Get the right information on bank fees before signing your mortgage loan
Learn more: Bank fees on a mortgage loan
I. INTRODUCTION
II. PRINCIPLES:
- Supervised freedom of covenants.
- Linkage with services requested and accepted by the customer.
- Correspondence with services actually rendered.
- Transparency and publicity.
III. CLASSES OR TYPES:
- Opening/Study.
- Claim of unpaid debts.
- Early redemption.
- Novation.
- Change of creditor.
- Subrogation of debtor.
- Issuance of a zero balance certificate to pay off the mortgage.
Introduction
This article aims to explain in depth the possible bank fees that appear in a mortgage loan contract formalized before a notary.
In order to understand what a commission is and what its function is in the framework of banking relations between credit institutions and consumers, it is necessary, in my opinion, to start from the definition offered by the fifth meaning of the Dictionary of the Royal Academy of the Spanish Language, which establishes that commission is understood as the "percentage received by an agent on the proceeds of a sale or business".
Thus, based on this definition, it can be understood that, within the framework of banking relations between banks and their customers, commissions are the consideration paid by consumers and users to banks in return for the services and instruments provided by them.
On this basis, i.e., that commissions are a price received by the banking entity when performing an activity or rendering a service in favor of its client, we cannot ignore that such consideration, as it derives from an act of free and voluntary contracting by both parties, shall be subject to the universal principle of freedom of agreements enshrined in our legal system in article 1255 of the Civil Code, which establishes that:
"The contracting parties may establish such covenants, clauses and conditions as they deem convenient, provided that they are not contrary to the laws, morality or public order".
This undeniable reality has been expressly included in Article 3 of Order EHA/2899/2011, of October 28, on transparency and customer protection in banking services, in which the Ministry of Economy and Finance, protected by the powers granted to it by Art. 149 of the Constitution (which attributes to the State the exclusive competence in matters of "regulation of credit, banking and insurance"), as well as art. 97 of the same Magna Carta, which reserves to the Government the exercise of the "regulatory power", establishes the general bases of the system of commissions in the banking field:
"The commissions received for services rendered by credit institutions shall be those freely fixed between said institutions and the customers".
Thus, as mentioned above, bank fees are the result of a free and voluntary agreement between the parties that agree on them, i.e. between the customer and the credit institution.
In view of this reality, the legislator, in the first place, and subsequently the executive, over many years have tried to develop a set of regulations that try to limit the power of negotiation and imposition of excessive or abusive conditions by the financial sector in order to protect the banking customer, who is in the weakest position in the contractual relationship established between the two.
Finally, as far as the regulations are concerned, bearing in mind that the purpose of this article is to analyze the commissions that may accrue in the field of real estate credit, it is time to highlight the regulations governing this specific matter, which has recently undergone a real revolution with the entry into force of Law 5/2019, of March 15, regulating real estate credit agreements, as well as its implementing regulations, including Royal Decree 309/2019, of April 26, Order ECE/482/2019, of April 26, as well as the Instructions or Resolutions of the General Directorate of Registries and Notaries that have already begun to be issued in this area.
Principles
Once the general bases of the system of bank commissions in our legal system have been established, we must take into account which ones must comply with the principles of:
Classes or types
After this general introduction, which I believe is more than necessary, I will analyze each commission separately in a practical way. And I will do so in the logical order following the normal chronology in the life of a mortgage loan, starting from its contracting to its formal cancellation.
Opening/study commission
[Let's start with a definition...]...
The origination fee can be defined as the fee charged by the financial institution to the client for all the administrative and management expenses derived from the formalization and granting of a loan or credit, such as, for example, the request and compilation of the documentation necessary to carry out the operation, the analysis of the debtor's solvency, the preparation of the loan contract, etc. This commission has traditionally been a certain amount (for example, €1,000) or, on the contrary, a percentage of the amount borrowed (0.5% of the amount of the loan granted).
[What the Bank of Spain says about it...].
From a regulatory point of view, it seems interesting to rescue the definition of this fee offered by Bank of Spain Circular 5/1994, of July 22, 1994, to credit institutions, which established that the origination fee "shall include any expenses for the study, granting or processing of the mortgage loan or other similar expenses inherent to the activity of the lending institution caused by the granting of the loan". Therefore, the Bank of Spain understands that this fee, provided that it complies with the principles set out in the introduction, is perfectly valid.
[The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...].
In relation to the arrangement or study commission, it is necessary to indicate that, to date, it has generated some litigation in the courts, as there have been many lawsuits in which the lawfulness and appropriateness of this commission has been raised, and there have been disparate court rulings. However, this issue has been settled by the Supreme Court in its recent judgment 44/2019, of January 23, in which, resolving an appeal in cassation, the High Court confirms the lawfulness of this clause and, therefore, rules out its abusive nature. To do so, the Supreme Court develops the following arguments:
- In the first place, the Supreme Court understands that the arrangement fee has a true remunerative character, since in the opinion of the court "the fee is not an item outside the price of the loan; on the contrary, the remunerative interest and the arrangement fee constitute the two main items of the loan".
