Why should you make an spanish will for your spanish estate

I can not recall how many times I have advised all adult persons to make a Will. But a thing worth saying is worth repeating. So, You really should make your Will

Tradicionally, our advice to all our clients was, if you have property in more than one Country, you should make a Will in every Country where you have assets. Seems to make sense, that if you have a few millions, or a few pounds, in England, Ireland or elsewhere, make an Will, then if you also have a villa in Spain, or a small sum in a Bank there, make a Spanish Will.

That way each jurisdiction can be getting on with the formalities of putting the terms of your Will into effect as soon as possible after you pass on, with no need for Spain to wait until the your national Probate Registry and Tax man have finished with your papers in your country.

The European Succession Regulation No.650/2012 (or “Brussels IV”) came into force last year, but England, Ireland or Denmark are still not signatories to it. This new regulation it is supposed to make things simpler for other citizens with property in the other Countries of Europe. Basically, you can now say in your national Will that it should dispose of all your Assets, both in England and Europe and that the Laws of Succession of your country should apply.

As an example, under the Laws of Succession of England, you can leave your belongings to whoever you choose in your Will. There is no requirement in England, as there is in other Countries [including Scotland even] that certain persons – usually spouse and /or children – should take a share of your estate as a matter of law. So if you are English, make your Will in England and elect English Succession law, then Brussels IV will tell the Spanish authorities that they must not seek to impose their own usual forced heirships upon your wishes.

Unfortunately, there will always be room for problems to arise. There are many legal issues arising from scenarios involving unusual combinations of place of residence, country of citizenship, and country of domicile, from which scope for long argument and expense can be identified.

The first thing you will need to prove to the spanish authority is that your Will was validly made in your country. He will not so much be impressed by the fact that the Will is stated to have been signed in the presence of two witnesses, as alarmed by the fact that it may not have any Notary stamp or certificate – They may also say;  “OOer, I’ve never dealt with this before. And the Will is in English. I can’t read English. And what is the Probate Registry of Leeds, Dublin, etc, and what are its powers?”

There are likely to be other areas of “mismatch” when seeking to persuade spanish authorities to   accept a Will made under a foreign jurisdiction as valid.

And some foreign requirements as to wills seem very sensible. In the Philippines, a blind person cannot make a valid Will unless “Article 808. If the testator is blind, the Will shall be read to him twice; once, by one of the subscribing witnesses, and again, by the notary public before whom the will is acknowledged” (Civil Code of the Philippines).


In Ireland, a blind person can make a Will but it cannot be admitted to Probate unless one of the witnesses gives a sworn statement about what took place. So again, problems can be envisaged in such a case where the Will maker has outlived his witnesses and no such sworn statement was made.

This could, at the end, lead our clients to follow a more expensive and time consuming procedure in order to register the property in Spain, than simply executing a properly laid out spanish will. So, our conclusion remains that new Law does create also new problems. So, it still remains simplier & cheaper for those who have estate in Spain dealing a separate will regulating separately only their spanish estate. 

Also, it is still advisable to revise your previous will to ensure that is adapted to the Brussels IV new regulation as we pointed out in our post before:

http://javierherrerallamas.blogspot.com.es/2014/12/have-look-at-your-spanish-will-before.html

So, for practical reasons, we keep on insisting on making spanish will to arrange the inheritance on spanish estate.  It will save time & money.

Javier Herrera Llamas

Off plan properties. The banks can held responsible for the moneys invested.

We have very often found the case of clients that, some time ago, have invested into an off plan property that was never built or delivered in time. 

It is not strange to find out that the developer went bankrupt sometime ago, leaving an empty plot, or in the best case, an unfinished property. When the financial crisis struck in 2008, many developers collapsed, leaving housing projects unfinished. Most new developments were sold off-plan.

 Property-buyers who had put down cash deposits were at the end of the list of creditors, and thousands lost their money.

Until recently, whenever we found this situation, we have been continuously advising that there was not a clear & effective legal solution to recover these moneys. 

This fortunately, has changed dramatically for the better. 

After a a Supreme Court ruling in Spain last year, for the last 14 month, The Spanish Courts have been continuously confirming that the bank where the moneys were deposited were legally bound to guarantee those funds to the purchasers. In case that the development did not get completed in time, or that the developer went bankrupt or alike.

Just as an example, Banco Popular, BBVA, Banco Mare Nostrum and Valencian Building Society S.G.R. have been ordered to pay over 2 million Euros plus interest, to 40 British investors.

