Spanish Honorary Consulate office in Manchester

Office Map

 

 

 

 

 

The Spanish Consulate in Manchester closed more than 2 years ago. Since then, all consular matters for the North West were transferred to the Spanish General Consulate in Edinburgh. Very recently an Honorary Consular office has been opened in Manchester and located in our Manchester office. The Honorary Consul is Antonio Guillen, writer of this blog, a dual qualified Spanish lawyer and English Solicitor at DWF LLP in Manchester. Antonio will cover the regions of Greater Manchester, West Yorkshire and North Yorkshire.

The functions of an Honorary Consul vary depending on the Country. When it comes to Spain and the Honorary Consulate in Manchester, the functions are restricted to giving support to both Spanish and UK nationals in those matters where the Spanish Consulate in Edinburgh requires assistance. Some of those functions are the following:

– Dealing with passport applications for Spanish nationals who are less than 12 years old

– Eventual support to Spanish nationals that require urgent assistance in this area of the country (subject to permission from the General Consulate in Edinburgh)

– NIE application forms for those cases where the applicant cannot travel to Edinburgh

– And in very specific cases, certificates and consular documents

The Spanish Honorary Consulate in Manchester cannot prepare Spanish powers of attorneys, wills or deeds but the firm where the Consulate is based can provide this service. Alternatively, those who need one of the 3 things quoted above can travel to the Spanish Consulate in Edinburgh where this service can be provided or fly to Spain and get the said documents done by a Notary Public.

For further information on Consular matters please contact Spanishconsul@dwf.co.uk

For further information on Spanish legal matters please contact antonio.guillen@dwf.co.uk

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.

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

 

 

 

 

 

Spanish Consulate in Edinburgh- Powers of attorney

 

 

 

 

 

 

I have received several phone calls in the last few weeks asking me whether it would be possible to sign a power of attorney at the Spanish Consulate in Edinburgh.

My understanding is that a new Consul will arrive shortly, probably in the next two weeks. Until such time, the Spanish Consulate in Edinburgh will not be able to deal with powers of attorney. The rest of the consular services will not be affected but those who need to sign an urgent power of attorney will have to either fly to Spain or contact one of the law firms recommended by the Spanish Consulate (this firm being one of them) and sign the power of attorney in the UK.

In any event, it seems like a temporary situation and the Spanish Consulate in Edinburgh should be able to resume its notarial services very shortly.

If you live in the North of England or in Scotland, do not travel to the Spanish Consulate in London without having spoken with them first. London is not obliged to take any requests from UK nationals who live outside their Consular jurisdiction so do not travel to the said Consulate unless you have spoken to London first and confirmed that they will be happy to see you for the signature of a notarial document.

London is a wonderful city, worth to visit a hundred times, but there is no point in spending several hours in the train when you may not get what you wanted.

 Photo from www.freefoto.com

Catalonia to boost legal confidence in real estate

 

 

 

 

 

The Catalan Regional Government announced yesterday a new initiative to improve legal confidence in real estate. The initiative is mainly thought for foreigners who may buy properties in the coast. Although the specific measures have not been decided yet, it is important to improve protection to avoid the legal problems that we have all seen in the past.  

There is an important reason to make the region attractive for potential purchasers and that is the huge stock of new housing that Spain accumulates since the beginning of the economic crisis. The building industry is almost collapsed and unemployment is the main worrying for Spanish population. The Mediterranean coast is full of new apartments and bungalows waiting to be sold. The local incomes have decreased and tourism continues to be a reliable economic sector.

Catalonia might be the first region inSpain developing a quality brand on the properties in the region. I am not sure how the Catalan Government will manage to implement it and more importantly how it will manage to keep a quality control over the sale of properties around the area but it is an interesting initiative that may boost confidence in the purchase of properties in that specific region. However, these measures may not be sufficient if the properties in Catalonia do not reduce their prices. There are wonderful places in Catalonia but some of them are not affordable to the average foreign purchaser. A combination of quality controls and more affordable prices could make Catalonia the new place to invest.

Photograph by Rafael Laguillo  www.dreamstime.com

 

Here we go again

 

 

 

I am a usual reader of the news bulletin from Idealista.com. I like it because it comes every Friday with a summary of the most relevants news in respect of the property market. The interesting thing about this news bulletin is that it does not have any alliances and you can easily see a story talking about the improvement of the property market in Spain together with another story which is less optimistic about the same point.

This week I have noted with interest that Santander Bank has decided to get rid of all its stock of properties by the end of the year, even if it implies making some losses. It appears that Santander has organised a bid and is planning to give the properties for sale to one of the major players in the Real Estate market. Companies such as Knight Frank, Aguirre Newman and Richard Ellis will probably bid for getting the portfolio.

