3rd Edition of Spanish Festival

FESTEJAR 2016

Festejar 2016

 

 

 

 

 

 

 

From left to right: Virginia Moreno, Claudia Font, Jesus Torre, Mariluz Simal, Antonio Guillén and Angel Miguelez.

The Spanish Desk from Gunnercooke attended last night the opening of the FESTEJAR festival in Manchester. It is the third edition of a Spanish festival in which, for four days (from the 1st the the 4th of September), visitors will be able to enjoy live music, food and drinks with the greatest “Iberian” atmosphere.

The festival brands itself as one with a “Spanish soul with a Manchester heart”, and we could not agree more.

As Antonio Guillen, Honorary Consul for Spain in Manchester, stated, he “really enjoyed the two previous editions of the festival, where Spanish food, music and drinks took over Albert’s square in a very civilised, tolerant and vibrant event”.

The festival gives us all the opportunity to check the good relations that exist between British and Spanish people, in such an international city as Manchester.

Giving the atmosphere that surrounded the opening last night, there is no doubt that the third edition is going to be probably even better than the two previous ones.

If possible, clear your schedule for this weekend and join us at FESTEJAR!

Gunnercooke’s Spanish desk grows with another Spanish lawyer

Gunnercooke

 

 

 

 

 

I am glad to inform that Claudia Font has joined our law firm Gunnercooke LLP to form part of the Spanish desk. Claudia is qualified in Spanish law and is registered to practice in both Spain and England. She is originally from Barcelona and will be based in the North West of England helping to consolidate what is probably the largest Spanish desk in the North of England. Myself and Claudia will also travel regularly to London to meet clients in the capital and provide services to UK clients both in the North and the South.

For further information on the team see below.

Gunnercooke LLP                                                   

SPANISH DESK

SERVICES FOR INDIVIDUALS

About Gunnercooke LLP

We are a full service legal firm, and our model is very simple:

  • We comprise solely senior lawyers – every lawyer has minimum 10,000 hours practising experience, and our clients not only benefit from the expertise this brings, but also from the authority it commands
  • We provide certainty and transparency over the cost of our services, providing fixed fee quotes that will never change
  • 95% of our lawyers have spent time in-house or in business, developing a commercial edge to their legal advice

Spanish legal services for individuals

 Gunnercooke LLP is probably the only law firm in the North of England with two qualified Spanish lawyers able to advise individuals in respect of their assets and investments in Spain.

The Spanish desk at Gunnercooke LLP is formed by Antonio Guillen and Claudia Font. Both of them are qualified to practice Spanish law and duly registered with the Law Society of Barcelona, Spain as well as the Law Society and the Solicitors Regulation Authority in England and Wales.

Antonio and Claudia are primarily based in the North West but have clients from all around the UK and can therefore advise UK clients regardless of their location. They also hold regular meetings with clients in the South through our London office.

The Spanish legal services provided by the Spanish desk are the following:

  • Sale and purchase of residential properties
  • Will drafting and estate planning
  • Administration of estates
  • Powers of attorney
  • Property disputes and litigation
  • Mortgages
  • Debt negotiation and Insolvency
  • N.I.E. numbers

About the team      

Antonio Guillen
Antonio Guillen

                                                            

 Antonio Guillen is a dual qualified Spanish lawyer and English solicitor specialized in Spanish civil law, in particular property and probate matters in connection to assets in Spain. He gives regular lectures on Spanish law to UK solicitors, STEP practitioners and Notary Publics and is known as a point of reference for cross border probate matters between UK and Spain. Antonio is also the Honorary Consul for Spain in Manchester and helps the Spanish Consulate and Embassy with certain delegated tasks in respect of Spanish nationals living in the UK.

Claudia Font
Claudia Font

Claudia Font is qualified in Spain, member of the Barcelona Law Society and also authorized by the SRA to practice in England and Wales (Registered European Lawyer) with over 13 years of professional experience. She specializes in civil law (property, family, litigation and corporate law, in connection to matters of Spanish law). She is well experienced with the process of transferring Spanish assets after divorce proceedings with the British and international clients, as well as property and litigation.

Gunnercooke LLP

 

1 Cornhill London EC3V 3ND 53 King Street Manchester M2 4LQ

T: 03330 143 401 www.gunnercooke.com

I am an Executor on a Spanish estate. Do I still need an N.I.E.?

The answer is simple: Yes.

Any person appearing in a Will that is going to be used for the administration of a Spanish estate, whether this is an English or a Spanish Will, requires a N.I.E. number. Obviously, this applies to those who inherit the asset but also to those who are not beneficiaries under the Will but have been appointed as Executors of the estate. In the event of several executors there is no need to get N.I.E. for all of them unless they have been appointed in a joint basis whereby all their signatures are required for any document with legal implications.

