MAY 2015 EOS PODCAST
QUESTION NUMBER ONE
Name: John J.
Comment: My wife and I purchased an apartment on the costa in 2002 with a bank mortgage. Since then and due to the property collapse we had to stop payments to the bank and give up the property.
When we informed the bank we asked if our interest only payment would be acceptable for a time. (We were on interest only payments at the time.) This was refused so we left the property in 2006.
Since then the property has been empty and we assumed that the bank would reposes it. To date they have not done that, they have never written to us on the subject and since 2006 we have been charged the community fees now with a debt in excess of 10,000 Euro.
What is the legal stance on the situation it seems obvious that they do not wish to repossess as they will be responsible for the community fees?
We were told by the community administrator that they have checked the Nota Simple and that we are still the official owners hence why they are charging us for the fees. Does the bank have a legal requirement to re-poses? What can happen? We don’t believe that the mortgage is secured on anything but we are not sure. Thanks for your interest and any further feedback. We are very worried.
Your situation, being non normal is very common at present; sometimes Banks do repossess properties but do not register it at the Land Registry in order to avoid costs of registration, and other attached costs such as community of owners, taxes…
I would certainly start by checking the nota simple by yourself as, administrators have opposite interests to yours here. If nothing is clear out of the Nota simple, a straight dealing with the Bank with the aid of a Consumer Law specialist is essential. Both mortgage deeds and repossession procedure—if found out as being happened—can be scrutinized by the Lawyer in order for you to be in the most protected position in this scenario you are describing
QUESTION NUMBER TWO
Name: D.Stubbs
Comment: If the community budget passed in the AGM is lower than the previous year does it mean that the community owners’ fees are automatically reduced or does a vote have to be taken on this being done? This was done after the AGM automatically due to the lower budget.
The lowering of the fee was not discussed or voted on and my question was. Is this the legal way for it to be done?
No, it is not legal. This lowering of the fee needs to be:
(1) explicitly announced as a discussion topic to all owners in the agenda when calling them for a meeting and
(2) Obtain majority to votes (representing majority of shares) in a legally convoked and with the required quorum meeting.
As a President you should include this matter on next General meeting. In the meantime lower feeing should not been practiced.
QUESTION NUMBER THREE
Name: Tracy
Comment: My husband and I bought a property in Tenerife 10 years ago. The property is in both our names. I am going to buy him out of his half of the property. What is the cheapest way to get his name taken off the property and how do I proceed to make this happen? There is very little mortgage on this property? I have a letter from his lawyer stating he is giving up all of his rights to the property.
The cheapest way will certainly be if you were divorcing and this was part of the division of assets coming with the divorce. In these cases, no Transfer tax needs to be paid and you just need to pay Stamp Duty.
If that is not the case, and the title we are using for the transference is a donation, you will have to pay donation taxes (similar in value and structure to inheritance taxes) Inheritance and donation taxes have regional reductions on taxable amount due to family relationship between parties, habitual residency of the donated/ inherited asset or handicapped condition of heir.
Transfers among family members are scrutinized before being registered for if these are hiding a donation.
QUESTION NUMBER FOUR
Name: Joanne
Comment: My husband and I own a holiday home in Spain with my parents (4 owners). We live in the UK. What happens to our part of the property/ownership and what tax would be payable if one of my parents passes away. They have a UK will stating the Spanish property is left to me.
If one of your parents passes away, your part will remain intact of course. After due probate work in the UK, acceptance of inheritance in Spain and payment of corresponding Inheritance taxes on the inherited portion will be required. Then, that fourth of ownership on the house, will be registered to your name in the Spanish Land Registry.
QUESTION NUMBER FIVE
Name: Toni G
Comment: can we rely on a notario to purchase a property in Spain, or do we also need a lawyer?
Each of these two legal professionals has a different role to play in regards to the sale. Of course a Lawyer is the professional who is appointed to care for your individual interests on the purchase. Notaries have a duty for caring about mortgage deeds not containing abusive clauses and on the legality of title so it can have access to the Land Registry. This involves the revision of many legal aspects of the deal. Anyhow, an independent lawyer working on your side will be taking specific care (previous, at and after purchase) such as:
(1) Create a balanced deposit contract/ private contract-- which can condition rest of the purchase. Revision of cancellation and penalty clauses of this initial contract
(2) Revision of system by which deposit amounts will be easily returnable to you if buyer failed
(3) NIE obtention
(4) Non resident Bank account opening if applicable
(5) Hiring of structural/ snagging survey and legal demands to buyer after this if necessary.
(6) Effective application of cancellation clauses of deposit contract is the survey report failed
(7) Revision of mortgage conditions ( if a mortgage is granted for that purchase)
(8) Revision of Notary draft beforehand. Revision of Notary and Land Registry fees to be adequate.
