El blog de Maria

I was reflecting yesterday on the level of fullness and  satisfaction we had as Spaniards from 1978 to the early 90s . With the ups and downs inherent to any society, the social and economic welfare had during those years a natural, sustainable, predictable  pace ... Results could be planned, foreseen and confirmed. Effort made ​​sense, an acceptable level of reward always arrived.

These days, as we are all immersed in this global society that has invaded our lifes and economic and social models, we have no choice but to live for today and hope that the result will come sometime from a kind of unknown way. Prediction is much more difficult. Trust need to be more used.

Our King was very right on Christmas Eve when he encouraged intellectuals to be guides for society so we can better understand and conduct ourselves in this emerging, unknown world. They need to show us the way to bring  so much change to the service of the common good, of people. Starting with those who are socially weakest and most vulnerable. Counting on them. It is the only way we can conduct our kids to a better world.

Spaniards have historically live with a beautiful and ellegant simplicity, without frills or excesses. We have never needed them. We have always been world-wide masters of  experiencing  the joy of sharing, of community development , of family values ... Let´s keep bringing this to others. Let´s be proud of this. Let us not be infected by ultra-liberal and individualistic social and economic models . Spain has always been able to understand wealth as something broader than mere economic welfare.

Molino restaurado, by Fernando Cuenca, at flickr.com

I am fan of listening the King every Christmas night. I always get inspired and  it reinforces my ideals on fighting for a better Spain for everyone.

I remark the words by which the King reminded us that we all are in charge of improving democracy in our country. Not just political institutions, but also all and every one of the different  social, economic and professional forces.

Spain is worth it, I agree with both the KIng and the Prince.

"Adoración de los pastores", by Bartolomé Esteban Murillo (a famous spanish painter), around 1657, online gallery and the Prado Museum (Madrid, Spain)

I fully endorse these measures compiled by the "Center for Global Economy and Geopolitics ESADE ( ESADEgeo) ”, as key lines to be implemented for the progress of economy:

GENERAL MEASURES

1. Making Spain a technological pole : placing the corporation tax rate in 10% for technology companies which are born or come to our country .

2. Creation of Chief Innovation Officer with the rank of secretary of State and direct communication with Prime Minister.

3. Seeking actively the improvements that allow to improve  in the international comparitive studies ( mainly, World Bank´s Report Doing Business )

4. Boosting  the Spain brand  as an image of creation, innovation and entrepreneurship.

5. Considering Internet as the lever for the growth  of the economy and to stop attacks.

6. Fixing the minimum of the contribution of  freelancers for the Social Security in 20 euros.

7. Monthly return of VAT to start up .

8. Facilitating the creation of stock option plans with a more favorable taxation for  the worker, capable of attracting talent.

9. Allowing  to intend  in the Tax return a percentage for  entrepreneurship.

10. Favouring taxation of the financing of  business angels.

LABOUR MEASURES

11. Establishing  a limit in the compensation for  firing .

12. Considering  the previous hiring of unemployeds when firing costs are judged.

13 . Facilitating the process of hiring  foreign talent .

 OTHER MEASURES

14 . Greater agility in the authorithation of licenses in order to open premises .

15 . Avoiding duplication of efforts among the autonomous communities.

16 . Boosting a real limited liability of the companies .

17. Eliminating the seniority requirements to the suppliers of public administrations .

18. Fixing  as a practice of good corporate governance purchases to new companies (the beginning may be 2% ).

19. Allowing partners of a company to be autonomous with 1% of the capital of the entity , rather than the current 25% .

 MEDIUM TERM MEASURES

20 . Promoting the continuity of the management of the new companies before their sale , to eradicate the culture of “getting rich quick”.

21 . Promoting the arrival of venture capital to our country and also within it.

22 . Strengthening  the legal security regarding non-payments. Spain occupies the 54^th  position regarding the ease of enforcing contracts .

23 . Facilitating the Initial Public Offering of technology start up .

24 . Approaching University to the labor market .

25 . To be an entrepreneur, also within the company , is the basis of innovation. It is a good test site for innovation

26 . Deregulating : for each new rule, to eliminate two ones .

27. Linking public and private funds that get nearer the management of the capital  to the entrepreneurs.

 OPPORTUNITIES

28 . Entrepreneurship is the only way out for crisis and unemployment.

29. Spain has three of the best business schools in the world , representing the arrival of much foreign talent to the country.

30. Need of change of the economic growth model . The one based on real estate is finished.

31 . Opportunity: price of land, empty offices .

