries that authorise the signature of a public deed  for transmission of ownership will specifically ask and warn regarding:
 
1.     Pending IBI debts on the property.
2.     Deadline for payment of the debt.
3.     Liabilities involved if not paying.
 
Liability is jointly and severally distributed among all co-owners according to Cadastre records.
 
 
Algatocin (Malaga, South eastern Spain), at facebook.com


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Legal tip 1259- Do you prefer your lawyer look like this?
11 February 2015

Las Chapas, from the hermitage of Santa Ana (Canillas de Albaida, Málaga, South eastern Spain), at facebook.com



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Legal tip 1258. A clause for rental with option to buy
10 February 2015

The clause of the contract you need to use is something like this:

“The parties agree that before the term of the present contract, ...........YEARS, comes to an end, the tenant should be able to acquire the property of the real estate – object of this lease. 

To purchase the property, the tenant must formally inform the landlord about it within the last month before the date of expiration.

In case of possible purchase the sale price of the dwelling would be (
HERE is where most flexibility and adapatation to market rules are advised)  the normal market price  of the said moment. This price will be reduced by the amounts already paid as rentals. 


The sale of the real estate would be formalized by a public deed, free of charges. And the payment of the whole agreed price must be done in the moment of the deed signature. 

Expenses and taxes originated by the sale would meet the requirements of the Civil Code.


Any of the parties shall be able to register this lease to purchase contract in the Land Registry. The cost of the registration would be paid by the party who promotes it.

Of course, we always advise you to use a good lawyer to take charge of the drafting of this kind of contract.

Best rainy tuesday,

Maria

Benalauría, Málaga, South eastern Spain, at facebook.com



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R-egal-o tip 1258- Many whole villages on sale in Spain
06 February 2015

With a bit of strategy, this could be the investment. We can direct you there, if you please

 

Grazalema, Cadiz, South of Spain, at facebook.com



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Legal tip 1257. Deposit contract in simple terms
04 February 2015

Once you sign a deposit contract for the purchase pof a house, you are tied to its conditions which might impact the full acquisition, so....pay good attention:

 These are all details contained in that agreement:

1.- Personal identification of seller and buyer

2.- Enough, official and clear identification of the property (Nota simple required,click here for more information)

3.- Definition of the contract which is being signed ( very important as this impacts refund rights if you withdraw) agreed price, method of payment (expressing if any amount is delivered as a deposit or on account of the price)

4.- Expenses and Taxes payer.

5.- Time within the public deed needs to be signed

6.- Implications of cancellation agreement

The more in detail and tight, the more peaceful your purchase process will be.

Sierra of Las Nieves. To the end: Gibraltar and Africa.At facebook.com

 

 

 



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