El blog de Maria

Very recent, dated the 25th of November 2010:

Case Law by Cantabria Appeal Court, section 4, in Santander. A new great judicial understanding of Law 57/68:

Some relevant statements of said Court decission:

In THIRD paragraph: Law 57/68 aims for the protection of the buyer when he advances good amounts of  money before the house is built, covering breaches of the developer and unsolvency ( more or less fortuitous) as it has been frequent in recent times. The rules contained in said Law are imperative and cannot be waived. The  advanced payments of the buyer before the building, is balanced with the obligation of the existence of this Guarantee or Insurance Policy ( several Court decissions since 2005 to our days back this).

It is a matter of contract balance again. Balance of risks and guarantees.

In FIFTH paragraph: The imperative and inalienable rules contained in Law 57/68 are obligatory to developers, banks and Insurance entities. The breach of these obligations by professionals: developers and financial institutions can never be to the detriment of the buyer.

In SIXTH paragraph: The legal relationship between buyer and Financial Institution it is not out of the contract but out Law 57/68. Law requires the financial institution to guarantee all deposited amounts:

1. Through the opening of a special Bank account

2. Through the custody of said special account so that all the amounts paid as advanced payments are effectively deposited in said account.

3. Through the transfering into that account of all amounts which might be paid into a different account

4. Through the vigilance for all the amounts to be used for building purposes.

The Finantial Institution needs to know the business of the developer and request this to notify in an exact way all amounts paid by each one of the buyers so, the Bank Guarantee is for all amounts.

The only statement that it is not in this Court decission, because it is not what the Judge is deciding about with the same is what Law 57/68 sayd undoubtedly: The bank receiving adavance amounts needs to request the existence of those Bank Guarantees under its risponsability.

In our Civil Law legal system we do not need a judicial statement for something to be linking/applicable Law.

 Catedral de Ronda by Merlin_1 at Flickr.com

With a song for hope!

Joy, peace and confidence for the 2011!

Maria and the CostaLuzLawyers Team

Oh yes! what we see now as our failure and our problem it is our future.

During the last decade Spain created a huge amount of residential houses, in a big extent  leaded by the foreign, northern european demand : units for sun, retirement, golf and beach.

The economic and financial moment ( fruit of an uncontrolled over expansion promoted by the crazy financial guys) does not fit the need of occupancy of those properties for the final kick in of the projects but, listen!....... this non perishable goods will be the main source of economic activity for big extensions of the Spanish territory in the future. No doubt.

Ana Patricia Botín, president of Banesto is a fan of reinventing the tourism and second residency model as a most important formula for early new employment rates in Spain. I am utterly with her on this.

We Spaniards need to work side by side with our european friends, most of them residents or willing to reside in these sunny lands, so much in love with our country, for achieving good levels of proffessionalism and competitiveness: all for the same project for the benefit of all: simple, unifying. As Botín understands, this will be possible thanks to the presence of small amd medium sized companies.

 I wish Banks and government understand this more clearly! Possibly soon.

Joy and Hope for the 2011!

Maria

 New Year by ecstaticist at Flickr.com

The new criminal code ( in force since last Thursday, the 23rd of December) gives answer to international obligations, especially on European legal harmonization.

New crimes

* Children recruitment for pornographic performances.

* Prostitution clienting with minors or persons who cannot decide for themselves.

* Terrorism: recruitment, indoctrination, training and any form of financing.

* Piracy.

* Bribery between individuals.

* Mobbing.

* Property harassment.

* Bribery and fraud in sports.

* Computer attacks.

* Illegal trafficking of organs.

* Human trafficking.

·         New legal consequences of crime

Punishments:

Just as another good sign of right justice in Spain, we have recently received a Court decission in favour of one of our clients where the Bank Guarantee is enforced due to the lack of start of the building work.

These guarantees are communly understood and applied when the delay is related to the end of the works, but take note that the delay on starting, when the start of the works date is mentioned in the contract or just an extended period of time with no start, for those cases where starting date is not mentioned in the contract, which makes the contract interest decay, are also conditions for a sucessful execution of a Bank Guarantee.

In the case we recently won, the developer, in a tricky and illegal way, omitted to mention the date of start of building works, but the Judge has considered the amount of time passed without start of works as factual enough according to Law for the enforecement of the guarantee due to delay ab initium.

Yes, keep the confidence up!. Spain is touched by the finacial-real estate crisis but we do have a very solid legal system: no doubt. Do not lose your confidence, that Spain you were dreaming about will come.... we promise.

Best of best,

Maria

Mojacar by Shehani at Flickr.com

The Supreme Court in Spain has recently passed a Court decission by which reiterates the suspension of the Planning projects on " Santa Ana del Monte" ( 2285 houses and a Golf court) who was approved four years ago by the Local Council and which was appealed by a rancher, alleguing some private interest arguments and a public interest reason related to the lack fo water availability.