- That said, the Supreme Court understands that, when a loan is granted, beyond the provision of the money to the borrower, the financial institution performs a "series of activities" in the "initial stage of the loan", that is, "its preparation and granting", which include activities such as "the study of the application and related formalities, collection and analysis of information on the applicant's solvency and ability to repay the loan throughout its duration, evaluation of the guarantees provided, preparation of the contract and its execution". In view of the above, it seems entirely reasonable that the financial institution could charge for these activities, as permitted by the regulations in force at the time.
[News from Europe (CJEU) is expected in this regard...].
Without prejudice to the favorable opinion of the Supreme Court that has just been stated, it is necessary to indicate that certain Courts of First Instance, dissenting from the opinion expressed by the High Court, consider that the arrangement fee may constitute a real unfair term for consumers in the light of the European Union regulations on this matter.
Thus, bodies such as Court of First Instance No. 17 of Palma de Mallorca have recently referred the question to the Court of Justice of the European Union for a preliminary ruling on the possible unfairness of this clause, in the light of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts. This procedure, in any case, is at an initial stage of its processing, so that it will be necessary to closely follow the course of this preliminary question in order to determine the relevance that it may have in the Spanish mortgage market.
[Does it currently have legal coverage?]
At this point, it is undoubtedly necessary to refer to the novelties introduced by the recent Law 5/2019, of March 15, regulating real estate credit agreements, in which the Spanish legislator, in order to materialize the transposition of a European Union Directive and to increase the guarantees for the protection of consumers and users in the real estate credit market, establishes in Article 14.4 of the aforementioned Law "if an origination fee is agreed upon, it will accrue only once and will include all the costs of the study, processing or granting of the loan and other similar costs inherent to the activity of the lender caused by the granting of the loan".
On this precept it is important to highlight, in addition:
- "In the case of loans denominated in foreign currency, the origination fee shall also include any currency exchange fee corresponding to the initial disbursement of the loan."
- The provisions of this law have (ex. art. 3 of the aforementioned body of law), an unrenounceable or mandatory nature, so that the contracting parties may not dispose of or alter the limitations expressed therein, under penalty of nullity of full nullity, in accordance with the provisions of article 6 of the Civil Code.
- There is freedom to set the amount of the commission, as it does not set a maximum limit as with other commissions (as we will see below).
- It is expressly stated that the study fee is included in the arrangement fee. Therefore, both fees cannot be charged separately, but must be merged into a single fee.
Commission for claiming unpaid debts
[Let's start with a definition...].
Sometimes it may happen that the borrower/debtor, as a result of economic difficulties, is unable to pay one or more consecutive installments of his loan, so that they become unpaid and, in this case, the bank customer is placed in a position of default.
The commission for claiming unpaid debts or debtor positions can be defined as the commission charged by the financial institution to its debtor client for the management carried out in order to collect the amounts due and pending as a consequence of the payment default.
In these cases, as is to be expected, the lending financial institutions have designed a series of circuits and mechanisms to contact the debtor and demand payment of the outstanding amounts as soon as the first installment is unpaid, in order to ensure compliance with the contracted obligation. Thus, as an example of this type of mechanism, we can include sending postal communications, telephone calls, visits to the customer's manager to explain the situation, etc.
[What the Bank of Spain says about it...].
As regards the lawfulness and appropriateness of this fee, it is necessary to recall once again the general principles on banking fees enshrined in Article 3 of Order EHA/2899/2011, of October 28, on transparency and customer protection of banking services already mentioned in this section, namely, firstly, that the fees are freely agreed between the parties and, in addition, that they correspond to services actually rendered or expenses incurred.
Consequently, as can be deduced, the commission for claiming unpaid bills of exchange is perfectly licit and admissible, as long as it complies with a series of characteristics and requirements that the banking supervisor has very aptly summarized in its 2009 Annual Report of the Claims Service, as follows:
- Its accrual will be linked to the effective existence of claim procedures carried out with the debtor customer, which must go beyond the simple periodic sending of a claim letter automatically generated by computer systems.
- It may only be charged on a single occasion when claiming the same balance, so that successive claims for that specific balance may not generate the charge of a new commission.
- As regards the nature of the fee, the Bank of Spain determines that it is a single amount, regardless of the amount of the balance claimed, so that the imposition of percentage fees linked to the amount unpaid is not admissible.
- It should also be pointed out that the Bank of Spain considers in its Annual Report that it is not good banking practice to automatically collect the same, but rather that the appropriateness of its accrual must be determined in each specific case in view of the particularities of the debtor and the default.