The Courts are making clear that Off-plan property buyers in Spain have an “inalienable right” to have their off-plan deposit underwritten, rights that cannot be waived by banks who, having issued a collective insurance cover failed however to grant individual policies to buyers. This also includes “touristic apartments” as they are to be used by the owners as holiday homes, irrespective of their use as an investment for the most part of the year.

Banks have been ordered to pay the Courts the designated amounts, or face enforcement proceedings.

These decisions of the Courts have set a precedent that is fully applyable to similar cases with a very solid possibility of success.

We are consequently suggesting our clients to take another look at the matter, with views to obtain a compensation in Court for their investment. 

So, if you are in such a situation, please do not hesitate to contact us. We will be studying your case without compromise. Please note that there may be statuory limitations and deadlines applying to your case. So, do not leave it too long. 

Fortunately, sometimes, the Law changes for the better.

Our Fees

Abraham Lincoln once said that an "attorney's time is his stock in trade".


Our lawyers are retained to provide their time and apply their knowledge, advice, and thoughtful consideration to our clients solve their problems. An attorney's hourly fee should fairly reflect his level of skill and experience.


Initial Consultation

There is no lawyer without a client. The client goal is key to define success for the work of the Solicitor. We need to understand fully what are your needs, apart from the facts of the case, to be able to provide you with the best service.

We used to offer our first consultation free, but unfortunately, we are not doing it anymore. Other clients, that have already contracted our service, had to wait more time to see their matters being expeditively advancing because we were taking time to attend this free of charge consultation. 

Our first consultation meeting is estimated to be 1 hour billing time, so that we can meet you in person (or online) to review documents & your situation. We also require the fee being payed in advance, but we will discount this amount from any legal matter that we undertake, so we can certainly keep saying that is free (provided that you decide finally to be a client of ours). 

Please understand that some cases are more complex and will require more time. In those cases, we will tell you in advance an estimation of the fee that might be required.

Hourly Rates

This is our standard billing criteria. We will charge our clients for the time that an attorney, paralegal, or law clerk spends in the prosecution of his or her matter. Our hourly rates are 180€ professional solicitor and 90€ paralegal assistant, with increments of minimum six minutes (one-tenth of an hour), non vat included. We will gladly give you an estimate of the time expected for the case. We will also let you know when the time involved exceeds the estimation provided.


Services Offered For Fixed Fees

For conveyance cases, wills and straightforward inheritance work, we have flat fee rates available. The amount of the fee depends upon the conveyance value and the complexity of it. Whenever possible we will offer you a fixed fee for dealing with the whole of your case.

Please note that the fixed fee could be revised only if the nature of the work changes substantially, for example, if we discover title problems when dealing with the purchase of a property and you decide to continue with it asking us to resolve the problems before you purchase, in the case of an inheritance when new assets appear during the procedure which where no disclosed when the initial budget was prepared, etc. In any case, we will let you know in advance prior to compromise new fees. 

Correspondence service fee

It is a common policy after a conveyance to address all postal and electronic correspondence from our non resident clients to our personal address office. This correspondence usually include notifications from communities, utilities, townhall, tax authorities, etc… and the service entails us a labor cost and added time in classifying the relevant information and advising and informing our clients about it.

We are offering a six month free correspondence service to our clients after we deal a conveyance process for them.

After the six months period of free corresponding service, we are offering our clients to continue with this service for a monthly fee of 30 euros + VAT, that will be automatically deducted in your bank account if you do not give us difference instructions about it or alternative correspondence address of your preference to change them.

If you are already a client of us and we have been receiving your postal and electronic correspondence and notification in the past and now, please note that we will start charging your bank account for this service starting May 2016. Otherwise please let us know an address of your convenience to modify it.

Javier Herrera Llamas

Have your Bank been charging you more than they should for your mortgage?. Time to revenge its coming ...

From 2013 the spanish courts have been repeteadly considering null and void the mortgage floor clauses. You can see our note on our blog in 2013. This clauses were designed to protect banks from negative interest rates.

http://javierherrerallamas.blogspot.com.es/2013/10/mortgage-floor-interest-abolished-take.html

Last week a Spanish court ruled that the country's banks leaders can no longer sell mortgages with so-called floor clauses. All main banks are involved, including Caixabank, Barclays, Bankia, and Banco Santander. Caixabank and Bankia.