I am interested to see the prices of the properties. The current trend is that properties put for sale by banks are usually more expensive than those sold by developers. However, it must be said that at the same time they usually come with better mortgage offers. If Santander wants to get rid of the around 29,000 properties it has, then it better start crashing the prices because it is very quiet out there. Furthermore, it also better start softening its current mortgage criteria. Otherwise, with the current mortgage criteria which is tough across most of the Spanish banks, most of the interested purchasers will fail to get a mortgage.

Hopefully, other banks will follow this trend and this will help to reduce the current stock of properties which is affecting the recovery of the market. For those who are considering to buy a property from a bank do not forget to instruct an independent lawyer to check the legals. The fact that the property belongs to a bank does not necessarily mean that it has all the papers in place.

To summarise, great idea. This is exactly what Spain needs: bold initiatives to awake a dormant market from its letargy. But, will it work?

 

Wills, wills, wills…

As one of the few Spanish lawyers living and practising in this country, I often come across international probate matters where the deceased had assets both in Spain and in the UK. In certain occasions, the deceased is a Spanish national who moved to the UK for work and ended up owning assets in this country but in the majority of cases the situation is the reverse; a British person moved to Spain (seeking sun and more gentle weather) and kept assets in both countries.

When the said person dies there is a probate procedure to be dealt in Spain but also in the UK. If there is a will for each country then great but quite often this is not the case and conflicts of international law start to arise. Last week I saw a case where an English national who died in Spain had a Spanish will, which was only applicable to the Spanish estate, but no English will at all. The Spanish will could not be applied to the UK assets as it clearly stated that it was solely restricted to Spain and therefore a partial intestacy procedure needs to be started in the UK in order to get what is called letters of administration.

The above scenario reminds me how convenient is to seek the advice of a professional who is qualified to deal with both jurisdictions or if this not possible, at least try to get separate advice from a Spanish lawyer and UK solicitor and, hopefully, get them to work together in order to ensure that both wills are in accordance and do not create any unnecessary problems in the future. In my opinion, many problems take place because there is no communication between the two different lawyers or because the wills are signed at different times and places. This can be avoided by appointing a law firm with solicitors of both jurisdictions or by simply asking the lawyers, if they are based in different countries, to liaise and work together.

As we say in Spain”más vale prevenir que curar” which means something like “it is better to be safe than sorry”.

More next week.

Photograph from www.dreamstime.com

 

To value or not to value? That is the question.

 

The other day a client was in the process of filing an Inheritance tax form and he asked me which value he had to give to a Spanish property he had just inherited. In England the answer is quite simple: you must use the open market value. This generally means getting the property valued. In Spain the situation is, as usual, quite different.

Spanish law states that it should be the “real value” but there is no clear definition as to what the real value is. There is some guidance as to what could be understood as “real value”. For instance, the price shown on the deeds when the property was purchased or the value used by the tax office the last time the property was assessed by the tax man. However, the most common practice is to use the fiscal value. This is obtained applying a specific multiple to the rateable value of the property, which is usually shown on the annual property tax receipt.  

In the end, what happens in most of the cases is that the beneficiaries give the values that they consider appropriate and then these values are assessed by the Tax office. If the Tax office believes that the property is worth more, the Tax office will issue a tax request for the difference and any interest accrued.

In my opinion, it is advisable to use the market value and ensure that this value is definitely higher than the fiscal value. However, each case needs to be looked separately as there could be many factors affecting the final decision i.e. was the property  purchased a few years before the death? is there an intention to sell the property in the short future, etc.

What is clear is that if you are an executor of the estate, both English and Spanish, then the best way to proceed is to get the property properly valued and use that value for tax purposes, both in England and Spain. Otherwise, there could be some personal liabilities for the executor.

Picture by www.dreamstime.com

To be, or not to be, that is the question:
Whether ’tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take arms against a sea of troubles,
And by opposing end them? To die, to sleep,
No more; and by a sleep to say we end
The heart-ache, and the thousand natural shocks
That flesh is heir to: ’tis a consummation
Devoutly to be wished. To die, to sleep;
To sleep, perchance to dream – ay, there’s the rub:
For in that sleep of death what dreams may come,
When we have shuffled off this mortal coil,
Must give us pause – there’s the respect
That makes calamity of so long life.
Hamlet by William Shakespeare

 Amazing monologue of the genius William Shakespeare. By the way, who do you think has best incarnated Hamlet on the silver screen? Many generations think of Laurence Olivier.  Personally, I really enjoyed Kenneth Brannagh’s take on Hamlet

Mistakes made when granting a Spanish will- Part I

As some of the readers of this blog are aware, I am a Spanish lawyer based in Manchester, UK. Most of my clients are British with interests or assets in Spain.  I think I have lost track of the number of Spanish wills I have drafted in the last 7 years since I came to the UK. I would say that the total number is getting close to 100.