The Supreme Court approves a precautionary measure for the suspension of the development till the water availability issue is fully guaranteed.

By Snap at Flickr.com

A new:

As you all know, Bank of Spain has requested Banks and saving banks to show their exposure to real estate risk by the beginning of 2011. Some banks have already informed the Stock Market National Commission on the impact of the real estate crisis to their accounts. Bancaja, for instance registered its leaflet by which it informs that its non profitable foreclosed assets by date 30rd of September 2010 is of 3596 millions euros. CAM declares 3200 millions of euros. Caja Madrid declares 1197 millions of euros

These figures come from flats, developments and land assigned to banks as a consequence of foreclosure procedures.

The Spanish financial sector has 70.000 millions of euros of estate either assigned or acquired, according to data of bank of Spain dated June 2010.

Two ideas:

- Most of this estate was conceived as second residences for northern europeans. Sunny homes. Why not to negotiate our debt with these assets?

- If Banks had been respectful to requirements from balance out of Law 57/68, this disasterous exposure would have not had this enormous dimenssions. Lack of diligence: dangerous business. Or as the old spanish saying says " La avaricia rompe el saco"

Anyhow, let´s keep moving ahead!

Maria

Uvas by Sir. Mo at Flickr.com

( You all may know that we, Spaniards eat grapes when the Year is coming)

Dear friends of EyeonSpain:

I woke up today with the idea of writing and sending a Christmas letter to you all through my blog. It is not that I could be someone special with something really new or different to tell about or to comment on, but  yes,  I consider myself someone who,  deeply believing in God and in the trascendent nature of the human being, live these days with an effort to joy and hope and with an special attention to the messages that times and people around  are sending to us for the bettering of our reality.  Trying to see what is the portion of risponsablçility I am called to play.

That´s why I missed dressing my kids up as shepherds this morning ( I left it to a devoted father who will be, of course, sending pictures to me along the morning) and came to the Law Firm for every day´s battle in your favour. I know that we are driving a mission ( every company needs to have one, and most importantly: know what this is) and this is leading the energies that my little family left to me. Thanks to Luis, my husband, these are enough and good enough. Thanks again as always Luis.

I can see how citizenship is more conscious than ever about the needs for leading changes in society and because of the times we are living in, they are now paying attention to the financial world. In order to get out of the chaos that this all could seem to the eyes of most of us, we need to make the effort to understand how finances has been focused and understood during the last decades and see that benefit was missplaced in a wrong place. I trust on the good intentions of the creators of this system at the beginning, but playing with especulative  benfits out of the value of a symbol ( money) always requires a very high grade of specialization, risponsability, prudence, balance and sobriety.

The new chapter of the History of finaces needs to be decidedly, transparently and bravely played in favour of human beings. All on the planet. First task for us to do is probably an examination on what people, persons mean to us. Second exercise is for sure of optimism, trust and courage. In the philosophical level it is important to become clearly aware of he fallacies of  the now old fashioned and fallen economic and financial systems just  focused on monetary growing.

Anyhow, it is clear that we, citizens, armed with values inherited from the best of our traditions, in the most noble sense of the world, need to lead the changes that we are expecting.  Within a frame of tolerance and respect but with firm and clear convictions need to put people over benefits for the welfare of we all.

We, human beings have a donation-al or donation made nature, it is the way we are born and brought up.:just putting this idea in the center of our education, social, cultural, politic, economic and financial understandings is simply enough.

Anyhow.... need to go back to emails and clients assistance but most truthfully and heartedly wishing to you a Merry Little Christmas!

Yours,

Maria

Pic by

The Council of Ministers has just approved a predraft Act on judicial work and procedures.

The main aspects contained on this predrfat are the electronic working of Justice, specially the regulation of online technology for information and communication between citizenship and the Justice services. The governemnt have assessed a very postivie economic impact for these measures as these will speed up procedures and will eliminate lots of burdens for the citizenship.  The predraft pays attention to the regulation of inter-operatibility of judicial tools and on the guarantee and confidentiality of databases.

In a different package, the draft establishes measures for civil and contencious-administrative procedures to turn more dynamic, to reduce timeframes and limit the appeals.

It will be explained in more extension once it is approved.

Best regards,

Maria

 White Village in Spain by WhiteVale Wonder at Flickr.com

I am sure many regions will follow Barcelona´s regulations on this, which are in force since February 2010.

The Professional Association of Real Estate Experts, with over 1000 real estate mediation professionals in Spain and a network of more than 2,000 small and medium real estate agencies has begun a round of contacts with the Housing authorities of  regional governments.

The aim is to promote each region ( autonomous community) to create a mandatory public register of real estate agents, as the one which has been recently implanted in Cataluña, which is in operation since last February and guarantee, thus, good citizen service and dignify the professional figure of the real estate agent.

