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Law in Spain

Law in Spain is a dedicated Blog to advise British Expats living in Spain about their legal issues through the expertise of Abad Abogados lawyers. The main purpose of this blog is helping Expats to find useful and updated legal tips to deal with Spanish Bureaucracy.

UNANSWERED BREXIT QUESTIONS
10 April 2017

Less than two weeks ago, Theresa May triggered what we all know as ‘Article 50’ which means that the two year separation process from the EU is now underway.

As with the Referendum in June last year, many expats, including several of our clients, immediately panicked thinking that their lives would be affected by all the changes that the UK leaving the EU would involve.

But now like then, the bottom line is BE PATIENT. Nobody actually knows as yet what the negotiations will arrive at during the next two years. So we just don’t know what changes will be made in respect of us ; living here/residency in Spain, working in Spain, receiving health care or education in Spain, receiving UK pensions here and owning property. All of these issues will of course need to be addressed in due course. But as for now, everything stays as it was prior to the start of negotiations.

The first meeting post triggering the Article for all the remaining 27 member states will take place on 29th April – the UK will not be able to take part in the negotiations.

It is very much a case of ‘wait and see’ as no one actually knows how this process will ‘pan out’. After all, there are 43 years of treaties, covering thousands of topics to unravel. And as this is the first time the Article has been triggered the process will pretty much be made up as they go along it appears!

It could even take more than the prescribed two years to reach an agreement but only if this were to be agreed by all 28 members (i.e. including the UK).



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Bank successfully sued by British buyers who lost hundreds of thousands in payments up front to the bankrupt developer of Trampolín Hills.
23 January 2017

Following the ground-breaking Supreme Court Ruling towards the end of 2016, making banks as guarantors responsible for amounts paid up front to developers who subsequently don’t complete the project, the Caixa bank has received yet another blow: it has to return 402,350 euros to the fifteen buyers in Trampolín Hills Golf Resort in Murcia.

The ruling, which can still be appealed, forces the bank to respond as a guarantor for the bankrupt construction company.

The buyers paid money on account of the Trampolín Hills development, which was promoted in 2006 in Campos del Río, Murcia, but never came to fruition.

The judgment was made by the Court of First Instance number 1 of Murcia, where the amount payable was estimated as a result of the lawsuit filed on behalf of the British buyers.

The fifteen British clients joined together to make their claim for the money they had paid up front for the purchase of their future homes that were never built. As in previous cases, the amounts paid in the bank by these clients were not entered into the required special account, opened for the exact purpose in favour of the promoter, but in another account of a different nature.

The Murcian promoter has been in bankruptcy since 2010 and there are numerous claims in process against them for fraud and civil claims in courts throughout  Murcia and other Spanish provinces as well as in other parts of Europe,  with allegations of fraud that are estimated to  exceed 62 million euros.

We at Abad Abogados have filed numerous lawsuits against financial entities for the recovery of payments made to bankrupt promoters, so if you or anyone you know have suffered as a result of a similar situation then please do not hesitate to contact us so that we may review  the legal feasibility of your case.

 



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MORTGAGE FORMALISATION EXPENSES IMPROPERLY CHARGED BY BANKS CAN BE RECLAIMED
22 December 2016

The Supreme Court Judgment 705/2015 of December 23rd declared the clause by which BBVA imposed on borrowers the payment of all expenses, taxes and commissions related to mortgage loans to be abusive.

By virtue of this, they will be able to reclaim:

 Notary's and Land Registry’s invoices- The expenses corresponding to the formalisation and registration of notarial deeds, necessary for the constitution of an effective guarantee i.e. of the mortgage

Stamp Duty. The Supreme Court understands that the taxable person is the Bank or Lender, and not the borrower.

The same as what happened with "floor clauses" (cláusulas suelo), the content of the Judgment opens the door to considering similar clauses of other entities as equally abusive and void.

The first step to recover the amounts would be the filing of a claim with the Bank itself. If they do not answer within two months or reject the request, then the case may go to court.

The term of the claim, for those mortgages in force, is four years from the day following the date of the said Judgment. Therefore, the deadline would be the 24th of December 2019.

For those mortgages that have been fully paid, the claim can still be made, if the total payment was made within the four years prior to 23rd of December 2015.

As this is a complex legal issue, we advise you to contact expert lawyers.



