Debt status certificate

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09 Aug 2019 12:04 by hugh_man Star rating in Kent/Roda . 1557 posts Send private message

hugh_man´s avatar

No idea why some lawyers in Spain ** EDITED ** will not ask the Community Administrator for a Debt Ststus Certificate on behalf of new buyers of an apartment in a Community.

Surely this should be automatic.

Any Debt remains with the property and new owners become liable.

Buyers beware when you are considering buying a previously owned property and push you lawyer to obtain  a debt certificate.

 


This message was last edited by hugh_man on 09/08/2019.


This message was last edited by eos_moderators on 09/08/2019 20:53:00.



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09 Aug 2019 13:14 by ads Star rating. 3829 posts Send private message

Shouldn’t the notaries be checking on this also Hughman as part of their responsibilities?

This article identifies various pitfalls when buying property.

https://www.spanishpropertyinsight.com/buying-property-in-spain/notary-in-spain/

 

 

 


This message was last edited by ads on 09/08/2019.



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09 Aug 2019 13:25 by Kavanagh Star rating in Oil Drum Lane Newcas.... 606 posts Send private message

Kavanagh´s avatar

Bought a property 10 years ago, never heard of a Debt Status Certificate then or after. Sounds to me that anything you do in Spain is at your own peril. Seems the legal profession and all those associated with it are like the KGB.  



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09 Aug 2019 13:36 by ads Star rating. 3829 posts Send private message

Our posts crossed Kavanagh.

Worth repeating that this article https://www.spanishpropertyinsight.com/buying-property-in-spain/notary-in-spain/ identifies some important differences in Spain.

When you buy a property in the UK you exchange contracts, pay the vendor, get the keys and the property is yours, after which you are free to register your title in the land register. The big difference in Spain is that you can’t inscribe your title in property register – Spain’s version of the land register – unless a Spanish notary witnesses the deeds of sale. Under Spanish law a notary’s signature is required to ‘elevate’ a private contract into public deeds that can be inscribed in the land register, so the bottom line in Spain is no notary signature, no inscription in the property register.

But is inscription of your title in the registro de la propiedad really necessary? In theory no, as a private contract between buyer and seller is fully binding on both parties (though not on third parties). Some Spaniards, especially in rural areas, own property that is not inscribed in the register, thus saving on the hassle and expense (notary fees, registry fees and taxes) of inscription. And curiously there is much more property inscribed in the property register than exists in all of Spain, so something is not quite right. For British buyers, however, it is crucial to inscribe their title in the property register, as it is the only truly secure form of property ownership in Spain. The first person to inscribe title to a property gets to keep it, which is all the reason you need. There are other advantages too, for instance protection from the vendor’s creditors and the ability to take out a mortgage against your property. So all buyers need to complete their purchase in the presence of a notary if they are to enjoy the benefits of inscription in the property register.”

But most concerning is the following

Be careful when buying resale properties from foreign vendors who have large mortgages: there is a small risk that they will take your deposit and skip the country, after which the mortgage lender will sell the property to pay off the mortgage and you may be left with nothing. When the vendor is a foreigner with a large mortgage you should avoid private contracts with deposits and go straight to signing the escritura – the public deeds before notary.

When buying a newly built property from a developer you can sign the escritura and make the final payment once the property has been certified as duly completed by the head architect. Unless you have agreed to sign deeds for a property under construction, which is always best avoided, you are not obliged to sign the escritura until the developer can produce the certificado de final de obras signed by the architect.”





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09 Aug 2019 13:52 by Kavanagh Star rating in Oil Drum Lane Newcas.... 606 posts Send private message

Kavanagh´s avatar

Hello Ads that is interesting.

Would it be wise to take out the minimum mortgage (even if you don’t need one) without redemption costs when buying a property in Spain then pay it all off? Would this give you total protection or at least more protection in a system where lawyers don’t give a toss.