Cataluña  is the pioneer region for  introducing a regulation, which includes the registration of real estate agents to regulate the activity of professionals and agencies for real estate mediation, counseling and management in trading, rent or swap.

In this sense, the requirements in Catalonia for estate agents to enroll in the registry and perform the profession coincide with the conditions that the Professional Association of Real Estate Experts imposes on its members to join the APEI.  So the professionals:


1)  Should have an establishment open to public

2)  Need to prove enough training

3) Have a civil liability insurance covering damage or loss that may result during the year, for a minimum capital of 600,000 euros per year, and a guarantee of 60,000 euros to secure the paid amounts.

Zahara Road near Grazalema at Facebook by María Dolores Naranjo Carrasco
 

The Advisory Comitee on abusive clauses in the housing sector constituted on the 29th of January 2001 :

President: Director of the departmet for aliments and consum of the Madrid    Autonomous Community.

Permanent  members: (1)Representative of the Public Prosecutors´office.(2)General office of Registrars and Notaries incardinated in the Justice National department (3)Consumers and Users Council (4)National Institute for Consumers  (5)Trade control work group incardinated in the Comittee for Cooperation in Consum

Ad hoc Members: (1) Representatives of the Housing, Architecture and Planning department of the  in the Ministery of Economic development and Public works (2) Association of builders and developers

All agreed that, according to Comsumers Act, in an off plan purchase contract where financiation is implied:

"If the financing is not obtained (either by not subrogation on previous mortgage loan or not obtaining of new one) the buyer will have to pay that amount in a ………………….. period’s time from the notification of the financing denial to the buyer and, in every case, till the moment of requirement for the signing of public deed after the end of the works. The breach of this obligation will be enough for the cancellation of this contract by the seller.

Nevertheless, the buyer can cancel the contract, if the Bank does not accept his application for financing, with devolution of all the advanced amounts within the same deadline established for the previous paragraph "

So, if the buyer does not obtain the financiation that the contract implied  in a more or less explicit or express way, and decides to cancel the contract, according to this agreement, needs to be granted the cancellation and amount ( no interests) be refunded.

Specially as Judges, according to provision 3 of the Civil Code need to apply Law :

"En relación con el contexto, los antecedentes históricos y legislativos, y la realidad social del tiempo en que han de ser aplicadas, atendiendo fundamentalmente al espíritu y finalidad de aquéllas"

Which is translated as: "In relation to context, historic and legislative precedents and social reality of the time when these need to be applied, considering primarily the spirit and aim of the regulations". 

Do not see it tooooooo clear?

Good principles and orientation in our opinion but no strong and enforceable enough in lack of correspondence to the situation many families have in Spain these days. Situation that,  as we all know,  was clearly promoted, in a good extent, by the excess of irresponsable credit by Banks.

The Congress approved yesterday with the abstention of  PP, a motion urging the government to make the "necessary legislative changes" to "perfect" mortgage regulation and "limit" the "social effects" resulting from foreclosures.

Dation as payment

The motion does not provide specifically for the  "dation as payment" ( delivering of the house in payment of debt) as an enforcebale solution. Even though this possibility of payment by cession of assets is provided by provision 1175 of our Civil Code, limits are to the value of the house and the Bank can or cannot accept the full closure of the mortgage debt. It really depends on the economic moment for the Bank to be more or less open to this. No rights to over financed Consumers here: the typical story.

During the last couple of years we have witnessed different moments in terms of Banks´eagerness to take houses in payment of debts. Negotiation possibilities mainly depends on specific characteristics of the house, the debt, the debtor, possible purchasers... so a good try by a good lawyer is always advisable.

Socialists have expressly committ on the "study" of clauses to be included in mortgage deeds to secure that the obligation is made effective only on the mortgaged property, not reaching the other assets of the debtor. Nothing new as this is already established as a possibility by the Mortgage Act in Spain since 1946. I assume that the government is thinking of adding obligatoriety to this for armonization with other legal orders in Europe.

If this limit is possible for the negotiation of the mortgage, by virtue of autonomy of the will of contract parties, why not to apply it when the mortgage cannot be repaid by any mean? Again.... taking into consideration that many of these mortgage credits were purchased by consumers foolishly driven by the lending voracity of Banks.

Bankrupted families

Participants also discussed on new legislative measures for bankrupted families : transparency of mortgage contracting and of insurances to cover  mortgage defaults when unemployment or disability.... Good principles again, all of them mostly covered already by our legal order: too soft statements in our opinion.

Another topic for study and consideration is on the increasing of  fixed amounts as unattachable wages, salary, pension...taking into account things like the number of children in the household.

The last point of the motion, refers to encourage mediation between banks and families on missing payments.... nice idea... need to acknowledge it captured my attention this morning. Main wonder of myself: who will be the mediator?