[The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...].
In relation to the legality of this clause, it is necessary to point out that, in the contentious area, its validity has been questioned in a multitude of legal proceedings, and its nullity has been declared by various courts of justice.
[News from Europe (CJEU) is expected in this regard...].
In relation to the legality of this commission in light of the resolutions of the CJEU, it is necessary to indicate that, unless there is an error, there is currently no judicial resolution of this body in which it has expressly ruled on this matter.
However, it is necessary to take into account that the case law of the CJEU on the protection of consumers and users has been and is regularly used by the national Courts of Justice to support their decisions in this area, as for example in the CJEU Order of 11 June 2015, which validates the control of unfairness of a clause, even if it has not been applied, or for example the well-known CJEU Judgment of 13 March 2013 (Aziz Case), which sets out the criteria to be taken into account to assess whether a contractual clause generates a "significant imbalance between the rights and obligations of the parties".
[Does it currently have legal coverage?]
That said, it is also necessary to refer to the provisions of the new Law 5/2019, of March 15, regulating real estate credit agreements, in which Article 14.1. b in which it is established that, upon formalizing the transaction, the financial entity must deliver to the borrower a Standardized Warnings Sheet (FIAE) which must include, among other matters, the appropriate references "to the possibility of the early maturity of the loan as a result of non-payment and the expenses arising therefrom", among which, in my opinion, it can be understood to include this commission, so that for it to be charged, the banking entity must have previously, clearly and adequately informed the mortgagor of the same.
Early redemption fee
[Let's start with a definition...]...
It may happen that the debtor, for whatever reasons, no longer needs to maintain the financing initially requested, so that before reaching the end of the agreed contract, the debtor decides to repay early all the outstanding debt. As can be seen, this will generate a loss for the financial institution, since it will no longer receive the interest on which it was initially counting, so that its forecast of income and expenses will be altered.
In order to prevent this alteration from generating a loss in the entity's income statement, beyond generating new credit operations with the principal amortized early, financial entities have opted to charge a fee for early amortization, in order to partially offset the loss of profit generated by the loss of interest that will no longer be charged as a result of such amortization.
Therefore, the early repayment fee can be defined as the fee charged by the financial institution to its debtor client for early repayment of the loan before the date initially agreed for the termination of the contract.
[What the Bank of Spain says about it...].
In relation to this matter, it is necessary to indicate that, as will be seen in the section on the legal coverage of this commission, it is regulated in great detail by the legislator, so that its legality and applicability in mortgage loan contracts does not present great difficulties or conflict, provided that it remains within the limits established in the regulations that will be explained.
In this regard, see the 2014 Complaints Report of the Market Conduct and Complaints Department of the Bank of Spain, which details that complaints from bank customers in relation to this commission basically occur when the financial institution applies commissions above the legally established limits, in which case it is clear that the claim is upheld, as well as in cases of lack of transparency in the wording of the clause, without this second case having generated a notable conflict in practice.
[The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...].
In relation to the commission for early amortization, it should be noted that this has not generated major controversies at the judicial level, so that, if it is kept within the legally established limits, which will be detailed below, it should not present major conflicts in the jurisdictional sphere. In this regard, see the Judgment of the Provincial Court of Alicante 3066/2016, of November 4, whose seventh legal basis states, in relation to the commission for early repayment, total or partial, which in that specific case was set at 1%, that "we do not consider such clauses to be abusive, since Order ENA/2899/2011 only prohibits commissions that do not correspond to services effectively rendered or expenses incurred and we are dealing with real services rendered by the bank to the borrowers, in such cases", since the early repayment also implies the performance of a series of actions by the bank that make the payment of the agreed commission appropriate.
[News from Europe (CJEU) is expected in this regard...].
At present, there is no record of a preliminary ruling question submitted to the CJEU in which the core of the legal controversy is focused on this commission. However, it is no less true that, as AGÜERO ORTIZ points out, the control of material transparency validated by the CJEU in its judgment of December 21, 2016, protected by Directive 93/13/EEC allows a control of the legality of any clause inserted in the contract, so that "if the consumer did not receive pre-contractual information on the costs of the product (including here this commission)[....] then the clause will also be unfair for lack of transparency", since it is necessary that the consumer can know, "before the subscription of the contract, all the economic and legal consequences of the contract".
[Does it have legal coverage?]
It is time to analyze its lawfulness and propriety in the light of the different regulations existing to date, since, as will be seen, the legislator, in order to protect the mortgagor from possible excessive charges by the banks for this concept, has enacted different rules over the last few years, the content of which must be known.
It will be necessary to distinguish three stages:
Mortgages formalized before December 9, 2007:
For mortgage loans entered into prior to December 9, 2007, the provisions of Law 2/1994, of March 30, 1994, on subrogation and modification of mortgage loans, whose first additional provision establishes that:
"In variable interest mortgage loans [...] the lending institution may not charge a non-subrogation early repayment fee of more than 1% of the principal to be repaid, even if a higher fee has been agreed".
