Dacion el pago - handing back the keys

Hi,

I wondered if anyone can give me some tactical advice!

We have had an apartment in the Playa Golf development near La Zenia/Cabo Roig for a few years. We don't use it as much as we thought we would, and haven't had much joy renting it out, so were thinking of selling (probably a bit tough at the moment!) or walking away. We paid €135k for it, got a 100% mortgage from Banco Halifax which is tied to the Euribor, so is pretty cheap at the moment, and have paid off €35k, so there's €100k outstanding.

I have read a bit in this forum and elsewhere about a lender's supposed obligation to accept the keys back (dacion el pago), but what I haven't managed to understand is who actually values the property. If we did hand back the keys, presumably we would be running the risk of the bank saying that it's only worth €70k now, even though it was valued at €135k when we took out the loan, and then chasing us for the remaining €30k.

I have had a phone conversation with the bank about our options, without trying to sound too desperate (which we're not at the moment, but if interest rates went up again it would be harder), or telling them who I am, and they said that they could get a commercial firm to value it, but that they are not interested in taking back any property and that they would not be obliged to accept another organisation's valuation anyway.

What should we do, in what order, to even find out whether this is worth considering? I would be grateful for any thoughts.

Thanks, Michael 

Hi Michael and welcome to the forum.  I am an estate agent and live on Playa Golf.  I have a few apartments here from 87,000€ and  you really don't have much chance of selling above that.  To sell here in Spain you need to be able to pay off the mortgage on the day - or the debt passes to the buyer - so selling isn't an option at all unless you can pay the difference between the price you get (minus fees) and the mortgage amount.

Sorry but I think you should explore the dacion option or try to hang on until the market recovers a bit.

 You can use an independent valuator and the Bank is obligued to accept your house as payment of your debt.

Hi there

We are keen to sell/ get rid of one of two properties we have in Spain. We are not expecting anything other than to hand the keys back but would really appreciate it if someone could tell us the legal position here, i.e. if we have the property valued is the bank obliged to accept that as its debt or do we need to pay the difference between that abd the value of the mortgage?

thanks in advance

Dave

You need to cover the whole difference. So if you have a remaining amount tpo be paid you can agree on the repsyment terms with the Bank.

Did you use an independent surveyor or the Bank´s surveyor? 

Help

We have for the past 3 months been going through the Dacion En pago procedure. Our property was valued some 15k above the outstanding mortgage. Today I have recieved a response from our bank as follows. En relacion a su Dacion en Pago sobre vivienda hipotecada a favor de nuestra entidad, le comunicamos que Ha sido denegada en la situacion actual. La aceptacion de la dacion en pago es potestativa del banco y se autoriza de forma muy restictiva y preferentemente sobre viviendas. nos pnemos a su disposicion para cualquier otro planteamiento que quiera realizarnos .Atentamente.

After  crude translation i believe it has not been granted, is this the end of the road for us with this procedure?

No, it is not.

I would use a lawyer for a good letter in answer  with proper statement of rights in your favour and will leave the situation as it is right now. They will ahve to finally either repossess the house ( in whioch case you would have a procedureal right to answer the repossession with a proposal for a negotiated agreement) or allow the dacion.

As a reminder: our persepctive when deffending daciones en pago is due to the fact that the Banks ( we all know now) iresponsably financed with speculative basis and no control, so... those who made the mess....

Who is supporting our team today?

Maria

What are the chances of being pursued for a 'shortfall' if one ignores the banks preferred payola route, empties ones dwelling, and just rides away? The bank has already absorbed, very quickly, our so-called 'profit' by shafting us at 6% interest for the first 18 months mortgage payments or so. Then they grossly overcharged for property and life insurances etc. As far as I'm concerned they have had the great bulk of my life savings, other costs and charges have soared to the extent that getting the hell out is a very attractive option. Has anyone here just handed the keys back with a cheery 'Adios'? What was the upshot? Would greatly welcome any advice and/or opinions. Thanks, Rollo

Rollo:

Better than just running I would advise you to run  but with a copy of a letter sent to the Bank with full accounts of the rights which assist you for the dacion en pago act. This way, if they tried to claim against you, you will have a fully legal title to deffend your  position and demonstrate your will to pay your debt with the good ( house). If they tried to pursue the claim in the UK ( which I see as unlikely, more in these times when Banks and saving banks need to look for buyers better than debtors), you will have,again, the proof on your will to fulfill your obligations.

Best regards,

Maria