32. Spain has a great bond with Latin America that expands the market possibilities.

33. Taking advantage of the size of our country to attract entrepreneurs from other European countries with smaller markets .

34. There is a great opportunity for foreign entrepreneurs because of the Spanish gap  in innovation.

 SOCIETY

35 . Improving the perception of the entrepreneur in society.

36 . Promoting the culture of effort .

37 . The spreading of entrepreneurship in media .

38 . Education in innovation since Primary education.

39. Risk aversion in our country is an impediment for entrepreneurship.

40 . Fear of failure paralyzes entrepreneurship.

Adornos de Navidad en la Carrera del Genil, Granada, South eastern Spain, by JM Yuste, at flickr.com

Did you see it?

It is a global world, Spain is a global Spain. You count.

http://www.costaluzlawyers.es/ru/

Arbol Navidad en Plaza España, by Leo Martín, at flickr.com

Source: EL DERECHO, with data from GONZÁLEZ-POSADA MARTÍNEZ, E. El Teletrabajo, Junta de Castilla y León, Valladolid, 2006, p. 30.

Translated by CostaLuz Lawyers 

In my opinion, many of the negatives can be easily improved  and they are seen as negatives now just becuase several Human resources, Management tools have not been developed yet, but they will soon. In some occassions are just part of the naturally human fear about new things. 

People-oriented managers wil be able to develop the necessary tools to cover those lacks related to personal and professional enrichment of workers, work safety, sense of belonging...

Self proactive, well committed workers will be first to be selected.

Maria

Park - Parque del Campo Grande, Valladolid, North western Spain, by Marc, at flickr.com

Telecommuting/ teleworking or remote working, a very " of these times" modality of work. Possibly a new way of understanding work too.

It increases employment possibilities and specially for disabled people.

Good for family-work balance.

In terms of rights, remote workers of course have same rights as presential ones. Employer needs to ensure effective access to vocational training of these. Remuneration needs to be in accordance with professional group and functions and have full rights to collective representation and protection of health and safety.

Of course, they are all included in the Social Security System.

Regulated by Law 3/2012

Arcos de la Frontera, Cadiz, South of Spain, courtesy by Sebastián Aguilar, at fecebook.com

New case won by CostaLuz/De Castro teams.

Great Judges at Granada Appeal Court seeing very clear how a passive behavious by a Bank receieving off plan deposits is under " liable behaviour" established by provision 1 segundo of Law 57/68.

Developer was Prpomociones Inmobiliarias Leonardo Da Vinci and Bank was BBVA

Awesome how  Appeal Courts  are applying Justice in Spain for off plan disasters!

Vista Parcial de Granada, South eastern Spain, by Phranet, at flickr.com

No other word can describe these entities as monsters.

According to Cinco Días,a  penalty of EUR 1,710 million for manipulating references interest rates has been impossed to Banks by Brussels.

Last  week also European regulators accused the major rating agencies ( S & P , Moody's and Fitch ) about suspected conflicts of interest , lack of rigor and interested leak of  their sovereign debt ratings .

 European Commissioner for Competition , Joaquín Almunia, after announcing the penalty for cartel of five banks ( Deutsche Bank Société Générale , Royal Bank of Scotland , JP Morgan and Citigroup) and a broker (JP Martina ) .  described as " embarrassing " emails that these entities were exchanged for several years to agree Euribor and Tibor , the benchmark interest rate in the interbank market to numerous financial products. "In this case , affected thousands and thousands of customers and millions and millions of people whose mortgage is linked to those references ," said the commissioner.

Killers, I would say.

 The investigation of the EC has concluded that the way Euribor operated between September 2005 and May 2008 , until just four months before the collapse of U.S. bank Lehman Brothers produced a global financial crisis in the euro zone has not yet has recovered . The Tibor cartel lasted from 2007 to 2010. In both cases, according to the Commission , the aim was to distort the formation of the references used for the trading of financial derivatives , an essential tool in banking markets . These references calculated on estimates of the banks themselves , intended to reflect the cost of interbank lending .

Almost all surveyed institutions have accepted an agreement with the European Commission to close the case, which has not freed them from fines of up to 465.8 million euros in the case of Deutsche bank , 445.8 million in the Société General and 131 million in the Royal Bank of Scotland (RBS ), all by manipulating the Euribor .

Furthermore, from the handling of Tibor , RBS will pay 260 million euros , DB , 259.4 million ; JP Morgan, 79.8 million ; Citigroup, 70 million , and RP Martin , 247.000 euros.