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BANKS WILL HAVE TO PAY BACK ALL EXCESS MONEY CHARGED FROM ‘’FLOOR’’ CLAUSES (CLÁUSULAS SUELO)
22 December 2016

The EU Court of Justice ruled on the 21st December 2016 in respect of floor clauses (Cláusulas suelo): Spanish banks will have to return to customers the total amount of what they received in relation to floor clauses.

The Spanish Supreme Court, in the famous 2013 judgment on floor clauses, ruled against the banks, but limited the compensation to May 2013, due to the country's then financial situation.

However, as of today, all amounts irregularly paid since the signing of the contract can be claimed back The judges of the EU Court of Justice considered that "the judicial declaration of the abusive nature of a clause should have the effect of restoring the situation in which the consumer would be found in the absence of such a clause." Those affected by floor clauses cannot be limited in time.

This is a huge blow for banks, since they must now decide what to do with the claims that they will receive. Although some entities consider that the amount is lower, the Bank of Spain indicated in a report that the financial institutions will have to pay around 4,200 million euros.

In the event that a claim against an entity is unsuccessful, it must be taken to court.

For more information, you can contact “Abad & Asociados”: mortgage@abadabogados.com

 



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Buying a Property? Who’s responsible for paying the Council Tax (IBI)?
01 December 2016

The official name for what we sometimes call ‘Council Tax’ in Spain is IBI – Impuesto sobre Bienes Inmuebles, which simply translates as Tax on property/real estate.

By law, the person who owns a property on the date on which the IBI starts to accrue is the one who is responsible for the payment of the tax for that whole year.  In Spain the tax/fiscal year runs from January to December and IBI starts to accrue, although doesn’t need to be paid by, the 1st of January each year.

When you are buying a property, the Title Deed will usually state that the IBI is all paid up to date by the vendor and it’s quite uncommon for the vendor to demand a proportional part of the tax back from the buyer relating to the part of the year which remains once the sale has taken place. For example: If the sale takes place on the 30th June, the vendor could  try and negotiate with the buyer that 50% of what he has paid should be borne by them, but this isn’t common.

A RECENT JUDGEMENT TO BEWARE OF!

Be aware that the situation has changed as a result of a recent judgement by the Supreme Court.

Now, when buying a property, buyers need to ensure that in the title deed it states that the vendor be responsible for the entire payment of IBI in the year which the sale takes place. If this isn’t expressly stated, the vendor has the right to demand the proportional part of the tax from the buyer for the remaining days in the year, post-sale.

The Court found that even though the owner on the 1st of January should pay the tax, this repercussion is possible – that the vendor has the right to demand the proportional part back.

Furthermore, it found that this right exists even if the Title Deed hasn’t made mention of it. In fact, this judgement arose in a case where the Title Deed hadn’t made any specific reference to it and where the sale took place ‘free from liens and charges’.

So our advice if you are buying:  Make sure that the deed expressly states   that the vendor assumes the responsibility for paying the IBI in full that year and that they will not demand any part from you for the remaining part of the year.

 And our advice if you are selling: Why not use your right of demanding the proportional part of the IBI post sale as a negotiating factor when agreeing a selling price?

We at Abad would be happy to assist you in buying or selling your property so please do not hesitate to contact us via our web page shown in the links to the right.

 

 



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General Information regarding Visas
25 October 2016

Do you need a Visa to travel to Spain?

People holding passports issued in the European Union*, Iceland, Liechtenstein,Norway or Switzerland do NOT require any type of Visa to visit Spain. This applies to visiting, living, working or studying in Spain. This is because of the Freedom of Movement Act.

 If they  plan to stay in Spain for more than three months, they would however need to apply for residency.

In addition, Spain allows entry to many other countries without a Visa, as long as their stay is for less than 90 days in any 180 day period. For example: Argentina, Australia  ,Brazil , Canada , Chile , Colombia, Japan , Mexico , New Zealand , Peru , and USA to name but a few.

A Visa is required for other visiting citizens from some South American countries (for example Bolivia), most parts of Africa (including Morocco),  Asia including China and India and Russia.

*Obviously, noone knows how ‘Brexit’ will affect the requirements for British citizens in the future, but as nothing has changed since the vote and won’t until the exit from Europe is underway ( if at all) then all information contained here applies equally to the UK.

Different Types of VISA.