(9) Management and solving of issues related to pending charges/ encumbrances/ non paid taxes/ non paid community of owners fees
(10) Currencies certificate with the Bank
(11) Correct filling in of tax forms and payment of involved taxes
(12) Possible defense before claims by Tax authorities
(13) Change of IBI, Community of owners, light, water… contracts
QUESTION NUMBER SIX
Name: Alan B
Comment: My wife’s brother died and he had a house & mortgage in Spain which has been left to her. House & debt are the same value. Does she have to accept the house?
We need to know what Law is regulating the accepting/rejecting of the inheritance and submit to their rules. The fact that the property is in Spain or the deceased left Spanish will does not make Spanish Inheritance law to be applicable for this legal management.
If Spanish law is applicable either by forwarding by UK law (cases where deceased had Spanish residency and had no assets in the UK) or because the deceased preventively chose it before dying in a will, she can:
Accept the inheritance as benefit of inventory. Heir is liable of debts of the deceased just to the value of assets. This can be done at the Consulate if the heir is abroad.
Refuse the inheritance. Inheritance is formally and expressly refused by heir. It must be made by Public Deed or before a judge.
Effects of both acceptance and refusal are retroacted to the moment of the death. Creditors of deceased can ask the Judge to accept the Inheritance if being refused, it has caused a damage to them.
QUESTION NUMBER SEVEN
Name: Anne N
Comment: We won a Judgement against Viviendas Jardin (Algol) for refund of monies for property in Costa Teguise in Lanzarote. Since then, they are claiming insolvency. Court case in Gran Canaria - we are on list of Creditors. How can we find out what is happening? Will we ever get money back? Paid Euro 28000 - entitled to about 16000 as refund. Thank you
Was that an off plan investment? If that is the case, the most effective way ahead, specially as the company is under creditor´s meeting, is to start a new claim against liable banks according to law 57/68. Creditors meeting results will leave you possibly with nothing and related banks can be condemned to refund same amount plus legal interests if the facts for a successful claim are present.
These actions are those who were promoted and almost created by Keith Rule, a former victim of a situation like yours, who is now a member of our legal team.
QUESTION NUMBER EIGHT
Name: John B
Comment: I live on a small community of 11 houses. The area of each plot is small around 200 sq.metres.
The build is around 120 sq.metres. The house next to me has 5 dogs and very little garden. They live inside the house but when the tenant goes out they are left outside and continually bark if anyone walks up the road. The tenants do not get home sometime until 2.00 am. and the dogs wake us up. Everybody complains about them and a letter has been sent by the administrator to the owners but they live in the UK and have ignored his letter.
Please advise us what course of action we need to take to reduce the number of dogs or to prevent the noise. We can not walk down the path between the 2 houses without a terrible noise form the pack of dogs
Case Law has repeatedly established that if animals cause alterations to the peaceful living together of the community, a ceasing action can be acted against their owners. This action starts with an out of court request by the President of the Community and can be followed up by a judicial action if the owner does not comply with this request.
QUESTION NUMBER NINE
Name: Sandra
Comment: I understand in August a new Law is coming in which says if a husband or wife die 50% of the property will automatically go to the children. We are from UK but Spanish residents. Can we do anything about this?
From August 2015 residency Inheritance Law will apply to you. UK did not sign the Brussels IV agreement you are referring to, but as Spain has and you are a Spanish resident, if you do not want Spain inheritance law to be applied to you, you should better grant a will now by which you choose UK Inheritance Law as the one governing your succession.
The only problem is if you have no estate assets in the UK as by applying International Private Law, UK law will make Spain Law as the law which needs to govern your inheritance.
I do not know how Courts will solve these matters as it might be that they can understand then that as Spain law is governing your inheritance and this international agreement is legally higher in hierarchy than national law, your will choosing UK will apply with no possibility of further forwarding.
Law is not mathematics as you can see.
QUESTION NUMBER TEN
Name: Stephen
Comment: We had lived in Spain for almost 10 years and unfortunately had to close the business we had there last year and returned to the U.K., terminating our residency in Spain
After experiencing difficulties in being able to maintain our monthly mortgage payments 18 months ago and while still living there, we had accepted an offer from the bank to reduce our re-payments by half, over a two year period. We have maintained all monthly payments since without any problems.
The problem is, when the agreed term finishes next October, it is highly likely that we will still not be able to pay the full mortgage amount when it reverts back to its previous level, as circumstances have not improved sufficiently after our return. Could we expect that the bank would be willing to extend the current agreement for an indefinite period and without having the additional expense of paying for the service of a lawyer for drawing up a new agreement?
Any advice would be gratefully appreciated.
I would certainly try to talk with the Bank about this, despite aid for mortgagors in Spain have been passed for Spain residents, a good negotiation by an expert lawyer can result in an optimal situation for you.
We offer a settlement for the Bank to repossess mortgage houses at the price that law sets to them as minimum, which generally is on the region of the debt our clients are selling the house back for. Sometimes just a small amount is required to be paid by the debtor. This process is an adverse effect Banks are having due to the valuation inflation they perform in their “good years”. Law in Spain sets a limit for them to value the house when repossessing them and this works clear in favor of the mortgage debtor now. Banks do not always win!