That is to say, the commission for early repayment (if it is a variable interest loan) will be that which the parties have agreed, but taking into account that in no case may it exceed 1% of the capital that is repaid early. However, if it were a fixed rate loan, the provisions of this law would not apply, so that the amount of the commission would be determined by the agreement between the parties.
Mortgages formalized after December 9, 2007:
That said, for loan contracts with mortgage guarantee entered into as from December 9, 2007, date of entry into force of Law 41/2007, of December 7, which amends Law 2/1981, of March 25, on the Regulation of the Mortgage Market and other rules of the mortgage and financial system, on the regulation of reverse mortgages and dependency insurance and which establishes certain tax rules, the provisions of articles 7 and following of the aforementioned regulatory body will be applicable, which establish the following general rule:
"Provided that the mortgage loan or credit is for a dwelling and the borrower is a natural person, no commission may be charged for total or partial early repayment."
However, the legislator then establishes a "compensation" regime in favor of the creditor financial institutions:
- "Compensation for withdrawal": In which it is established that "in subrogation and non-subrogation cancellations, total or partial, that occur in mortgage credits or loans...the amount to be received by the creditor entity as compensation for withdrawal may not be higher:
- "Compensation for interest rate risk": this will only be applicable to loans indexed to a fixed rate or with a review period of more than one year, and its amount will be the amount agreed between the parties, and will accrue if and when a capital loss is generated for the creditor entity (for details on the calculation of this loss, see art. 9.2 of the regulation in question).
Mortgages formalized on or after June 17, 2019:
Finally, it is necessary to take into account the new legal regime established by Law 5/2019 of March 15, 2019, regulating real estate credit agreements, which will apply to "loan agreements with mortgage guarantee entered into as of June 17, 2019, provided that they are loans granted by a professional in favor of an individual debtor for the purchase of real estate for residential use".
Article 23.4 of the aforementioned Law establishes the following distinction:
Likewise, it seems interesting to indicate that when the debtor deposits the funds necessary for the early repayment by means of a check in the financial entity, in accordance with the Specific Criteria of Good Banking Practices of the Bank of Spain, a commission will not be charged for the deposit of such check, since "it cannot be considered as a credit to a current account", since the entity "does not perform any clearing service to its customer, but rather provides this service to itself or in its own interest".
Commission for novation or modification
[Let's start with a definition...]...
As is commonly known, the Spanish mortgage sector is characterized, among other things, by the widespread marketing of very long-term mortgage loans and credits, with the most common mortgages to be paid in monthly installments of 25, 30, 35 or even 40 years. This reality of the Spanish mortgage market determines that, on certain occasions, in the face of unexpected changes in the economic situation or capacity of debtors, normally towards more precarious situations (unemployment, for example), the need arises for them to modify the conditions of their mortgage loan, for example by extending the repayment period (in order to reduce the monthly payments), modifying the interest rate or even increasing the capital owed in order to meet new economic needs.
In view of this, the initial mortgage loan contract is modified, so that the need arises to reflect the new conditions agreed upon, which may give rise to the charging of fees for novation or modification, which, again, will be determined by the amount agreed upon by the parties. Therefore, the fee for novation of conditions can be defined as the fee charged by the financial institution to its debtor client for modifying the conditions initially agreed in the loan or mortgage credit contract formalized before a notary public.
To give the reader a rough idea of this, it can affect issues as varied as, for example:
[What the Bank of Spain says about it...].
From the point of view of the banking supervisor, reference should be made to the 2008 Report of the Complaints Service, in which, based on the acceptance of this commission as valid, a series of clarifications are made regarding complaints received by this service.
In this sense, the reader must take into account that such modifying novation can be instrumented both in a public document and in a private document, but in the latter case the modification, not having access to the Land Registry, will not be enforceable against third parties, without prejudice to the fact that under the protection of article 1279 of the Civil Code, any of the parties may compel the other party to grant the corresponding deed.
Therefore, in these cases, whether the document is private or public, the Bank of Spain accepts the collection of this type of commissions as long as they have been agreed and remain within the margins required by law.
[The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...].
In the jurisdictional sphere, there is not much litigation in relation to this commission, although it is necessary to refer to certain judicial resolutions that affect this issue, such as the tax sphere and the expenses that may be generated.
With regard to tax matters, it is necessary to indicate that Article 9 of Law 2/1994, of March 30, regulating the subrogation and modification of Mortgage Loans provides for an exemption from Stamp Duty for novation deeds that refer to "the conditions of the interest rate initially agreed or in force, the alteration of the term of the loan, or both", so that any other modification that affects another aspect of the loan must be subject to this tax.