In many occasions, clients ask for guidance on the tax side. You cannot do many miracles with Spanish wills as there is no nil rate band in Spain and Trusts are not recognised by the Spanish legal system but you can still manage to minimise your client’s tax liabilities if the will is properly drafted. However, in many occasions some clients are reluctant to listen to your advice and end up signing the will as they please. This is absolutely fine with me. It is their right in the end and their wishes you should always be respected. However, as a lawyer you always feel that the decision taken may not be the most appropriate from a legal or tax point of view. This is why I take the opportunity to write about some of the most common mistakes that I have seen when drafting Spanish wills.

The first and perhaps most important is the usual misconception that the surviving spouse is Spanish Inheritance Tax exempt. Many English clients extrapolate the situation in England, where the spouses do not pay tax, to Spain, thinking that the surviving spouse will not pay Inheritance Tax and then leaving the property on the second death to the children. This is a big mistake because the surviving spouse does pay Inheritance tax in Spain. In fact, the surviving spouse only benefits from an allowance of €15,956.87. Then on the death of the surviving spouse, the children or whoever inherits the assets will pay inheritance tax again.

A good way to avoid the above is setting up a usufruct-or life interest- for the surviving spouse. This means that the surviving spouse will inherit the right to use the asset and no one will be able to sell it without his/her consent. At the same time, the inheritance tax to be paid by the spouse will be much lower than the tax that would be paid should he/she inherit the asset in the first place. This system also allows the final beneficiaries, usually the children, to inherit the asset in stages and space their tax liability.

Another option, although this should only be used when there is a good relationship between the different members of the family, is to leave the asset directly to the children. This is quite useful in those cases where a couple with children own a property in equal shares. The spouses can leave their share directly to the children on the understanding that the surviving spouse already owns 50% and therefore the children will respect the parent’s right to use the property. This option should never be used when problems can be expected from some of the beneficiaries, ie. one of them is willing to sell the asset or by no means should be used when the children are not the issue of the surviving spouse.

I realise that I have written too much. It is easy to extend your posts when you are enjoying the subject but I do not want the posts to be long and boring comments on the wonders of Spanish wills. I will therefore continue this topic on my next post. That will be next week.

Photograph supplied by www.freefoto.com

 

To let or not to let? A brief summary on the 1st year of the Spanish Express Eviction law

In December 2009, a new law, commonly known as “Express Eviction law” was put into place in Spain. The purpose of this law was to speed the tediously slow eviction procedure in Spain. The law was welcomed with many “hoorays” by residential landlords who were suffering the consequences of a slow eviction procedure. The truth is that the law was launched with the idea of protecting landlords against tenants well versed in the intricacies of the Spanish judicial system and more importantly to promote the rental of thousands of unoccupied properties that their owners, including developers, were afraid to let in case dodgy tenants settle their nest for more than a year, which is incidentally the average time that used to take to get rid of them.

A year has passed since the law was enacted and I must say that the balance is not very positive. The main reason is the current collapse of the Spanish Courts which are still inundated with a high volume of claims and lawsuits. It is true that the timescales for the initial hearings have been noticeably shortened and it now takes less than before to have your cause heard by the local Judge. However, the eviction procedure is still taking an average of 3 months to take place and this counter-balances any gains experienced with the speed of the first stage of the procedure. The conclusion is that Spanish landlords are still experiencing an average timescale of 7 months to evict the tenants. This has created the need to look for alternative solutions to minimise the impact that a defaulting tenant can create in someone’s finance. One of these measures is to submit the tenancy agreement to an Arbitrator. This clearly speeds the initial stages but there is still the need to go to the Court to enforce the decision if the tenant does not agree to leave once informed of the decision. Likewise, another solution is to protect the landlord from the losses suffered during the eviction procedure. The best way to do this is by signing an insurance policy that will cover up to more than 1 year rent as well as cover the legal fees.  This can prove a very advisable option for those who have mortgages to pay as the damages of an unoccupied property that is generating no income can be tremendous for the landlord.

If you are thinking about letting your Spanish property is always worth instructing a lawyer to draft a proper tenancy agreement and advice on the best ways to protect your situation. Do not let the estate agent draft the tenancy agreement as they are not qualified to advise on this type of matters and the damages can be much higher than if proper advice was obtained.