With the sanctions , however , financial institutions perch to the list of the 10 largest antitrust fines , which until now were not included . The DB becomes the fourth company to a higher fine , behind other more "traditional " as Saint Gobain , Philips and LG Electronics . And if today the two fines are added, the DB is listed second . The hardness of the EC against the dealer suggests that Brussels takes revenge against the sector.

A sector whose crisis has forced the Commission to authorize within hours hundreds of millions of euros in state aid that would not have accepted or been subject to prior research for years in any other industry.

Brussels wants to punish and restore normalcy  now that most critical moment of the crisis  has passed,  against past excesses .

The shift began last summer when Almunia department issued guidelines on state aid  which made aids to be conditioned to Banks imposing losses on shareholders and creditors, a condition that has hardly been fulfilled during the crisis, except in the case of Spain.

Strong against Floor Clauses..... why are you waiting?

Tarifa, Cadiz, Costa de la Luz, Southwestern Spain, at facebook.com

Both about heart

.

Frozen: A deep, special movie about heart, relationships,  and the strength of  a sisterly relationship 

Our companies and our businesses cannot be far from these lessons: people at the center: Consumers Law!

A Christmas Tree in Jerez de la Frontera, Cádiz, South of Spain, at facebook.com

I spent 5 years of my youth in Seville studying Law, by the way!

Used to enjoy a lot these festivities. With the seises and the Tunos singing and bringing flowers Mary Inmaculate

Sevilla - Catedral, Seville, South of Spain, by Alessandro Rizzo, at flickr.com

A very good explanation of Law 57/68 by Keith Rule.

LEY 57/1968 - AN EXPLANATION

LEY 57/1968 is a short but very important Law which was implemented in the Public Interest on
27 July 1968 specifically to safeguard purchasers deposits paid in good faith to developers
for off-plan properties.

The preamble of the Law explains clearly the reasons for its implementation.

The preamble states that there was justified public alarm at the fact that repeated abuses had been taking place
with regards to off-plan deposits.  It says the abuses which were obvious criminal acts had a serious
disruption of social life, constituted a serious alteration of the social coexistence and caused irreparable
damage to trust and good faith.  It says LEY 57/68 was being introduced in the Public Interest to create
general preventative standards to ensure the real and effective protection of funds paid in advance by
purchasers and to ensure they received a refund in the event that the house building did not take effect.

It appears that 40 years after LEY 57/68 was implemented we are experiencing the same 'repeated abuses'
and 'obvious criminal acts'  We now have the exact same situation of a 'serious disruption of social life' which
unfortunately for many innocent purchasers has again caused 'irreparable damage to trust and good faith'.
This is a serious public order matter that the Spanish Authorities must tackle immediately.

As you can see below the LEY 57/68 is very clear and provides absolute protection for the purchaser.
It is not LEY 57/68 that has failed.  The failure is that of the authorities whose duty it was to
uphold the rule of Law. 

LEY 57/1968 Article 1 states that any developer or promotor of homes that are designed
as a permanent or seasonal residence and who accepts purchasers deposit funds before
starting or during construction must meet the following conditions:

Article 1.1
Must issue at no cost to the Purchaser a Bank Guarantee or a Certificate of Insurance for ALL deposit payments
plus legal interest.  The Bank Guarantee or Certificate of Insurance may be executed by the
purchaser if the construction does not commence or complete for any reason by the agreed deadline.
The buyer is then entitled to a full refund of their deposit together with the addition of legal interest.
The rate of legal interest mentioned in LEY 57/68 is 6% per annum.  However, The Building Act LEY 38/99
amends this percentage to the legal rate as published annually in the Boletín Oficial del Estado.
The interest is calculated on a simple annual basis and is not compounded.  If the developer mentions in the
purchase contract that the interest payable is 6% per annum as stated originally in LEY 57/68 then this
will overrule the legal interest rate, providing the legal interest rate is lower than 6%.
The interest is calculated from the date of the deposit payment until such time as the refund is made.

Article 1.2
Must receive the funds paid in advance by purchasers through a Bank or Savings Bank and deposit in a
Special Account held at a Bank or Savings Bank.
The Special Account must be separate from any other account held by the developer or promotor and the
Special Account must only contain funds deposited for the construction of dwellings.
It is the responsibility of the Bank or Savings Bank to ensure that the Special Account is
opened and the Bank or Savings Bank must either issue the Bank Guarantee referred to in
Article 1.1 themselves, demand that the Bank Guarantee is issued or verify the existence of a
Bank Guarantee or Certificate of Insurance to fully cover the off-plan deposit funds in their custody.