There are three types of visa for entry into Spain:

  • Airport transit visa – this allows you into the international transit zone in a Spanish airport if a stopover is required. The airline should be able to advise you prior to travel of the requirements for this type of Visa.
  • Short-stay Schengen visa
  • Long-term visa

The Schengen Area/ Visa

In addition to free movement amongst EU/EEA member states, there is also an area known as ‘Schengen’ . The Schengen Area operates very much like a single state for international travel with external border controls for travellers entering and exiting the area, and common visas, but with no internal border controls. Spain is a member country of the Schengen Area.

A short-stay Schengen visa (visado de corta duración) allows you to stay in Spain – but not work – for up to 90 days in a 180-day period.

The requirements for this type of VISA are quite extensive and can take anything between 2-4 weeks to obtain. So you should ensure that you allow yourself enough time before travelling to obtain one.

Long-term Visa (Visados de larga duración)

This type of Visa is required to live, work, study or carry out research in Spain.

Again, the requirements are extensive so obtaining the help of a legal advisor like Abad is highly recommended. Applications take approximately one month.

If your application is turned down, you can present an appeal within two months at the Court of Appeal in Madrid (Tribunal Superior de Justicia de Madrid).

We at Abad can help you obtain the required Visa so please do not hesitate to contact us.



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Banks face being sued by even more Law Firms, for millions of pounds, for money which was ‘lost’ during the buying of off-plan properties/projects.
20 September 2016

In a recent article in ‘El Mundo’ it was estimated that 600,000 individuals could be affected by these claims, 30% of which were from either the UK or Germany.

The situation has arisen primarily due to the risks taken by former savings banks, coupled with the property market decline and more recently by law firms setting precedents following their successful claims against the banks after the ground-breaking Supreme Court Rulings.

The Banks affected to a greater extent are: Banco Popular, Bankia, BBVA, CaixaBank and Sabadell, amongst others.

One recent case against the formerly known CAM bank in the region of  Alicante, which made it to the Supreme Court, resulted in Sabadell bank (owners of the former CAM bank) being ordered to compensate the claimant.

The claims are based on the fact that thousands of house buyers paid amounts up front to developers who had sold them off plan properties/projects just over 10 years ago.

The legal basis of the claims is not new. A 1968 law holds banks responsible for the amounts that were paid in advance for unfinished properties: The Law is 57/68 which covers the receipt of ‘payments in advance ‘in building and selling apartments. The law is crystal clear in that building developers have the obligation to be co-signed by banks, and that banks are to be held responsible for the amounts paid in advance. This law was created to prevent the fiasco of the building developer Nueva Esperanza from happening again, a fiasco that left more than 10,000 Spanish people without houses… and without the payments in advance that they had made for them.

The onset of the recession coupled with the promoters/developers disappearing, leaving thousands of people without homes who had parted with large sums beforehand have created this situation for the banks, along with the help of many law firms who are now specialising in these types of claims and assisting these unfortunate people in obtaining their money back.

Nobody can confirm the total amounts of money which are at stake but a leading firm specialising in such claims in Barcelona for other Europeans as well as Spanish people, estimate that it could arise to 17,000 million euros. And this they feel is conservative – as it Works on a basis of 28,000 euros per claimant.

If you paid money in advance to a developer that did not keep its promise and you do not know how to get the money back, then thanks to this Law and to our Firm you can now finally recover what is rightfully yours.

Contact us immediately to discuss your claim.

 



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A Fresh start for September
30 August 2016

September is one of the times of year when lots of people make resolutions and fresh starts. Normally these revolve around health and getting fit after a long, hot lazy summer!

But it’s also a good time of year to get all of your personal admin sorted as well. Maybe you’ve been putting things off for some time now? Now is a good time to start organising your personal affairs – and this is where we can help you.

If you feel that you may have ignored your financial or legal obligations since moving here to Spain or buying a holiday home, either by listening to others who have made the move or reading articles in the press/on line, then let us help you.

We at Abad can review your personal situation with a wealth of experience and advise you accordingly on the way forward, giving you a full personal ‘MOT’.

Often friends and neighbours offer advice that isn’t relevant to your particular situation and that is why it is important to speak to an expert.

We can advise you on the following:

  • Wills and most importantly the dangers that may be faced should you own property in Spain and not have one
  • Tax residency – not sure if you are tax resident here or in the UK? The answer to this question will affect which annual returns you have to make here in Spain, so you need to get it right
  • Non-residents’ taxes – when and how much is payable
  • Residents’ taxes - when and how much is payable and additional information which may or may not need to be reported about your financial situation
  • Inheritance tax – should you or your spouse pass away, how will  this tax affect you
  • Probate – how we can take away the stress of dealing with a loved one’s affairs when they pass away
  • Council tax (IBI)
  • Buying/selling your property – the process explained simply should you be considering this now or in the future
  • And lots more………..

