Returning the keys to the bank after the death of a relative

One of the first phrases that I learnt when I moved to the UK to work as a Spanish lawyer was “catch 22”. At the beginning I did not have a clue as to what it meant (‘a paradoxical situation from which an individual cannot escape because of contradictory rules or limitations’ says Wikipedia) but once I learnt its meaning, I then started to use it in situations like the one I am about to describe.

What happens when a relative dies with a property in Spain with no equity? Imagine that uncle Vernie died while he was a resident in Spain. He had a property in Spain with a mortgage and a few thousand euro in the bank. Due to the property crisis, the asset is worth less than the mortgage and we are uncle Vernie’s next of kin. As we are not interested in the property, we would like to transfer this back to the bank and clear the debt, so we can inherit the money that is in the bank. So far, so good but in Spain, the beneficiaries cannot transfer the deceased´s property back to the bank without having accepted the estate first and registered the property in their names. Furthermore, the costs of the administration of the Spanish estate are quite high and very often could involve thousands of Euro. On the other hand, if we do nothing the bank will probably take legal action against us because the mortgage is unpaid and will try to force us to either accept or reject the estate.

What options do you have:

  • You can renounce to the Spanish estate, although this has to be done properly through a Notarial deed. Also, in certain occasions it could lead to the estate passing to your children, which is something that we will not want. Legal advice should be sought before taking this route.
  • Speak with the bank and negotiate a solution. In certain cases, the Spanish bank will be prepared to cover part of the costs if there is an intention to transfer the property back to the bank
  • Accept the estate, register the property in your name, paying the mortgage every month and then eventually sell the property when the property market recovers and there is equity again
  • Do nothing, which is not advisable as this matter can then become a “Damocles sword” pending on your heads for years to come.

These are more or less the options available in cases like the one above. Very often, having a lawyer will help as he or she will be able to speak with the bank and advise you on your options, costs and tax implications.

As you can see, the supposed “catch 22” situation can become a happy fairy tale if you take the right actions to overcome the problem.

Happy new year!










It happens sometimes that hiring certain kind of services is easier than getting rid of them. An original idea could become a burden and we may struggle to get rid of the facilities that have made our life happier and more comfortable in the past. This situation is closely related to the well-known  timeshares.

They were usually introduced as a safe and affordable way to enjoy our holidays in a wonderful and sunny place full of amenities with the sole obligation, apart from the initial payment of the price, to pay an annual fee for covering the maintenance.

Unfortunately, all good things come to an end and those timeshare rights ceased to be an asset and became a hindrance. These days most people want to get rid of their timeshares and would even pay to dispose of these. In those cases, the most advisable thing is to dust off the title deeds and study this in order to see if there is a way out.

Whether we are talking of a timeshare or a vacation club, the potential scenarios that we can face are the following:

-No title deeds but a proper private contract

This is the rare case where the buyer bought a timeshare in a properly executed private contract but this contract was never formalised into a Deed. In this case, there are different alternatives. The first one is to formalise the contract into a proper Deed. This will involve Notary fees, stamp duty and Land registry fees but at least it will allow us to have a proper Deed and perhaps increase our chances of transferring this legally to an interested buyer. Another option is to leave things as they are and wait until the timeshare expires (usually 50 years).

-Proper title deeds

In this option we can include the cases where the buyer bought a timeshare and formalised the appropriate title deed. The buyer has proper title and is entitled to sell the timeshare. However, the main problem is that no one is interested in buying the timeshare except perhaps for the owner of the property or the company that manages the timeshare. We have recently seen an increase in enquiries from clients who have been approached by the Management agents with offers to acquire the timeshare from them for free. In most of those cases, the client needs to pay for all l the expenses of the transfer but he is happy to do it as this could involve getting rid of the timeshare.


In those cases, the management agents request a very wide power of attorney that would enable them to transfer the timeshare to themselves. We are not comfortable with clients signing this type of powers of attorney but clients sometimes prefer to take the risk and go ahead with the power of attorney in the hope that their obligations will cease. As indicated, we would recommend tailoring the power of attorney to the specific timeshare but we are aware that some timeshare owners have opted for wide powers of attorney due to pure desperation and we hope that no adverse consequences will arise.

-A contract that does not comply with the law. (see the post “everything you wanted to know about timeshares , but were afraid to ask” which was posted in this blog in ………. 2011).

In this type of cases, the buyer has a contract but this contract has many irregularities, some of them so relevant that they may deem the contract null. These contracts can probably be terminated on the basis that they have irregularities and do not comply with former and existent laws.

In our daily practice we have seen it all: proper deeds, proper contracts with no deeds and dubious contracts. Clients are usually surprised when we tell them that a time share does not have to be for life and they always welcome the advice and the options we gave them with the arms open as few people are now interested in keeping their timeshares and prefer to get rid of them. If you are one of them, feel free to give us a call and we will see if we can help you.