Vejer de la Frontera by Lylycat at Flikcr.com

Consumer Law is now more imperative than ever before on developers and Banks which dealt with off plan businesses in Spain during the building boom.

At present moment, the most of the stock is in Bank´s hands but these, being considered as assets, are actually heavy charges for their balances mainly due to the required provisions to Bank of Spain.

Beause of this and becasuse they see Law 57/68 liabilities being charged now against them, they are doing great, balanced offers:

50% discount properties with a 90% to 100% mortgage available.

Nothing else that fairness: a balanced, reasonable route to give life back to a death market.

Beautiful Grazalema

Another good new today, a Court decission by Murcia Appeal Court by which it is established ( this has Case Law value), in accordance with other jurisdictions in Spain, that penalty clauses when consumers do not complete on off plan purchase contracts can be just of legal interests level ( 4-5% of amounts paid)

This.... against what many contracts in the Murcia area established : loss of the total amounts paid by consumer to developer.

Again in application of Consumer Law and good faith and balance contract principles.

Again... another proof of a healthy legal system :)

Cheers!

Maria

Alpujarra Cat by Thiery49 at Flickr.com

Based on nice  principles of prohibition of "aliud pro alio" and this being a reason for contract cancellation, "nulity of contract consent due to error on the contract object" or " required clarity" of contracts, I  have had today, the great and inmense pleasure of receiving by our legal researchers a number of Court Decissions by which some of our clients who bought touristic apartments reinforce their rights for  contract cancellations of said agreements.

Main reasons exposed by said Courts ( Mallorca, Seville and Madrid) during years 2009 and 2010 are among other ones:

1. If the private contract which was used for the sale of the unit did not expressly contain clear  references to the touristic character of the apartments, clauses on expenses linked to this modality, agreements of ways of exploitation of the said apartments..;the agreement can be deemed as null and void as buyers were buying something different to what they throught were buying ( consent error)

2. Lack of precision or undetermination regarding the legal features of the contract object in the contract cannot favour the author of the the contract. So they favour the ignorant buyer.

3. A buyer cannot be compelled to buy something which legal nature is controverted or it is being challenged in Courts.

4. Both final registration of the property classification on the Tourism Regional Registry and opening license are equivalent to First Occupation Licenses in these cases.

These are the great news today. Who says our legal system is useless? I am determined to make you understand it is not.

 Mojacar by  Shehani at Flickr.com

 I am wondering:

Why Banks do not react and set an strategy to make all these hundreds of buyers happier with an alternative?

Banks who actually are now Super-Estate agents should maybe start thinking of claimers out of Law 57/68 in a completely different way. This would involve a new paradigm in the way they have been doing business so far but will bring to them happy faces, happy human faces happy person faces which is what they need and what they forgot about during the last decades.

For instance: why not to turn a Bank Guarantee claimer into a prospetive good buyer of one of their properties ( after they reduce prices realistically), with a financiation plan ahead? A financiation plan tailored to the real needs and possibilities of the buyer at present moment?

Why not to turn a claimer based on point 1.2 of Law 57/68 ( liability of Bank for lack of Bank Guarantee) into one of these above too?

Person oriented Banks are the ultimate and only sustainable Banks:  it is not an uthopy. This is the call of the times for Financial system these days.

Maybe, we, citizenship need to do the big claim for this. no problem about this but..... we need Banks who listen to us.

Have a great weekend, Monday and Wednesday are feast days in Spain.

Cheers,

Maria

Door and pot of flowers in Alpujarras by Thiery49 at Flickr.com

1.- Do not just run and leave the keys back at the Bank´s office as if you did not have a problem anymore

2.- Talk to the Bank to see if the change to another mortgage scheme is possible ( only-interest, reduction of fee amount, grace period...) Advisable to send a fax or email, to have written proof of your payment will.

2.- Make a formal offer for the house to be taken as payment of the debt. Ask for a third party fully independent valuator. Do it by certified fax and most advisably with the help of a lawyer.

3.- Deffend your position firmly with correct and persistent legal grounds and defence

4.- If a repossession order is notified to you, answer it ( you will avoid the application of EEO this way) with a show of all the attempts for reaching an agreement. Ask for a payment agreement to be reached in Courts as a counterclaim.

( most importantly: hire a lawyer to deffend you with this)

White Village in Alpujarras by Tigernuts at Flickr.com

Cession of the contract and Sublet

Cession of the contract: it is called cession when the change  is made by the landlord, it is the transmission of his rental rights and duties to a third party.

Sublet is made by the tenant; it is the renting of part of the rented house. The subletting needs to be on part of the house and for same or less time and rent fee than those of the main rental contract

In both cases (cession or subletting), the landlord must agree in writing.

 La Taha, Andalucia, Spain by Poul Iversen at Flickr.com