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Legal Advice

Costa Luz Lawyers > Legal Advice

New Royal Decree on Housing & Rental

1st.- Elimination of the need to register the lease contracts in the Property Registry, so that it may produce effects with respect to third parties It is no longer necessary for the lease contracts to be registered in the Land Registry so that they can have effects with respect to third parties during the period of minimum duration legally foreseen. Thus, if during the first five or seven years of the contract, depending on the landlord being a natural or legal person, the right of the landlord is resolved by causes established in Law, the tenant may continue in the lease until...

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Free yourself from your burden as a guarantor in Spain

I volunteered as a guarantor of my son's mortgage loan (I am an avalista) and want to see if I can get rid of that burden. Can I stop being a guarantor? Yes, there are two arguments based on Consumer Law for you to argue against the bank for the nullity of the guarantee clause: One is the lack of transparency because with the endorsement clause, the waiving of the benefits of division and excussion are usually imposed with no explanation of the legal and economic significance of such benefits or no indication of joint and several liability. Another is the argument of the...

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New rules in relation to tourist rentals in Spain come into force today

The new rules for tourist rentals imply a control power over tourist rentals by the Community of Owners The use of properties as a "tourist" lease can be prohibited by agreement of 3/5 parts of the totality of owners and shares in the community. The same majority will be required for the creation of additional fees or an increase in the share of the common expenses of particular units where said tourist rentals are carried out. These modifications cannot imply an increase of more than 20%. These agreements will not have retroactive effects and once adopted by the above mentioned quorum, must be...

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Have you done your homework before Brexit?

As a Spanish resident As uncertain as the situation is at present, it is wise to check and review some aspects of your life in Spain before Brexit is finally implemented (if that actually happens).  We would recommend checking your Spanish documents to see if they are all up to date. Padron registration Tax registration Social Security registration Car registration Health Services registration NIE number With regards to your Will, you can still enjoy the benefit that Brussels IV offered in terms of deciding that UK Law should govern your inheritance instead of your country of residence.  Once Brexit happens on 29 March...

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Penalty interest for delay in mortgage or loan payments

Do not pay delay/penalty interest more than 2% above the agreed interest rate of the loan or mortgage If the penalty interest for payment delay of your loan (personal or mortgage) is more than 2% above the agreed interest rate of your loan or mortgage, the judge must maintain the rest of the clauses of the contract and cancel the clause relating to delay/penalty interest.  Nothing can be charged to the consumer if the rate is more than 2% above the agreed loan rate. Why 2 percentage points? The Supreme Court in Spain has considered 2% as the maximum which will not imply...

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Spanish Timeshare industry being punished by the Supreme Court

The Timeshare industry is being heavily punished by the Spanish Supreme Court as, in most of the cases; contracts were drafted against formal requirements of the Law. The Supreme Court is condemning Timeshare companies to refund clients a proportional part of all payments made by them. Being the proportion based on the number of years that the timeshare has been used over a period of 50 years.  The Supreme Court is also condemning related financial institutions to refund amounts jointly and severally with the Timeshare companies. CostaLuz Lawyers have so far  helped clients in these timeshare developments:  Diamond Resorts, Club Primavera,...

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Possibility of judicial declaration of nullity of foreclosure proceedings

Is it possible to obtain a judicial declaration of nullity of foreclosure proceedings when the request for payment to the defendant (mortgagor) has not been made with all the guarantees required by law, according to the interpretation made by the Spanish Constitutional Court? When a foreclosure proceeding is initiated in Spain, the mortgage debtor has very limited possibilities for opposition.  Hence the importance for the debtor to analyze in detail if the mortgage procedure complies with all procedural requirements. If the nullity of the mortgage process is approved by the Court, the consequences are that everything that has been done is not...

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Spanish Government announces law changes to force banks to pay mortgage tax

The Spanish Government has just passed a Decree by which mortgage lenders, rather than borrowers, will from November 12th, pay the Stamp Duty tax charged for the opening of the mortgage. The decree also ensures banks cannot deduct this cost on their tax returns. With this legislative decision, the executive government has over-ruled the Supreme Court’s recent decision which made the consumer pay the fee. The government justifies the fast decision due to the fact that the Supreme Court has created a big confusion: In mid-October the Supreme Court changed over 20 years of Case Law by ruling that banks, not borrowers,...

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Q&A on Tourism Rentals in Spain

The rules that as owner you have to follow to rent your property to tourists in Spain are a complete hieroglyph today. What is the law that regulates tourist rental? Currently, there are 43 different Tourism regulations in the Spanish national territory. The City Councils can also add requirements from the competences they have in planning matters. Can the Community of Owners prohibit tourist rental? The Community of owners does not have the power to limit the owner's rights, among which is to rent the property. They can regulate and enforce the statutes that regulate the use of common elements of the...

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Refusal of property keys back by the Bank

What if the Bank refuses to accept my property keys back? Not the end of the story: Monitor and oppose if: (a) Your mortgage deeds have abusive clauses which can stop or void the repossession: anticipated maturity clause, lack of communication of the sale of the mortgage debt to a vulture fund, floor clause, IRPH… (b) The enforcement procedure is being according to Law (c) Value given to the property for auction is correct, mainly if Banks are respecting the minimums established by Law as a barrier for them not to bargain with mortgage debtor rights. In most cases, your pending debt is below the value...

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