6 August, 2009

The Poor Man’s Solution

Mike Walsh

Handing in the keys by hard pressed homeowners unable to meet their mortgage payments can lead to collateral damage that worsens the problem.  The banks, the biggest unwilling estate agents in the UK and Spain are not happy. Repossession proceedings are time consuming and expensive. The procedure can take up to three years and there is the additional haemorrhage of lost interest and legal fees.

The legal procedure known as a Dación en Pago may be a better option for the defaulter who may otherwise face years of legal wrangling and even bankruptcy: The outstanding mortgage is still an obligation as are the additional costs in the event of default.

Put simply it means surrendering the keys to the bank by formal declaration before a notary. In return the bank agrees to cancel the balance owing and release the mortgage holder from further liability.


The credit consequences of the cancelled debt do not transfer. If the defaulter returns to their own country they can start off with a clean sheet.

The Dación en Pago is established by Article 1.175 of the Spanish Civil Code (SCC) and the transfer, unless otherwise agreed, is limited to the value of the mortgage which corresponds to the value of the property. In other words if the outstanding mortgage is 100,000€ but its value is only 80,000€ there will be a shortfall of 20,000€.


There are three important requirements for the Dación en Pago to be acceptable: The borrower should not have already defaulted. The lender should not have already commenced repossession proceedings. Thirdly, the property should not be in negative equity exceeding (as a rule of the thumb) 20 per cent if it is to be considered.

There is no obligation on the bank to accept the Dación en Pago solution but there is equally good reason for their doing so. As commonsense suggests these procedures must be conducted by legally qualified professionals.

Turn your house into income


3 November, 2008

A new regulation introduced last week stipulates that taxes and other extra charges can no longer be hidden in advertising for airline tickets. Airlines have to show the final price in all their publicity from now on, with fuel surcharges and airport taxes included. The regulation is part of an EU initiative designed to allow the public to better compare offers in the marketplace.


27 October, 2008

Mijas resident Isabel called on the Town Hall last Thursday to knock down her house and stop fining her. Sra Mart�n, 56, and her husband began building their house four years ago in the La Rosa urbanisation in La Cala but the Town Hall paralysed the work because of town planning irregularities. Accompanied by Antonio Blanco, president of the Association for the Regularisation of Housing in Mijas, Sra Martin told a press conference that her husband had then gone into a deep depression and died a few months ago. She said: “My husband lost the will to live, his dream had died.” Her lawyer had written to the Town Hall on July 11th asking them to demolish the house but had not received a reply. Sra Martin said she had received three fines – the last one on October 3rd – of €2,356 for a house measuring 288 m2 when in fact the building only measured 100 m2. She said it was “not even a house, just a structure”. She added: “If they are going to demolish it, then they should do it now and stop fining me because my health is not good and I’m going down the same road as my husband.” Antonio Blanco compared the situation to Marbella where the mayor has announced that she will fight to ensure that not a single illegally-built property is knocked down.


27 October, 2008

A Madrid court has granted paternity leave of 13 days to a lesbian after Social Security had told the woman she was not eligible. Carmen Diaz married her wife in 2006 who gave birth in February 2007 to a son, who she adopted. The Workers Commissions union said that when she applied for paternity leave, the Social Security Authority had made extra demands which were never made when men claimed, A union spokesman said it regretted what he called “these situations of discrimination”, and considered the court’s decision an important one because it would encourage gay and lesbian couples to apply for the paternity leave which they were entitled to.


27 October, 2008

According to a report in El Pais newspaper last week, the United Kingdom and Germany have asked Spain for explanations about what they consider to be abusive expropriations of property owned by their citizens here. Britain has already asked for information from both the Foreign Minister Miguel Angel Moratinos, and the Spanish ambassador in London. Thousands of foreigners and Spaniards are affected by the Ley de Costas, Coasts Law, which came into force in 1988, but remained largely unenforced until 2004 when Cristina Narbona was appointed Environment Minister. The law forbids building on coastline land and states that those built before 1988 will be expropriated by the state, which will give the owners a 30-year use of the property, to be extended to 60 years in some cases. The paper cites the case of the Briton Cliff Carter and others at the La Casbah urbanisation in El Saler in Valencia. In a statement, the Environment Ministry said it has no intention of changing the current legislation. British consuls are reported to be recommending British citizens to complain to the Defensor del Pueblo, the Spanish ombudsman, or to take their case to the European Parliament which has already been informed of the problem. Britain said she understands that Spain wants to limit construction along the coast, but they do not share the method by which they are expropriating property, considering that it affects those who have purchased in good faith.