The above means that if Joe Bloggs died with no Spanish Will but he had an English Will that covered all his assets around the world and in that Will he appointed his brother and his trusted solicitor as Executors, both of them will need a N.I.E number and both will have to fly to Spain to attend the signing of the deed of inheritance at the Notary’s office. If this is not convenient, they can give power of attorney to someone based in Spain (ideally a lawyer or someone they trust) to sign the deeds on their behalf.

With regards to the N.I.E. this can be obtained in different ways:

– In person at the local police station in Spain

– In person at one of the Consular offices or delegations of Spain in the UK ( Aberdeen, Edinburgh, Leeds, Liverpool, London or Manchester)

– By way of granting power of attorney to someone based in Spain

For those who are not aware, there is no need to appoint an Executor in a Spanish Will as the heir/beneficiary has the same powers as a UK Executor. This is a mistake that many people make when signing their Spanish Wills. They appoint Executors when these are not necessary. Having said that, there is no harm in appointing Executors on a Spanish Will or in an English Will that is going to be used in Spain. It is just not as necessary and important as in the UK. In the end is up to the Testator or Testatrix to decide.

 

 

Ok, a dación en pago has been approved. Now what?

 Businesswoman viewing the contract before signing

 

 

 

 

 

If you own a property  in Spain but you are no longer able to pay its monthly mortgage instalments, one of the possibilities contained in the Spanish legal system is the dación en pago which is the procedure to enable consumers to surrender their properties back to the bank in exchange of clearing the debt.

In previous posts we commented that the amount of these procedures has decreased and it is no longer easy to get a dación en pago accepted. The fact of being a non-resident does not make things easier and some Spanish banks are too busy to be concerned about non-residents debtors as they have more important defaults to deal with in Spain.

If you have contacted your Bank and the Bank has accepted your case, there will be some tax consequences that you have to face. One of them is the payment of 3% Capital Gains Tax retention. This percentage is usually known for being the tax on the gains obtained in the sale of a house when the sellers are non-resident.  Given the circumstances in which this process is approved, you may think that there is no obligation to pay it. However, the truth is quite different. The 3% retention over the value of the property is also applicable in a dación en pago. The only exemption applicable to the dación en pago applies to those who are close to the level of poverty and for whom the house is their main residence. Therefore this kind of transactions for non-residents are still considered taxable regardless if there is a gain or a loss. Having said that, many Banks will bear that cost if the value of the property justifies it.

This 3% should be differentiated from other taxes due as the payment of the plusvalia tax, the payment of the annual property tax (I.B.I or SUMA) and the Community of owners’ fees which also need to be paid by transferor of the property before its transfer. In spite of the above, the real challenge these days is to have the dación en pago agreed. Banks are no longer keen on this agreement and very often the only way to achieve this result is instructing a lawyer able to negotiate the terms and explain the situation to the bank in plain Spanish. And for those lucky (or unlucky, depending on how you view it) enough to have arrived to an agreement with the bank for the surrender of the property, bear in mind that the Bank is entitled to request payment of all the appropriate taxes and costs prior to the transfer. Once again, it will all depend on your negotiation skills!

 

 

 

 

 

DEATH, BANK STATEMENTS AND TAXES IN SPAIN

When the Spanish estate is not only made of properties 

morguefile com1 (2)

 

 

 

 

 

When inheriting assets in Spain, the first thing that comes to mind is property but the truth is that assets also involve bank accounts, shares and other type of properties such as a car or even a boat.

We have written various posts about the procedure of dealing with inheriting a residential property but not enough posts on a related matter like the money in the Spanish bank. These accounts are often used to pay utility bills and taxes related to the property. However, some people who have been living in Spain for long periods of time end up, understandably, gathering important amounts of money in the bank. 

Whether you are dealing with an estate with both property and bank accounts or just a simple estate with a bank account, it will be necessary to contact the Bank in order to obtain a certificate showing the balance at the time of death. In certain regions of Spain, like the Balearic Islands, the bank will also provide you with a statement showing the transactions that took place in the 12 months before the death.

Banks generally will want to see the original death certificate, the certificate of last will and the last will of the deceased. Don’t be surprised if the bank only accepts to release information to a beneficiary or to a person that holds power of attorney from a beneficiary. This is also applicable to lawyers. Contrarily to what happens in the UK, where the solicitor’s word indicating that he/she is acting for the beneficiary or the personal representative is sufficient for the bank, the Spanish Banks will want to see a letter of authority or a power of attorney from the beneficiary to the lawyer. In certain occasions, the bank will only accept to release the information if the documentation is presented at his branch in person by the beneficiary or his lawyer! Finally, some banks will charge a fee for opening a “testamentary file” and producing the certificate, something that is clearly unfair and abusive and that should be challenged if demanded.