The court said banks had to repay customers what they had lost since May 2013, when Spain's Supreme Court declared these mortgages, whose rates cannot fall below a benchmark, were invalid if they had not been presented clearly. This means the ruling is only retrospective to May 2013.

This ruling by a local court in Madrid followed class action suits by customers alleging that banks had not properly explained the clauses to them, which prevented them from benefiting from the euro zone's record low interest rates.

Most of the estimated 4m mortgages affected were sold during the 1997-2007 property boom when buyers were paying top prices for their homes. When the bubble burst they were unable to benefit from falling interest rates.

It is estimated that those affected pay from €179 (Euribor +0.5%) to €213 (Euribor +1%) more on a €150,000 mortgage than they would if they didn’t have a fixed minimum rate mortgage.

As the recession set in and people were unable to meet their mortgage repayments, they were evicted in growing numbers, peaking at an average of 500 a day in 2012. Under Spanish law homeowners cannot claim bankruptcy over a mortgage as it is regarded as personal debt.

So even after the banks foreclose and repossess a property the former owner still has to pay off the mortgage, as well as associated legal charges.

Some Spanish banks  have already removed the mortgage floor . Since the third quarter of 2015, Caixabank has eliminated most of its mortgage floor clauses. Banco Sabadell, the fifth-largest in Spain which has so far refused to get rid of the clauses, said they would analyse the ruling and take a decision later.

Banks including Barclays and Santander face a €5bn (£4bn) bill after a Spanish court ruled that millions of fixed minimum rate mortgages were null and void because of the “lack of transparency” in the way they were sold during the property boom.

Last October the European Commission asked Spanish banks to remove the clauses and even repay customers over the whole life of the loan, beyond the May 2013 limit. The European court in Strasbourg is expected to rule on 26 April whether the banks’ liability should extend beyond that date. The European commission has already said it believes the payments should be backdated to the date the mortgage was signed, on the grounds that if a clause is declared null, it’s null from the beginning.

So, it is clearly time to press your bank to get some of your money back. 

Javier Herrera Llamas

New Andalusia Rental Law: Compliance and Fines

The regional Government of Andalusia, known as the Junta de Andalucía, has just passed a decree regulating tourist rentals in the region, following in the footsteps of other regions like Catalonia, the Balearics, and the Canaries. These new rules apply to any short term rental agreement which is habitually offered as accommodation at a price fixed by the owner and which is advertised through tourism channels, such as travel agencies or online platforms. According to the Junta de Andalucía, every property which is publicised on these portals and puts the owner in touch with travellers has to be registered as tourist accommodation -

This new regulation is arising a considerable amount of queries from our clients, so we have prepared these notes for general guidance:

1.-Is there a ban on short term rentals?

Many UK newspapers incorrectly reported that there was a ban on holiday rentals for property owned by private individuals. This is absolutely not true as the objective of these changes is not to protect the interests of the Hostelry Sector, but simply to set minimum quality standards that will make the whole tourism industry more competitive.

2.-Are long term rentals under this new regulation?

Not at all. The regulation exclude properties rented for more than two consecutive months by the same person, which would be governed by the normal property rental law. If the property is rented out property for weeks or fortnights during the three summer months, it is clearly under the new regulation. 

3.- What facilities does a property have to have?

It must have its first occupation licence. The bedrooms must have exterior ventilation and means of shutting out the light. There must be coolings and heating systems at least in the lounge and bedrooms. The regulations insist on domestic appliances, a first aid kit, information about the area in the form of leaflets, maps, etc, and a complaints book. the regulations also specify that the property must be cleaned when clients arrive and leave. Bed linen must be provided, along with a spare set. Tourists must also be given a contact telephone number in case any problems rise, and must be made aware of rules set by the community of owners. The maximum capacity for a single property may not exceed 15 people.

4.- How & when can a property be registered on the Registro de Turismo?

Registration will start officially on May, the 12th, 2016 (in three months’ time, after the decree was published in the Official Bulletin of the Junta de Andalucía (BOJA). The Junta’s Tourism Department estimates that the register will be operative in May, and recommends using this interim period to prepare the paperwork and the property: find or obtain the first occupation licence, download the form, get hold of leaflets, tourist maps, etc or install air conditioning. The aim is that by the summer, properties will officially be able to continue with their normal activity. You can always to ask registration in advance.

5.- What documentation has to be presented?