13 October, 2008

A delegation from Alozaina village met Junta de Andalucia officials last Friday to demand changes in the gun law arrangements around their village during the annual three-month shooting season that began on Sunday, October 12th. A local resident reported that Junta workers have been putting up “hunting land” notices on all the roads around the village without consulting local homeowners and without any consideration for the safety of local people and their domestic animals. Last year, weekend hunters and their dogs indiscriminately killed cats and protected birds such as eagles in a succession of blazing shooting sprees. Shotgun damage to an electricity pylon resulted in a major power blackout and one homeowner standing outside his house was hit by shotgun pellets. Since last years successive “invasions” killed off all the local cats, rats have been free to proliferate and have now become a serious problem. Local residents want the Junta to enforce national laws that are supposed to regulate shooting and protect homes and special agricultural areas such as their commercial olive and orange groves. But they suspect the Junta has been ignoring the controls because it has been making a lot of money from selling hunting licences. It is estimated that in 2006, the Junta may have made nearly €500,000 from licence sales. The Alzoaina delegation included representatives of Spanish families who have owned local land for generations as well as expat owners including Dutchmen, British and Danes. Between them they own about 100 acres, most of which is supposed to be out of bounds to hunters, but the latter claim that the Junta notices free them of any restrictions.


13 October, 2008

Madrid City Council introduced a law last week to take human billboards off the streets, along with pamphlet distributors and cars with huge ads on their roofs, at the beginning of next year. Madrid Mayor Alberto Ruiz-Gallardon announced the clean-up two years ago, although not all advertising symbols will be banned. The familiar chemist’s green cross stays, as do Tio Pepe and Schweppes. The city’s famous Gran Via and Puerta del Sol will still light up at night but the neon lights will disappear from most of the oldest parts of the city. And the new law also limits the amount of light output for the ads. But there will be no more two-legged billboards offering to buy gold, discounts on all and sundry, or advertising the services of African witch doctors “littering” the streets and causing “visual contamination”.


6 October, 2008

A source close to the Guadalhorce Valley municipalities reports that Alhaurin de la Torre has joined the list of local councils that are seeking ways to penalise property owners whose papers are not in order. Owners there who apply for any municipal services such as connection to the water mains or the sewage system face a bill of 6% of the value of their property if their properties are illegal. The council in Alhaurin el Grande is already making owners in a similar situation pay a fee of €3,000 for a building licence before they can be connected to municipal services. The source said most other councils will soon follow suit in an effort to comply with the Junta de Andalucia’s proposed Territorial Planning Law, which is aimed at making local council put their houses in order as far as illegal properties are concerned. He said the Junta is currently giving people what he called a “window of opportunity” to regularise their properties, which involves going through all the steps required by law for legal properties – architect’s plan, notarising the escritura and registering it with the local Property Register as well as the provincial register in Alora. He said those people who believe that the local council is going to wave a magic wand and “legalise” their properties for free, are in for a shock. He said people will be given time to sort out their papers but local councils cannot waive the fees for the architects, notaries and registries, which will still have to be paid. He said councils are now waiting for the Junta in Sevilla to tell them when they have to start dealing with all the illegal properties in their respective areas, which will be done on a case-by-case basis.


6 October, 2008

Since a new law came into force on July 25th, the Local Police in Antequera have ordered the towing of 22 vehicles that appeared to have been abandoned. Under the new law, the vehicles are kept under observation during a period of 15 days and if no-one collects it during that time, they are towed to the local car pound where they are kept for two months before being taken to be crushed in an authorised scrap yard. Owners face fines of up to €1,500 if the police are able to trace them.


6 October, 2008

Controversial National Court Judge Baltasar Garzon came under more fire from the press last week when it was revealed that two dangerous Turkish drug traffickers had been released from jail through an oversight on his part. The men walked free in July when their two-year provisional imprisonment ended and the judge failed to extend it. Erden Vardar and Sahin Eren were detained on July 12th, 2006, in Huelva as they tried to smuggle 12 kilos of heroin into the country. Their arrest led to the dismantling of one of the biggest heroin smuggling rings in which another Turk, one Croatian ten Spaniards were detained and 30 kilos of heroin were seized. Judge Garzon had just arrived back from a visit to Colombia where he had opened a seminar, just days before the two-year provisional sentence was due to end, and a few days later left Madrid again. He finally ordered the extension of the men’s provisional imprisonment a few days after it should have been done. As a result, their lawyer was able to get them out of jail. The judge said their release made no difference because they were still in the country and were due to appear in court again later this month.


25 August, 2008

A judge in Granada said last week that drink-driving controls are “illegal and illegitimate”, represented an “obsessive persecution mania” against drivers and were a “serious violation of the principle of the right to equal treatment before the law”. He then proceeded to absolve a man brought before him for failing a breathalyser test. The judge based his remarks on the fact that someone caught driving under the influence of drugs can get off scot free. Although it was a so-called “fast trial” – one that normally doesn’t last more than 15 minutes – it took the judge six type-written pages to expound his theory.


18 August, 2008

Health and Consumer Affairs Minister Bernat Soria announced last week that he was drafting a law to protect the public from what he called telephone spam, that is, unwanted calls from people trying to convince individuals to change their telephone company or offering unsolicited banking and insurance services. He said the calls were particularly bothersome as they were usually made when people were at home resting after work. The law would make such calls illegal and would allow his ministry and consumers’ associations to take legal action against them. He said the law would probably come into effect by the end of the year.