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09 Aug 2019 14:04 by ads Star rating. 3829 posts Send private message

I don’t know Kavanagh but this other article goes on to explain further complications with regard to mortgages and changes in mortgage regulation. It appears to be a minefield of complexities!

https://www.imsmortgages.com/blog/changes-to-spanish-mortgage-regulation/

Spanish lenders in particular have come under scrutiny over the past few years for dubious activities like implementing floor rates ( the rate below which your rate could never fall) along with lack of explanation of the products and restrictions and lack of flexibility within the market.

Much of the new law is to be recommended as long overdue but as is often the case with new legislation much of what has been published has been put together by people who make rules but do not know how they will be implemented or the feasibility of implementing them and sadly parts the new mortgages in Spain legislation falls into this category in many aspects.

New rules that are intended to improve the situation for the end user actually become tick box procedures that in themselves are meaningless and for a few months there is no doubt much confusion will reign and many Spanish Banks will make knee jerk policies that may in fact be of detriment to potential buyers of property in Spain and indeed in some instances preclude some borrowers entirely.

The key changes are explained below but at present the implementation of many of these and how they will work is not clear. Even at senior branch level Spanish Bank staff are still unclear as to how the new procedures will be implemented, what each Banks legal teams have interpreted as requiring a change and which bits of the law are general guidance rather than specific changes.”

It goes on to note some uncomfortable realities...

“As from the 16thJune the mortgagee in Spain or their POA must visit the Notary within the 10 days before completion and no later than one day before to answer a checklist of questions to ensure that the contract that is to be signed and the terms and conditions of the loan are understood fully.

It is not clear but it is believed that if you cannot personally visit the Notary your POA will be required to have passed a financial test to allow them to do this on your behalf. It is difficult to know how many Lawyers will be willing to undertake this to allow them to sign for a mortgage at completion so it must be assumed that no longer will a buyer be able to complete if they require a loan without making arrangement to travel themselves not only for day of completion but prior to this to visit the Notary.

This also means that arranging a completion day will become more fraught as the Notary must make time for this part of the procedure as well as the signing itself and this will need to fit in with what the Bank can do and when they can do it along with what the seller can do and when they can do it.

It will almost certainly increase the cost of the whole transaction higher Notary fees, flight costs and accommodation.”





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09 Aug 2019 14:30 by Kavanagh Star rating in Oil Drum Lane Newcas.... 606 posts Send private message

Kavanagh´s avatar

Hello Ads that is also interesting.

But is there no way a Brit or other foreigner who are mostly naive can come to Spain to buy a property and employ some sort of professional with confidence to take care of all these scams, loopholes, neglectful lazy lawyers, could not care less notaries, and of course cheating corrupt banks.

An answer to the question would be appreciated and not a politicians side issue speech.



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09 Aug 2019 14:35 by ads Star rating. 3829 posts Send private message

Hugh man is correct to highlight the importance of a good trusted and knowledgeable lawyer to protect buyers given all of the complexities relating to purchase in Spain, but equally Kavanagh makes a valid point that many in the legal profession have badly let down purchasers, so perhaps the onus should be on the Bar Associations to tightly regulate their members if trust is ever to be restored in Spain.

It is also imperative that the Bank of Spain do likewise with regard to regulating their Banks. Unfortunately this appears a long way off  ( understatement) so in the interim the message sadly remains BUYER BEWARE.

And in the interim check on the UK govt websites

https://www.gov.uk/guidance/how-to-buy-property-in-spain

https://www.gov.uk/world/living-in-spain

 


This message was last edited by ads on 09/08/2019.



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09 Aug 2019 16:31 by Kavanagh Star rating in Oil Drum Lane Newcas.... 606 posts Send private message

Kavanagh´s avatar

Thank you ads.

At least you have been truthful. It is appalling and a disgrace that in Spain you cannot trust a professional like a lawyer ‘’who you are paying good money to’’. The Bar Association should be ashamed of themselves. I dislike the common thieves in society but they admit what they are and you know where you stand, but lawyers are below them and can cause you serious problems when placed in a position of trust.

As for banks we all know they are in it for whatever they can get and they admit it, at least they are honest thieves.

It’s about time someone got a grip of this corrupt and diseased country. The land of no morals.