All the UK documentation, such as the death certificate, Grant of Probate and UK Will (if applicable) needs to be   translated by an Official Translator and legalised with The Hague Apostille to be valid in Spain.

Once the bank is informed about the deceased’s demise, the account will be frozen until the Inheritance Deed is signed and the Taxes paid. Once all this happens, the beneficiaries or the lawyer holding power of attorney will appear in person at the bank supplying the Inheritance Deed, the certification of the payment of the inheritance tax and they will sign a document agreeing the destination of the money, either transferring this directly to a UK bank account or keeping it in a Spanish account.

The above can seem complicated and the fact that each bank (and branch!) operates differently can make the whole procedure look far more complex than what it really is but in the end everything is down to providing the bank with the documentation requested and fulfilling its criteria so funds can be released as per the beneficiaries wishes.

First use license and habitation certificate. Tomatoe, tomato. Are they the same thing?

stock-photo-17808460-happy-couple-holding-for-sale-and-sold-signs-kissing

 

 

 

 

 

 

 

There are two documents which are essential before moving into a house in Spain. They are called first use license (“licencia de primera ocupación”) and habitation certificate (“cédula de habitabilidad”). These two documents sometimes have their own validity and in other occasions complement each other. It is difficult to summarize the requirements for these two documents because each region has its own legislation and also because they are very similar.

The First use license aims to check whether a property has been built according to the technical design and to the building permit. Once granted, it confirms that the construction has been built in accordance to the licence granted and the designs submitted at the Town Hall planning office. This licence is therefore vital for new properties or for properties that have been totally converted or with relevant major works. The person obliged to request this document is the holder of the planning and construction permit, generally the owner or the property developer.   It is an essential document required to apply for the provision of utility services, such as electricity and water and some regions in Spain demand this document prior to selling or letting a property.

In the most extreme cases, the absence of the said license could even imply a cause for the termination of a rental contract.  The lack of a first use licence can also prove a problem for an Estate Agent as he could be held liable for not checking this point and he could lose the right to receive his commission.

On the other hand, the Habitation Certificate is a document that certifies the minimum safety, health and occupation levels in a property in order to be dwelled. Furthermore it controls the minimum living surface and equipment in the property.

In certain areas like Cataluña, this document is compulsory and a property cannot be sold or let without it. In other areas, the first occupation licence covers the functions of the habitation certificate and therefore there is no need to obtain both. Depending on the kind of property and the place it is located, the expiration time will be different and will range from 6 months to 15 years. These are the reasons why it is advisable to verify this point before signing any contract or committing to the purchase of a specific property.

Obtaining this document is not complicated. If the seller does not have the document you must ask the seller to supply it before completion. If this is not possible and you are prepared to take the risk of completing without the habitation certificate in place, you must sort it after completion. The best way to do it is by contacting an Architect and requesting him or her for a certificate which will have to be endorsed by the Professional College of Architects. The Architect will inspect the property and verify that the property meets the regulations. It may be the case that someone appointed by the Town Hall also inspects the property prior to issuing the certificate of habitation, although this is not necessarily the case.  Once you have the Architect’s certificate, you have to present it before the corresponding public administration, together with the documentation required. Then, eventually, a certificate of habitation will be issued.

As indicated, these are vital documents that need to be requested prior to buying a property in Spain. Each region has its own intricacies but in general terms most of the regions in Spain request the existence of a document certifying the habitability of a property. These could mean both the First use licence and the habitation certificate or just one of them. When in doubt, the best thing is to seek independent legal advice as the lack of such a document could imply that the property is illegal and non-habitable.

What is a “cedula hipotecaria”?

You may have heard about the “cedulas hipotecarias” or covered bonds.

A “Covered Bond” is a financial product guaranteed by the whole mortgage portfolio of the bank itself with an interest linked to it. This is a safe product in a normal economic climate and it could be quite profitable (in fact, during the property boom it brought a lot of investors). But in the current economic climate it does not give any benefit, and it has a big defect: if the investor wants the money back, he will need to sell the Covered Bonds and who would want to buy anything linked to mortgages these days? Nobody!

Therefore, the investor has a problem. He has the money and needs it but he cannot take it. What can he do? Spanish Banks usually offer the following: The bank will take the covered bonds in exchange for a 4 year term deposit account, with low interest and the prohibition of getting the money out during the first year. It does not look like a great investment (except for the bank), but it is a good solution for those investors with this problem.

Prior to signing any agreements, the investor who got trapped in the covered bonds, needs to consider some important issues:

Firstly, he should check all the details of the offer, read all the clauses and seek advice from a professional to avoid being caught in trouble again, and finally compare the options available. Obviously, Banks usually look for themselves and therefore the agreement may not be as attractive for the investor.  The investor should ask for copies of the offer and the contract, take them home and read them carefully.