Thus, the taxation (or not) of those deeds of novation in which not only the interest rate or term is modified, but also other modifications related to financial clauses are added. In these cases of multiple variations, does the exemption extend to the whole deed? This question has been resolved by the Supreme Court in its judgment 748/2019, of March 13, whose fifth legal basis states that "if the public deeds of novation of mortgage loans in which not only the conditions referring to the interest rate and/or the term of the loan are modified, but additionally other types of financial clauses..., the exemption will have to take into account the nature of the registration of the deed....it will be necessary to take into account the registrable nature of the modification and the economically assessable object of the same to determine whether or not it is subject to the AJD tax, extending the exemption of art. 9 of Law 2/1994, exclusively to the clauses relating to the interest of the loan, to the alteration of the term of the loan or to both". Having said this, as regards the taxable base, the Supreme Court determines that it is not the mortgage liability of the loan that must be taken into account, but the economic content of the financial clauses that are modified.
Likewise, as regards the notarial fee, it is necessary to refer to several rulings of the Supreme Court issued on January 23, 2019, in which it is determined that, in the cases of modification of the mortgage loan, as both parties are interested in it (financial institution and client), the notarial costs of the deed must be borne 50% by each of them.
Finally, in any case, I would not want to fail to make reference to the fact that any modifying novation affecting a clause null and void will also be affected by the effects of this nullity, without it being admissible to understand that the same has been validated, as stated by the Supreme Court in its judgment 558/2017, of October 16.
[News from Europe (CJEU) is expected in this regard...].
In relation to the decisions of the CJEU on this matter, it is relevant to refer to the preliminary question raised on July 11, 2018 by the Court of First Instance and Preliminary Investigation of Teruel (Case C-452/18), published in the Official Journal of the European Union of October 22, 2018, in which said court asks the CJEU a series of questions relating to the nullity of clauses contained in a contract of novation of a loan with mortgage guarantee. This case is still pending, but it will undoubtedly be very interesting to be attentive to its resolution by the CJEU to know the scope of its implications in the field of national law.
[Does it have legal coverage?]
For example, in Law 2/1994, of March 30, regulating the subrogation and modification of Mortgage Loans, it was foreseen that for this type of commissions, specifically in its article 10, which establishes that the amount of the same in certain cases and conditions:
"Modifying novations whose purpose is to extend the term of the loan, the lending institution may not charge a fee for modification of conditions of more than 0.10% of the outstanding amount of capital pending amortization".
Likewise, it is very relevant to bring up article 23.6 of Law 5/2019, of March 15, regulating real estate credit contracts, in which the legislator, clearly betting on favoring the conclusion of fixed rate mortgage loans, establishes that "in the case of novation of the applicable interest rate...provided that...it entails the application during the remaining term of the contract of a fixed interest rate in substitution of another variable one, the compensation...may not exceed the financial loss that the lender may suffer.... ". Likewise, the aforementioned precept additionally states that "after the first 3 years of the term of the loan contract, the lender may not demand any compensation or commission in the event of novation of the applicable interest rate...in which the application of a fixed interest rate is agreed upon, henceforth and for the rest of the life of the loan, for a fixed interestrate".
Finally, in this area it is very relevant to bear in mind the sixth additional provision of the aforementioned Law 5/2019, regarding the "cases of subrogation of debtor and modifying novation of the loan contract", since it states that "the provisions provided in this Law shall be applicable to the cases of....modifying novation of the loan contract", so that all the necessary legal regime of protection of the debtor, much more favorable to the interests of the latter, will be applicable in the preparation, signing and registration of the loan contract and of the corresponding real right of mortgage, which is undoubtedly a very relevant issue to be taken into account by the contracting parties.
On the other hand, when the novation affects aspects other than the term or interest rate, the commission agreed between the parties must be taken into account, provided that it complies with all the requirements of transparency and non-abusive nature, in accordance with the CJEU doctrine already set out in this paper.
COMMISSION FOR CHANGE OF CREDITOR
[Let's start with a definition...]...
It is becoming increasingly common for financial institutions to compete to attract customers when setting up the mortgage loan and through other financial institutions, offering them more advantageous economic conditions on their mortgage loan.
In view of the above, the Spanish legislator has recently carried out a legislative reform aimed at simplifying this procedure, so that individuals who so wish, if during the life of the mortgage loan they find another financial institution that offers them better conditions, can transfer their real estate loan to the latter. Logically, this transfer will cause a loss or reduction to the "originating" entity, which will be partly compensated by this commission for change of creditor, which explains its nature and raison d'être.
Therefore, the commission for change of creditor can be defined as the commission charged by the financial entity to its debtor client when it decides to "transfer" its mortgage loan to another financial entity, which offers better economic conditions.
[What the Bank of Spain says about it...].