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09 Aug 2019 17:45 by ads Star rating. 3829 posts Send private message

Kavanagh,

It’s unfair to place all lawyers in the same category as there are some trying to protect the best interests of their clients within the existing system, but having said that what irks many is when the system allows the loopholes and lack of compliance in the first place.

It’s  almost as though no one is prepared to look to the wider perspective and recognise that there are solutions that could be accommodated ( just as a couple of examples, the use of a mandatory system of property registration and provision of debt certificate), which would remove some of the vulnerabilities at source, rather than having to litigate after the event.

But then we are back to the old age argument that some may not be incentivised for this to happen as they have conflict of interests to benefit from lack of mandatory controls, I.e. those residents that don’t want to pay for registration, or those that gain custom from subsequent litigation, or Banks that have repossessed and don’t want to be made accountable for community fees in the interim periods prior to sale.....the conflict of interest list is endless in Spain.

Perhaps the only way is for the EU to recognise all of these conflicts and try to protect via infringement mechanisms that are supposed to be at their disposal, that then disincentivise  a country (in this instance Spain), from leaving scapegoated innocents at risk in this way, via large fines.

Yes another “but” coming here, sorry!..... but then you have those who argue that they don’t want a country’s control to be taken away from them. 

What needs to be recognised in all of this is that there are some instances that need to be controlled ( in a fair and balanced way, I might add) wherever a country refuses to protect innocents who are being used as pawns in this legal conveyancing process, until such time as the Bar Associations, Banks, and real estate professionals are better regulated. Sadly self regulation does not appear to have worked, other than there are a few good souls who appear to have a conscience and are trying their damdest to both educate from within and protect as best they can ( within an unnecessarily complex system) in the interim.

Such is the world of cross border conveyancing, and to be honest it’s something that has tried to be addressed over the years, but the Commission have sadly done little to address this, as this requires treaty change which they are loathe to do. Talk about catch22 isn’t in it!

Anyway enough of that....at least EOS is a forum that tries to keep educating people of the pitfalls , and for that we should all be grateful! :)

 

 


This message was last edited by ads on 09/08/2019.



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09 Aug 2019 18:31 by Kavanagh Star rating in Oil Drum Lane Newcas.... 606 posts Send private message

Kavanagh´s avatar

Very true ads but how does Billy Brit or any other foreigner know who the good, the bad and the ugly are. I say foreigner because they seem to be treated as a meal ticket mug by Spanish lawyers. In your opinion do Spanish lawyers treat Spanish nationals in the same disgusting way?

The major problem here is that the EU or even the Spanish government can introduce laws and regulation to stop all this abuse, but if the regulators (The Godfather Bar Association) stick 2 fingers up at it no progress is made.

It seems that Spanish corrupt culture(Mafia) rules and no government dare take it on for fear of losing power (nose in lucrative trough).

 


This message was last edited by Kavanagh on 09/08/2019.

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09 Aug 2019 19:06 by hugh_man Star rating in Kent/Roda . 1557 posts Send private message

hugh_man´s avatar

Interestingly, I received an email today from our Administrators saying that Mare Nostrum had applied for a Debt Status Certificate, after I advised the buyers to pressure their lawyer for one.

Notaries also appear to turn a blind eye IF all parties are consenting. It’s not so long ago that Notaries turned their back whilst brown enevelopes stuffed with cash passed between buyer and seller.

For clarification, a Debt Status Certificate, supplied by a Community Administrator shows exactly what debt IF any is attached to the property.

This includes Community fees, IBI, car loans or any fines levied on the owner and the remain with the apartment until it changes hands.

Ads, I’m afraid many buyers fail to read the many articles available to them with advice on buying property, relying on agents and lawyers words & work.





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09 Aug 2019 20:47 by Kavanagh Star rating in Oil Drum Lane Newcas.... 606 posts Send private message

Kavanagh´s avatar

Hugh_man

‘’Ads, I’m afraid many buyers fail to read the many articles available to them with advice on buying property, relying on agents and lawyers words & work.’’

That is absolutely true, but back in Blighty not many have heard of EOS and believe and trust the rule of law and those responsible (solicitors) in upholding it as if the whole world behaves like the UK.