18 August, 2008

The so-called Baby Cheque of €1,500 for each child born after July 1st last year has already spawned an Association of Families discriminated against by the Baby Cheque Law. One paragraph in the Baby Cheque Law which did not get much publicity was the one that excluded children born to Spanish fathers and foreign mothers who have lived less than two years in Spain, even though the children will have Spanish nationality. The Association’s spokesman, José Luis Gil, said: “it should be called the Mama Cheque because it does not take into account the father or the child. According to the National Statistics Institute, just over 25,300 children born last year had foreign mothers and Spanish fathers, and Sr Gil estimated that some 15,000 families could be adversely affected by the Baby Cheque Law. He said the Association has already collected nearly 250 complaints but was being given the run-around: “The Equality ministry sends us to Education, Education sends us to the Labour ministry, where they tell us it’s a tax matter.”


4 August, 2008

Between December 2nd last year, when a law was introduced to convert a number of traffic violations into crimes, and the end of June this year, nearly 30,000 people have received prison sentences for drink-driving, speeding or driving without a licence. Most of them were first-time offenders and had their sentences, ranging from three to six months, suspended. However, a Traffic Authority spokesman said the majority had been shocked by the experience and had not been caught again.


7 July, 2008

Even though the pace of work has been stepped up in the country’s law courts, the Justice Ministry admitted last week that nearly 2.5 million cases would still be pending at the end of the year. A report issued last week showed that while the number of cases will rise by 2.6% this year, the number that will be solved will only rise by 0.6%. A ministry spokesman said most of the cases would be at some stage of the normal judicial procedure and would be resolved in a matter of weeks or months. He said the longest cases were those brought by private citizens against the government which could last anywhere from one to five years.


30 June, 2008

Parliament’s environmental committee approved resolutions last week that urge Spain to comply with the Great Apes Project, founded by philosophers Peter Singer and Paola Cavalieri in 1993, to give “non-human hominids” the rights to life, freedom and not to be tortured that have hitherto been limited to humans. It is the first time any national legislature has called for such rights for non-humans. The new resolutions, which have a cross-party support, are expected to become law and the government is committed to outlawing harmful experiments on apes within a year. The director of the Great Apes Project in Spain, Pedro Pozas, said: “We have no knowledge of great apes being used in experiments in Spain, but there is currently no law preventing that from happening.” Keeping apes for circuses, television commercials or filming will also be forbidden and breaking the new laws will become an offence under the country’s penal code. Keeping an estimated 315 apes in zoos will not be illegal, but supporters of the bill said conditions will need to improve drastically in 70% of establishments to comply with the new law.


30 June, 2008

Two of Sr Zapatero’s “ladies” seemed intent last week on reinforcing the old machisto idea that women are not supportive of their own sex. Equality Minister Bibiana Aido had complained that Moslem men can walk around in Western clothes but expect their women to keep their heads and bodies well covered. She said she respected all cultural traditions, except those that promoted inequality between the sexes or discrimination. She also mentioned the Mayans in Central America, where the women are expected to wear cumbersome traditional dress to maintain their cultural tradition. Deputy Prime Minister María Teresa Fernández de la Vega replied that the government “respected traditions when these respected the law”. She said Sra Aido’s remarks had “introduced an important debate on national identities and cultural differences” but stressed that it was important to be “extremely respectful of each country’s habits and cultures, as long as such cultural traditions do not attack freedom”. Sra Aido did not comment on her lesson in political correctness.


30 June, 2008

Interior Minister Alfredo Pérez Rubalcaba confirmed last week that the Traffic Authority is considering allowing 16 and 17 year olds to drive as long as they are accompanied by an adult and had passed the written exam. At present, learners can only drive during their lessons. He said the government was keeping an eye on a pilot programme in France and if the results were positive it would be tried out here. Learner drivers are allowed to drive in several countries, including the US and the UK, when accompanied by a licence-holding adult. Sr Rubalcaba said a Traffic Authority report revealed last week that 16,600 drivers have lost, or are within one point of losing, their licences since the points system was introduced last July. He also reported that 1,017 people have died in road accidents in the first six months of this year, a figure he described as frightening, but noted that this was 20% lower than the figure for the same period last year.


23 June, 2008

A Murcia judge ruled last week that a woman had been an “indirect victim of discrimination because of her sex” and recognised her right as a working mother to choose her working hours. According to article 37.5 .6 of the Workers’ Statute, workers have the right not only to work, but also to a family life and time to cover parenting obligations in the interest of their children. The woman, who works in a warehouse, has two children aged 3 and 8 months. The working hours at the warehouse are divided into three eight-hour shifts and the company expects its employees to work each of the three shifts in turn. In an effort to balance her working life with her family life, the woman took the case to court with the help of her union’s legal services. The judge ruled that she only had to work in the mornings from 6 am to 2.30 pm.


23 June, 2008

The Junta de Andalucia’s Ethics and Health Research commission will begin to debate a law this week to guarantee people a “dignified death”. It will be the first of its kind in Spain and the Junta’s Health councillor María Jesús Montero said the law would clarify “concepts that are often confused and which are radically different”, such as euthanasia, assisted suicide, or withdrawal of artificial treatments. She said the law will not include euthanasia or assisted suicide because they appear in the Penal Code and are therefore in the jurisdiction of the central government in Madrid.