Handing in the keys

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22 Apr 2009 00:00 by manorpark Star rating. 165 posts Send private message

manorpark´s avatar

Does anyone know what would happen if one handed the keys over to the bank and walked away from their property ?                     If the property is in negative equity could the bank take out legal proceedings to recover the balance of the mortgage if they were to sell the house and the sale of the house did not cover the mortgage?

I would be interested to know what the position of the property owner would be in a situation like this.

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22 Apr 2009 17:00 by mariadecastro Star rating in Algeciras (Cadiz). 9298 posts Send private message

Legal Questions? Speak to Maria Direct

A couple of pieces of advise:

1.- Offer formally ( in written with irrefutable proof of acknowledgement of receipt) the property as paymnet of your debt BACK to the Bank BEFORe you are in arrears.

2.- Once you have done so, try to settle with the Bank for the full amount to be covered with the property. A property financial/valuation report is needed.

you may find this information useful too:


Legal tip 27: Keys back to the Bank: a right.
Thursday, January 15, 2009 @ 2:51 PM


Dación en pago ( dation in payment) is not something that you  will luckily and graciously obtain by the "wonderful mercy of the Bank"  BUT A RIGHT, out of provisions 1175 et seq of our Civil Code:

Article 1175.

The debtor is entitled to transfer their assets to creditors in payment of its debts. This dation, unless otherwise agreed,  will only  release him from liability for the  liquid amount of  the value of  transfered assets. Any agreement on the effect of these dations  concluded between the debtor and its creditors will be done according to provisions of Title XVII of this book,  and according to what is stated in the Code of Civil Procedure.

The offer of payment and the assignemt for collection

Article 1176.

If the creditor to whom the offer was made  refuses to admit it with no reason given, the debtor will be free of responsibility by the assignment of the good.


Article 1177.

For the assignment of the good to be effective, the debtor must  firstly announce it to those people interested in the obligation.

The assignment will be uneffective if it does not strictly conform  to the rules governing the payment.

Article 1178.

The appropriation will be made by depositing the goods before the judicial authority, to whom the offer will be credited in some cases, and /or the announcement of the assignment in others.  Once the assignment is made, it will have to be announced to interested parties.
Article 1179.

The costs of the assignment ,  where appropriate, will be paid by  the creditor.

Article 1180.

 Once the assignment has been duly made, the debtor may request the court  to cancel the obligation.

While the creditor has not accepted the assignemt or the approval of the Judge has not been made,the debtor may withdraw the assigned good or amount,  leaving the  obliagtion remaining.

Article 1181.

Once the assignment is made and the creditor allows  the debtor to withdraw the good or amount,  the debtor will lose any preference on the good. The co-debtors and guarantoors will also be  free of debt.


Maria L. de Castro, JD, MA


Director www.costaluzlawyers.es

El blog de Maria

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