Of course, most foreign investors will struggle to understand the language and the terminology. It is therefore advisable to seek professional advice from a qualified Spanish lawyer or Economist. If in the end, the investor opts for this agreement with his Spanish bank and he is living in the UK, he will be able to grant power of attorney to either the bank or someone he trusts to sign the necessary paperwork in Spain. As mentioned in previous posts, a power of attorney can be signed in this country without the need to travel to Spain and this could prove helpful to those who do not want to use their holidays just to sign an agreement.

As always, it is better to be safe than sorry so don’t rush into agreements or products until you are entirely sure of what you are signing.

Photograph from www.dreamstime.com

 

Fire in the Costa del Sol- How do I claim for losses and damages?

You may have heard about the terrible fire that affected the Costa del Sol last week. The fire started on August 30th at 7 pm somewhere between Coin and Mijas (Barranco Blanco area) and it spread towards other towns such as Marbella, Ojen, Monda.  The fire stretched out with a length of over 30 km among five municipalities: Alhaurín el Grande, Mijas, Coín, Ojén and Marbella. At least 5,000 people were evacuated and the body of a German national was found near Ojen.   

The impact for the local flora and fauna, tourism and economy are difficult to predict at this stage. Now, in the aftermath, many affected people are wondering who is going to compensate them for the losses and damages suffered. According to “diario sur”, a local newspaper, the “Consorcio de Compensacion de seguros”, some sort of a Compensation fund that is funded by all insurance companies, will not compensate for any losses or damages. This means that any affected person will have to check his home insurance and see if this covers forestal fires. They will have to negotiate with their insurers and for those without any insurance their only hope will be that the Government declares the area as a catastrophic area, in which case there would be some compensations. However, in the current economic crisis, this option is not looking very feasible.

Those who live in Spain can visit one of the call centres that have been opened in Marbella, Mijas, Coin, Ojen and Alhaurin el Grande where they will be able to get some guidance with regards to their rights for a potential compensation. Those who have properties in the affected areas but live in the UK should ascertain whether their properties have been affected and if they have, they should check their home insurances in order to speak with their insurers.

I would not be surprised if some insurers adopt a negative approach to claims. However, the affected parties should not take a no for an answer and should consider seeking independent legal advice if in doubt.

I hope to be able to post more information on any developments shortly.

This article has been written in collaboration with www.spanish-lawyers.org

The photograph is provided by www.dreamstime.com

 

 

 

 

 

What can be bought these days for less than 150,000 Euro?

 

 

This is a question that I have asked myself in several occasions. I am obviously talking about Spain, the main subject of this blog.

Some experts state that the market is full of bargains. Lets see if it is true.

150,000 Euro is a relevant amount of money. This amount can buy you a very decent house in certain parts of Spain. However, this may not prove sufficient for the main cities. For instance, in accordance to our research this amount would prove insufficient in cities such as Guipuzcoa or Vizcaya. The picture is different in cities such as Alicante or Almeria and their surrounding areas where the stock of properties is larger. In those areas, 150,000 Euro could buy you a very decent house in a good area. However, punters need to be aware that most experts think that property prices will continue to fall for at least another 1 or 2 years. If you are buying the property as an investment you may see that the value of your property falls down, although it should not be as accute as for those who bought from 2005 to 2007.

Statistics show that there is a better demand for properties that are worth less than 150,000 Euro as these are the type of  properties that Spaniards can afford these days. These properties can also be let for an affordable rent that will hopefully cover the investor’s mortgage. As many know by now, committ to a very high mortgage and the rent will never cover the monthly instalments. On the other hand, if your mortgage is affordable, within the 400 to 800 euro range, you may have a chance to cover the mortgage with the rent.

The last trend in Spain is to buy from banks as they have a good portfolio of repossesed properties and in many occasions will die to give you a mortgage (and therefore get rid of a property that is affecting its balances account wise). However, not all banks have been realistic with their pricing and a good amount of their properties are still overpriced for the current times.

As Manuel Luque used to say in a very famous tv advert in 80’s Spain: Search, compare and if you find something better..buy it. 30 years down the line and still a very wise saying.

Attention please! Spanish Consular Services- Part II

This week I wrote a post explaining the counties that belong to the jurisdiction of the Spanish Consulate in Edinburgh. Somehow, the blog does not show the entire list so I now take the opportunity to provide the list in a more direct format.

To summarise what I was saying in my previous post, the Spanish Consulate in Manchester is no longer operative. If you live in one of the areas below you will now depend on the Consulate in Edinburgh, specially if you are Spanish or require something from the Spanish Consulate.

Cheshire, Cleveland, Cumbria, Durham, Lancashire, Greater Manchester, Merseyside, North Yorkshire, Northumberland, Tyne and Wear, West Yorkshire and Northern Ireland.

I hope this time it can bee seen properly on the blog! If not, drop me an email and I will be happy to provide further information.