The Bank of Spain considers that, as long as it remains within the thresholds permitted by law, the commission for change of creditor does not present any major conflict of interest. However, with regard to the change of creditor transaction itself, the Bank of Spain's Complaints Service has had the opportunity to express its opinion on this in its 2009 report, in which perhaps the most relevant aspects to be highlighted are the following:
- In order for the originating financial institution to be able to prevent the subrogation of the new institution (i.e., to retain the customer), it must improve "each and every one of the conditions contained in the binding offer, unless, there being both favorable and adverse conditions, all of them together are expressly accepted as more favorable by the borrower or debtor".
- As regards the time at which the new conditions of the enervation must be applied, in accordance with good banking practice, these must take effect "as soon as possible, without justified delay and, in any case, no later than the time at which the enervated subrogation would have taken effect, if it had taken place".
- Finally, in the event of a possible concurrence of creditors, in accordance with good banking practice, a situation should not arise in which the bank client is obliged to pay interest to two different financial institutions.
[The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...].
With regard to conflicts in the courts in relation to this commission, there are no relevant pronouncements on the matter, as long as the commission agreed and/or charged remains within the legal limits established by the legislator.
Having said this, as regards the procedure itself, the Supreme Court (ruling of November 25, 2003) confirms that the subrogation is automatically cancelled at the moment in which the initial creditor communicates bindingly and reliably, within the legal term, its willingness to novate the transaction under the same conditions offered by the entity that intends to subrogate.
[News from Europe (CJEU) is expected in this regard...].
No relevant pronouncements or pending proceedings have been found on this matter.
[Does it have legal coverage?]
This being the case, and once the procedure necessary to carry out the subrogation is known, it is now time to analyze the possible fees to be paid to the "initial" creditor entity that now loses the status of creditor due to the subrogation of the "new" creditor entity. For this purpose, it is necessary to recover the temporal distinction that has been made when analyzing the issue relating to early repayment fees, since depending on the time at which the loan agreement was entered into, the applicable regulations will vary. Namely:
Mortgages formalized prior to April 27, 2003:
For contracts entered into prior to April 27, 2003, the provisions of Law 2/1994, of March 30, 1994, on subrogation and modification of mortgage loans will be applicable , Article 3 of which establishes that "in subrogations occurring in mortgage loans, at variable interest rates (in the case of fixed interest rates, the terms agreed between the parties must be observed)...".... the amount to be received by the creditor entity as commission for the early repayment of its credit, will be calculated on the capital pending repayment, in accordance with the following rules:
- When early amortization has been agreed without setting a commission, there will be no right to receive any amount for this concept.
- If an early repayment commission equal to or less than 1% has been agreed, the commission to be received shall be that agreed.
Mortgages formalized between April 27, 2003 and December 8, 2007:
For such mortgage loan contracts, the provisions of the sole additional provision of Royal Decree-Law 2/2003, of April 25, 2003, on economic reform measures, which modifies the legal regime described above in Law 2/1994, will be applicable, establishing that, in relation to the early repayment fee:
- "When early amortization has been agreed without fixing a commission, there shall be no right to receive any amount for this concept.
- If an early redemption commission equal to or less than 0.50% has been agreed, the commission to be received shall be that agreed.
Mortgages formalized after December 9, 2007:
From this point on, the legal regime will be the same as that described above for early cancellation, i.e., that of early cancellation:
That said, for loan contracts with mortgage guarantee entered into as from December 9, 2007, date of entry into force of Law 41/2007, of December 7, which amends Law 2/1981, of March 25, on the Regulation of the Mortgage Market and other rules of the mortgage and financial system, on the regulation of reverse mortgages and dependency insurance and which establishes certain tax rules, the provisions of articles 7 and following of the aforementioned regulatory body will be applicable, which establish the following general rule:
"provided that the mortgage loan or credit is for a dwelling and the borrower is a natural person, no commission may be charged for total or partial early repayment".
However, the legislator then establishes a "compensation" regime in favor of the creditor financial institutions:
Mortgages formalized on or after June 17, 2019:
Finally, it is necessary to take into account the new legal regime established by Law 5/2019 of March 15, 2019, regulating real estate credit agreements, which will apply to "loan agreements with mortgage guarantee entered into as of June 17, 2019, provided that they are loans granted by a professional in favor of an individual debtor for the purchase of real estate for residential use".
Article 23.4 of the aforementioned Law establishes the following distinction:
Mortgages formalized as of June 17, 2019 with change from variable to fixed rate:
Furthermore, it is necessary to take into account that, in accordance with Article 23.6 of the aforementioned Law, "in the case of [...] subrogation of a third party in the creditor's rights [...] provided that [...] it entails the application during the remaining term of the contract of a fixed interest rate in substitution of a variable one, the compensation...may not exceed the financial loss that the lender may suffer, with a limit of 0.15% of the principal repaid in advance during the first 3 years of the loan contract term". Likewise, the aforementioned precept additionally states that "after the first 3 years during the term of the loan contract, the lender shall, in the event of no compensation or commission may be demanded in the event of [...] subrogation of a creditor in which it is agreed that a fixed interest rate will be applied from now on and for the rest of the life of the loan".