Article 2
The Contract or Sales Agreement for which the developer or promotor receives
advance payments must state:
a) That the promotor or developer must refund the full deposit with the addition of legal interest
if the construction does not commence or if the construction is not completed by the date
stated in the contract.  The full deposit with the addition of legal interest must also be refunded
to the purchaser if the Certificate of Habitability (Licence of First Occupation) is not granted by
the Local Town Hall.

b) The contract must make reference to the Bank Guarantee or Certificate of Insurance and
it must name the Bank and/or Guarantor.

c) The contract must give the name of the Bank or Savings Bank who will hold the deposit
funds and it must give details of the Special Account where the funds will be held.

Immediately after receiving the deposit funds and at time the contract is issued the developer or
promotor MUST provide the purchaser with the Bank Guarantee or Certificate of Insurance
which must cover ALL amounts paid towards the price of the property.

Article 3
If the construction and delivery of the property has not been completed by the date set in the
contract then the buyer may chose between cancelling the contract and having the full
deposit refunded together with the addition of legal interest or have an annex to the contract
drawn up giving the developer or promotor extended time to complete the property.

Article 4
The Bank Guarantee or Certificate of Insurance must not have an expiry date.  It only expires when the
Certificate of Habitability (Licence of First Occupation) is issued by the Local Town Hall.

Article 5
Any sales and promotional material issued by the developer or promotor, which makes reference to
the payment of funds in advance for a property, must name the
entity who will issue the Bank Guarantee or Certificate of Insurance and must give details
of the Bank or Savings Bank Special Account in which the deposit funds will be held.

Article 6
This article gives details of the punishments and fines that will be imposed on the developer
or promotor if they fail to comply with the provisions of this Law.  As detailed in the Building Act
LEY 38/99 the fines imposed for each violation can be up to 25% of the deposit amount which
should have been protected.

Article 7
This article states that the rights this Law gives to the purchaser have a 'Caracter de Irrenunciables',
which translates to 'Inalienable Character'.
In this context inalienable means: Unchallengeable, Absolute, Immutable,
Not Able to be Forfeited, Unassailable, Incontrovertible, Indisputable, Undeniable.
This article also states that the purchasers rights granted by this Law are so strong that they cannot be
waived even at the request of the Purchaser.

The Building Act 1999 - LEY 38/1999, de 5 de noviembre, de Ordenación de la Edificación
As mentioned in the above paragraph titled Article 1.1, the Building Act 1999 - LEY 38/1999 in the First
Additional Provision amended the rate of interest payable on a Bank Guarantee refund to the legal interest rate instead of a fixed 6%.

As mentioned in the above paragraph titled Article 6, LEY 38/1999 also confirmed that fines imposed on
developers for breaching the requirements of LEY 57/1968 can be up to 25% of the deposit amount
which should have been protected.

In addition LEY 38/1999 also states:

That the requirements of LEY 57/1968 will apply to the promotion of all types of homes, including those
purchased by a community of owners or a housing co-operative.

The protection provided by LEY 57/1968 is also extended to amounts paid in cash to the developer which
must be deposited in the Special Account (Cuenta Especial).

Sunrise in the Strait, Tarifa, Cadiz, Southwestern Spain, at facebook.com

As a continuation of previous post:

Seems to me that these Supreme Court Decissions, as a matter of fact, make those 57/68 rights weaker.

Again, I can understand that there are different levels of breaches and that because of that different level of measures/ consequences need to arise but, from that to restrict lack of First Occupation License as breach of contract and cancellation producer, to just those two possibilities, seems to me too restrictive.

It might be that the Supreme Court is thinking of those  cases where whole construction is finished and end of works certificate is issued but there is not First Occupation License, then, in these cases, cancellation is possible just under those two frames. If this is the case, I guess a further explanation is necessary.

I keep wondering for those cases where developer has disappeared or is non solvent to finish the development. There are some of these that do not even go to bankruptcy proceedings and developments end up being repossessed by Banks. Where buyers rights go then?

In cases of bankruptcy, if the agreement of creditors is signed, buyers need to wait to the end of the Bankruptcy procedure, seeing their effective, inalienable rights related to Law 57/68 also highly disregarded. This is also my opinion.

Back in 2006 when we started studying on lack of First Occupation License and completion, academic authorities of Consumers Law of CESCO ( University of Castilla-La Mancha, Centro de Estudios de Consumo) stated:

1.- The seller who signs the public deeds of purchase without FOL ( First Occupation License) is in breach of contract even if the house has been physically handed over, because the ownership rights that he is trasmitting are not valid for the use of the house till the FOL is granted.