Little do they realise when venturing to Spain it is a Mafia dominated society.



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09 Aug 2019 22:07 by ads Star rating. 3829 posts Send private message

Worse still,  the EU Commission are turning their backs on this, Kavanagh,  leaving those scapegoated at risk to fund their own lengthy litigation(s), whilst encouraging the movement of people across member states without any standardised regulatory conveyancing structure in place to protect, or for that matter any effective regulatory Banking structure that protects citizens against ongoing abusive and manipulative practices that have occurred during this last decade and beyond.

Sad but true.

 





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10 Aug 2019 12:32 by ads Star rating. 3829 posts Send private message

Hugh man,

You are doing a great job! I wonder if more whistle blowing should be done to gain progress in this regard?

By the way, I note that this debt certificate is mentioned in the UK govt website https://www.gov.uk/guidance/how-to-buy-property-in-spain#purchasers-checklist

 

But no mention of EOS is made in useful links on that Govt website, or Spanish Property Insight for that matter, (another great educative forum).

Perhaps we should all be writing to MPs via www.writetothem.com to suggest they add this to the Government’s useful links at the bottom of their article relating to purchase in Spain?

Would this be allowed or would this be denied due to marketing restrictions, I wonder?

 

In the absence of good regulatory structures, education and whistle blowing ( where fair and appropriate) becomes all in this scenario, don’t you think?





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11 Aug 2019 10:31 by hugh_man Star rating in Kent/Roda . 1557 posts Send private message

hugh_man´s avatar

PS the prospective purchasers who I mentioned are Scandinavian as are many of the new buyers in Spain, many Brits are choosing to rent to check out the problems.

Many appear to be getting the message.

In this day and age though it is not too difficult to Google, Buying a Property in Spain and I would gaurantees EOS would be one of the many pages on offer.

Buyers, act on impulse however, not on sound research and has been stated, rely on the legal & professional systems in place to protect them from harm.

There is little recourse to appeal against poor standards in Spain, let alone to the EU who are supposed to be advising on regulations.

Strsight bananas, yes but purchasing property abroad, maybe later. 😂😂 Tongue in cheek remark.





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11 Aug 2019 11:37 by Kavanagh Star rating in Oil Drum Lane Newcas.... 606 posts Send private message

Kavanagh´s avatar

If all prospective purchasers did do their research on google and viewed the horror stories many would run a mile.

If lawyers and the legal profession, who purchasers pay good money to and rely upon, did their job correctly many of these horror stories would not exist. I am sure there may be some good lawyers somewhere, but it seems many are spivs including the mafia controlled Bar Association.



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11 Aug 2019 14:07 by ads Star rating. 3829 posts Send private message

Kavanagh,

Are you suggesting that the educative process should include the message that the Bar Association in Spain is untrustworthy and not prepared to tackle those law firms who do a grave disservice to the conveyancing process in Spain?

Or are you saying that the loopholes in the current conveyancing process that allow Banks to play roughshod over the justice system by their ongoing abusive practices ( as has occurred with the proliferation of mortgage floor claims, Bank Guarantee claims, failure to pay their community fees on repossessed properties etc), lack of mandatory provision of debt certificates and registration of properties, etc, is at fault?

 


This message was last edited by ads on 11/08/2019.



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11 Aug 2019 14:24 by Kavanagh Star rating in Oil Drum Lane Newcas.... 606 posts Send private message

Kavanagh´s avatar

Ads you can put it anyway you want, but it is a fact that the whole legal profession in Spain including those who regulate it is a disgrace and not fit for purpose.

The same can be said for the banking industry, but can we deal with each one separately.

Unfortunately foreigners are completely unaware until they have been robbed by both spiv industries.



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12 Aug 2019 11:29 by hugh_man Star rating in Kent/Roda . 1557 posts Send private message

hugh_man´s avatar

Sadly, I find it difficult to disagree.

Many owners however are perfectly happy with their property ownership in Spain, blissfully unaware of the various tactics used by both banks and some in the legal profession.

Lack of adequate regulation IS indeed a major cause.





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