[Are there any additional specialties or issues to consider?]
As indicated above, the new Law 5/2019, of March 15, regulating real estate credit contracts, reforming the provisions of Law 2/1994 of March 30, which regulates the subrogation and modification of Mortgage Loans, has reformulated the mortgage subrogation procedure due to a change of creditor, trying to turn it into a more agile and dynamic procedure that contributes to the objectives described ut supra. Thus, in accordance with art. 2 of the aforementioned regulatory body:
"The debtor may subrogate to another financial entity...without the consent of the creditor entity, when in order to pay the debt he has borrowed the money from the former by public deed, stating his intention therein, in accordance with the provisions of article 1.211 of the Civil Code".
To this end, the new regulation has designed a procedure that is characterized by the following relevant milestones:
- First of all, "the entity willing to be subrogated will present the debtor with a binding offer containing the financial conditions of the new mortgage loan", after which, if the debtor accepts it, this "will imply his authorization for the offeror to notify the creditor entity and require it to issue, within a maximum period of seven calendar days, the certification of the amount of the debtor's debt for the mortgage loan to be subrogated".
- Once this procedure has been carried out, that is to say, once this certification has been delivered by the "initial" creditor entity, "during the following fifteen calendar days" said "initial" creditor entity "may offer the debtor a modification of the conditions of its loan in the terms it deems convenient", taking into account that during this period the subrogation may not be formalized.
- Once the fifteen-day period has elapsed without the debtor having formalized with the "initial" creditor entity the modifying novation of the mortgage loan or credit, then the subrogation deed may be executed, for which it will simply be "sufficient for the subrogated entity to declare in the same deed to have paid to the creditor the amount credited by the latter, for outstanding principal and interest and commission accrued and not paid", also stating that "in no case may the creditor entity refuse to receive the payment".
Commission for subrogation of debtor
[Let's start with a definition...]...
On certain occasions it may happen that a person acquires a property with a mortgage loan, and subsequently, prior to the ordinary maturity of the loan, decides to sell the property to another person who is interested in paying the entire price, part of it with his own funds/savings, the rest with bank financing, either with a new loan, or by taking over the payment of the mortgage loan already existing in the name of the seller.
Therefore, the debtor's subrogation fee can be defined as the fee charged by the financial institution to the new debtor, when accepting and consenting that the new debtor takes over the contractual position of the old debtor in the initial mortgage loan contract.
This type of commission usually occurs mostly in subrogations of developer loans, in which the real estate company that has built a new building has financed it through a financial institution, and once the homes are completed, it markets them with the possibility of subrogating the existing debt in order to facilitate financing to its buyers, so that the housing development can be sold more quickly and under more attractive conditions for potential buyers.
[What the Bank of Spain says about it...].
Regarding the lawfulness and appropriateness of this type of commissions, the Bank of Spain has not presented any significant impediments to this, as stated in the 2009 report of the Claims Service, which states that "entities may agree on a commission to be applied in cases of sale of the mortgaged property with assumption of the mortgage debt by the new purchaser, in which case the terms of the contract must be followed".
[The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...].
To a greater extent, in relation to this need for information in cases of subrogation of developer loan, it is very relevant to bring up the judgment of the Supreme Court No. 4092/2017, of November 24, in which it is stated that "a considerable part of the purchases of housing under construction or newly built is financed through the subrogation of the buyer in the mortgage loan granted to the developer, with modification, where appropriate, of some conditions", so that "if the financial institution were to be exempted from the requirement to provide the necessary information to ensure the transparency of the clauses that regulate the main object of the contract, the guarantee that the control of transparency implies for the fulfillment of the purposes of Directive 93/13/EEC and the national legislation that develops it would be deprived of effectiveness", so that the financial institutions must provide the new subrogating debtor with all the information of the contract in a clear and transparent manner, so that the perfection of the contracting will does not suffer any defect whatsoever.
[News from Europe (CJEU) is expected in this regard...].
No relevant pronouncements or pending proceedings have been found on this matter.
[Does it have legal coverage?]
Thus, with regard to the commission for change of debtor, it should be stated that it must comply with what the parties have agreed, in the terms already described of the accepted and consented commissions of Article 3 of Order EHA/2899/2011, logically as long as they correspond to services actually rendered and respond to a judgment of proportionality and adequacy in relation to these, under penalty of nullity for abusive nature in the event that a Court of Justice so declares.