 2.- The buyer can be opossed to the signing of the deeds till the FOL is granted if the completion date was fixed for anytime after the end of the work, and the seller cannot cancel the contract due to this negative of the buyer until he fulfills his contractual obligations ( by obtaining the FOL).

 3.- The buyer can cancel the contract ( even after the signing of the deeds), with full devolution of amounts, interests and compensation of damages if after the completion date, either  the deeds having been signed or not, the building does not have the FOL.

4.- If the buyer decides not to cancel the contract, he must not occupy the house, even when having being formally handed over, because that would involve an administative infringement and because he can be deprived of its use by the competent Administration.

There is much to work on in relation to Law 57/68.... it is not dificult. Just a bit of political will is necessary.

Vejer , Cadiz, Southwestern Spain, Costa de la Luz, by Jose Manuel González, at facebook.com

Very recent Court Decission by the Supreme Court in regards of this conflictive development in Marbella. Los Lagos de Santa María. Third time the Supreme Court discusses on this in October 2013.

Supreme Court, following a doctrine they started last year ( 10th of September 2012), again, states that lack of First Occupation License is a cause for contract cancellation just in two cases:

1) If the lack of first Occupation license was expressly agreed as essential ( major breach) in the contract

or, in deffect of the above

2) In those cases where related circunstances tell that granting of First Occupation License will not come soon due to possible planning illegalities.

Developer will always be able to prove that the Lack of License is accesory ( minor) and not an essential ( major) breach if the lack of obtention of this is not related to " unpossibility to give to the unit the use it was built for" 

A reform/clarification of Law 57/68 seems necessary to me as all this doctrine seems to somehow contradict Law 57/68 and, specially provision 3 which clearly says:

"Article Three - Upon expiration of the period allowed if the construction and delivery of the 
dwelling has not taken place, the buyer may choose between the cancellatino of the contract  with repayment of the amounts paid in advance, plus the six percent annual interest, or give the developer extended time and this period must be stated in an annex to the contract awarded,  specifying the new period with the date of completion of construction and delivery of housing". 

I can understand that law 57/68 is possibly too general and that there should probably be a classification of breaches with corresponding consequences ( compensation/cancellation), but, being Law as it is at present, I find difficult to assume that the Lack of First Occupation License will just grant cancellation rights to buyers if this has been expressly agreed in the contract or a Urban/Planning illegality is involved.

What about those cases where developer run out of funds or run away with them and development is not finished for years, where no Urban/Planning breach is involved?

Arcos de la Frontera, Cádiz, South of Spain, by Guillermo J., at facebook.com

Notaries and Registrars have historically been guarantoors of the private side of legalities related to property ownership: Owner, title, loans and encumbrances, means of payments, correct registration of ownership to give public faith of these private transactions before third parties.

Even in  Land Act of 2007 it was not clear that  Notary and Registrar must require First Occupation License to authorize / register deeds of end of works.

Notaries wrote an online guide by that time where they wondered about this requisite of the article on End of Works deeds:

b ) the documentary evidence of compliance with all requirements imposed by the legislation regulating the building to deliver it to their users

What document does this refer to? They guessed then:

Ten-years obligatory building insurance? Habitation License? Book of the building?
          
It was in 2011 , when Land Act started too mention specific obligations of Notaries and Registrars in regards to checking on Urban legalities. Then in 2013,  these obligations were made much more precise and clear:   

Notaries :

New building deed:
- WORK LICENSE + TECHNICAL CERTIFICATION OF PROJECT BEING SET TO LICENSE

End of Works deed: 
- TECHNICAL CERTIFICATE OF END OF WORKS + TEN YEARS INSURANCE + BOOK OF THE BUILDING + ENERGY EFFICIENCY CERTIFICATE + FIRST OCCUPATION LICENSE
 

Registrars:

They need to verify all requirements above before registering the end of works deed.

When registering finished works they need to verify very strictly on existence of any urban irregularity.

So, in short words, it is not till June 2013 that the Land Registry offers a high level of safety in regards of the planning/zonning status of houses. For all houses built and registered before then, a good independent lawyers is necessary for verifying those aspects.

Demolitions? Possibly not as many as the press mentions and always a claim being possible against Local Councils is they issued licenses against Regional Urban Rules.

Sierra of Grazalema, Cádiz, South of Spain, at facebook.com