It is not a complex process, but this is one of the most common concerns among owners. Prior to the presentation you will be needing to obtain your NIE number, and the details corresponding to the registration of your property in the Catastro. You will have to present a statement, that has to be filled in and signed, and then presented into the corresponding office. The registration will then be processed so the property can be rented, and a code will be assigned to identify the property. That code must be included when advertising it on online platforms. You could also authorize somebody to do it on your behalf.

6. -What are the tax implications of a property which is rented for tourism?

It is treated as an urban rental, in other words the money obtained from rentals has to be declared as annual income. It is not necessary for an owner to register as self-employed, no separate taxes have to be paid and IVA does not have to be charged if the property is being rented out by the owner. This type of tourist accommodation is treated as a service, not an establishment. 

We strongly advise to use this new regulation as an opportunity to revise your fiscal situation regarding your Spanish assets, and if necessary, regularize whatever tax statements could be pending. 

7.- Do you have to give each tourist a contract, or a bill, or ask for their ID for police registration purposes?

The rules say that you have to give each client a contract, even if they are only staying for one night. Also, that written agreement must be kept for one year in case inspectors from the Tourism authorities want to see it. The document must include the name of the person or company that is renting the property, the registration code, the number of people who will be staying in the property, the dates they arrive and leave, the total cost of the stay and the contact phone number for them to ring in case of problems. The owner can only issue a receipt for payment, rather than an invoice, and the rental price can be freely determined by the owner of the property. For security reasons, the people who will be staying in the property should provide their identity document upon arrival, but it is not yet been known whether these details need to be passed on to the police. Hotels and apartments do so online, but this process is not covered by the Tourism authorities.

8.- What happens if you want to rent out three or more properties within a 1,000 metre radius?

This is the most controversial point about these new regulations, because it states that people who rent out three or more properties in the same building or in blocks within a radius of one kilometre must register as Apartamentos Turísticos and are governed by this different regulation, which has been modified for this purpose. It is more demanding because it insists on an opening licence and certain requirements which include minimum measurements in different rooms of the property. Also, properties that are considered to “apartamentos turísticos” are treated differently for tax purposes. According to the Junta, anybody who owns three or more properties has to register as self-employed, and will be taxed in the same way as those who are running a business.In this case, they will come under the section of ‘apartamentos turísticos’ as far as Hacienda, the Spanish tax agency, is concerned.

Anyhow, it must be also mentioned that the rules, under the title Decreto 28/2016, de 2 de febrero, de las viviendas con fines turísticos y de modificación del Decreto 194/2010, de 20 de abril, de establecimientos de apartamentos turísticos, has failed to elaborate on two important aspects: what does compliance really entail and what are the fines for non-compliance.

1. In respect to compliance, the rules obliges owners to offer clients –among other requirements- the following: license of occupancy, rooms with adequate ventilation and darkening devices (shutters or similar), sufficient furniture and necessary appliances, touristic information whether in hard copy or electronic, of data for the area (bus schedules, close-by parking facilities, medical facilities in the vicinity and a plan of the town), complaint form, first aid kit, bed linen, cutlery and crockery adequate to the size and requirements of the property (and a replacement set for each). As if not enough, the law says owners will have to have a telephone number available to tenants where they can call to resolve any incidences, an instruction manual for kitchen appliances, details of the use of communal facilities and property equipment, as well as details on access of pets to the property and information on potential restriction for smokers and a few other requirements.But whilst some of the above are clear, the meaning of ambiguous words such as “adequate”, “sufficient” and “necessary” can widely differ depending on who you ask. Attending these grey areas is a pressing requirement.
2. The fine system is also not clear. The 2016 Act refers to a 2011 Rural Accommodation Act for elucidation of what fines are applicable. Some scaremongers have enjoyed spreading the belief that if you do not register, you will be fined up to 150,000 Euros. The reality is that failing to register their properties can “only” be fined between 2,000 and 18,000 Euros, the heavier monster fine of “up to 150k” being reserved for other contraventions i.e. unlawful discrimination or obstructing inspectors on duty.

Interestingly, the Act does not address the fines for failing to comply with one or more elements within the the long list on point a), for instance: missing spoons, dirty linen or insufficient first aid kit.

Previous experiences in other Spanish regions, where similar rules apply, shows us that lack of registration is attracting the vast majority of fines, with little or no precedent in respect to the degree or correctness of compliance.

So, if you are planning to rent out your property in a short term basis in the next future, we strongly suggest that you arrange in advance your registration. Also, should be wise to use this opportunity to check that you are fullfiling all fiscal regulations for your property in Spain. 

Javier Herrera Llamas