 

For this advice or any other questions you may have please contact Abad Abogados by following the link to the right of this page.



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The Aftermath of BREXIT
07 July 2016

Who can believe that it was just over a week ago that we discovered the shocking news that Britain had in fact voted out of Europe!

And with an eventful few days of politics following the groundbreaking decision with everything seemingly ‘up in the air’ and no one really knowing which direction they will be moving in,  many of you have been left reeling and wondering just what does it all mean to your future here in Spain as ex-pats.

There are between 700,000 and one million Brits estimated to be ‘living the dream’ here in Spain. And speaking to many of our expat clients they all seem to have the same worries:

  • Will they be able to continue living/working here in Spain?
  • Will people moving here from now on find it difficult to get residency coming from a non- EEC country?
  • Will property prices fall again after seeing the first improvements in many years since the recession?
  • What will happen to their Spanish Wills – many recently having been amended to incorporate recent clauses in European Law? And in the event of an Inheritance?
  • And amongst the older communities especially, will they continue to be able to access the Spanish Health system as they can now?
  • Will they be able to afford to live here if the pound continues to fall against the euro? On announcing the result of the vote the pound crashed recording its biggest fall in over 30 years.

 

 

So, is it all doom and gloom????

 

Firstly, the main point to note is that under Article 50 of the Treaty on European Union, Britain has two years to negotiate its exit deals with EU member states so until these deals are negotiated, for the next two years or so, EVERYTHING WILL ESSENTIALLY REMAN THE SAME because the UK will remain part of the EU during this period.

 

So health care, pensions, residency etcetera will all continue as they are at the current time.

 

And in the future, in all honesty, no one can be sure of how it will affect you until the deals are done.

 

 Obviously free movement between Spain and Britain existed pre Europe, so one would suppose that this would continue indefinitely. However, more stringent rules may be applied to Brits hoping to work here in Spain. Working visas or permits may be required and a points system may be introduced in the decision process for residency and the right to work.

 

With regards state pensions, at the moment UK citizens who live in the European Economic Area (and Switzerland) have their state pensions protected - in that they are linked to wage or price inflation.

The UK government will now have to decide whether this will continue or whether UK pensioners living in EU countries should be treated as they are if they had retired to a non EU country, Canada, for example, where pensions are frozen, so this is likely to form part of the renegotiation process.

 

The UK's exit has to be negotiated with the remaining 27 members of the EU and ultimately approved by them. Once the UK tells the EU that it is withdrawing under Article 50, the member of the European Council representing them will not participate in the Council’s discussions or in decisions concerning its exit.

 

Despite the treaty stating two years to make agreements, in reality the whole process is likely to take anything up to 10 years say some experts.

 

 



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Recovering the Money you paid in advance to a buiding developer.
06 June 2016

There is still hope of recovering the money if you were affected by a failed housing promotion in Spain.

A law from 1968 holds banks responsible for the amounts that were paid in advance for unfinished properties: The Law is 57/68 covering the receipt of ‘payments in advance ‘ in building and selling apartments. The law is crystal clear in that building developers have the obligation to be co-signed by banks, and that banks are to be held responsible for the amounts paid in advance. This law was created to prevent the fiasco of the building developer Nueva Esperanza from happening again, a fiasco that left more than 10,000 Spanish people without houses… and without the payments in advance that they had made for them.

Banks state that many developers did not follow the guarantee procedures in order to save on costs, which, after their liquidation, would hypothetically leave buyers without any chance of claiming these amounts. However, the Supreme Court judgment of 21 December 2015 is clear in this aspect.

“When buying or selling properties under the 57/1968 Law, credit entities that admit to having received payments from the buyers in the developer’s bank account without demanding that a special account with the respective guarantee be opened, will have to take responsibility regarding the buyers for the whole of the amounts paid in advance to the developer’s account or accounts opened within the said entity”

According to the BBC, in the United Kingdom there are nearly 100,000 people affected by the Spanish real estate fiasco, and there have already been plenty of positive judgements.

If you paid money in advance to a developer that did not keep its promise and you do not know how to get the money back, today could be your lucky day! Thanks to this Law and to our Firm you can now finally recover what is rightfully yours.

Contact us immediately to discuss your claim.



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