Likewise, and in relation to these more common cases of subrogation of developer loans, it seems interesting to bring up again Order EHA/2899/2011 as well as Bank of Spain Circular 5/2012, which states that "in those cases in which the granting of loans to builders or real estate developers provides for a subsequent subrogation of the purchasers of the homes in the loan, the inclusion in the corresponding contract of the obligation of the said builders or developers to deliver to the customers personalized information on the service offered by the entity, contained in the article 19.3 of Order EHA/2899/2011.The inclusion in the corresponding contract of the obligation of the aforementioned builders or developers to provide the customers with personalized information on the service offered by the entity, as set forth in the contract, will not exempt the entity from ensuring, before accepting the aforementioned subrogation, through the appropriate procedures, that the customer is adequately informed on the characteristics of the loan".
Commission for issuance of zero balance certificate (to pay off the mortgage)
[Let's start with a definition...]...
As is well known, when a bank client signs a mortgage loan with a financial entity, in addition to entering into a loan contract, he/she constitutes a real right of mortgage on a property in favor of the lending financial entity, with said property guaranteeing the repayment of the money loaned, ordinary interest, late payment interest and other expenses. So that, in case it is not repaid, the bank has an asset with which to satisfy the debt. Having said this, it is not less certain that in most occasions, the mortgage loans are developed satisfactorily on the part of the debtors, so that, arrived at the end of the life of the same ones, all the quotas are satisfied and, therefore, the debt is liquidated and extinguished.
However, as it seems to be from my professional experience in serving the general public as a Notary Public, for most of the citizens, it is an unknown fact that, despite the fact that the loan in question has already been extinguished, the real right of mortgage registered in the Land Registry does not "disappear" automatically, but rather it is necessary to carry out a series of procedures, including the execution of a deed of cancellation of mortgage and its corresponding registration in the Land Registry.
It should be taken into account that these procedures are an essential step to lift the encumbrance on the property, which will allow it to be "free of encumbrances", a situation that is undoubtedly necessary to be able to sell the property without any impediment, since otherwise it will be difficult for any buyer to acquire a property on which there is a real right of mortgage without the certainty that the main obligation resulting from such encumbrance is already satisfied and, therefore, the same can be cancelled without any problems.
For this purpose, in order to be able to grant the corresponding mortgage cancellation deed, it is necessary that the financial entity in question:
- First, free to the mortgagor the so-called zero balance certificate, i.e., a document in which an authorized representative of the financial institution states that the principal obligation secured by the mortgage has already been satisfied and paid, so that the debtor no longer owes any amount in respect of that credit operation.
- Likewise, according to Article 82 of the Decree of February 8, 1946, approving the new official wording of the Mortgage Law, it will be necessary for an authorized representative of the financial institution to go to the notary's office and execute a mortgage cancellation deed consenting to the cancellation of the charge, which must subsequently be duly recorded in the Land Registry.
[What the Bank of Spain says about it...].
Thus, in recent times it has been seen how many financial institutions are charging high fees for these procedures, when from the applicable regulations and the recommendations of the banking supervisor, this should not be so, because as is clear from the 2016 Complaints Report of the Department of Market Conduct and Complaints of the Bank of Spain, financial institutions are required to "NOT" pass on any cost or commission to their customers for procedures such as:
- The delivery to the client of the documentation supporting the termination of the contractual obligation towards the entity (the issuance of a zero balance certificate ).
- The simple trip of the representative of the entity to the notary's office indicated by the client for this purpose, since, in these cases, the activity carried out is nothing more than the consent granted by the mortgagee (required by Article 82 of the Mortgage Law) for the cancellation of an inscription made in his favor by virtue of a public deed.
- The compilation of the documentation and background information related to the cancelled loan, together with the minutes of the deed of payment letter and mortgage cancellation.
[The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...] [The Courts of Justice have ruled on the same...].
In this regard, it is interesting to bring up the judgment of the Supreme Court of January 23, 2019 in which it is considered that, since the interested party in the release of the lien is the borrower, the costs of the notary fee must be borne by the borrower.
[News from Europe (CJEU) is expected in this regard...].
No relevant pronouncements or pending proceedings have been found on this matter.
[Does it have legal coverage?]
There are no regulations that expressly provide for and regulate this banking commission, so the general regulations on banking commissions must be followed.
However, in daily practice, all of these procedures:
They can be a costly and difficult workload for many people, so that financial institutions have developed circuits, in collaboration with agencies, to perform this task on behalf of the interested parties, upon payment of the agreed commission. In these cases, logically there will be no problem for the financial entities to charge their clients for carrying out this management.
However, it is necessary to insist again that this procedure through the financial entity (which has a cost) is not obligatory to carry it out through the same, but as it has been exposed, the debtor can choose to carry out all these steps by himself or to entrust it directly to the notary's office, law firm, or trusted third party.
December 2023
1.- RENUNCIATION OF INHERITANCE AND VULGAR SUBSTITUTION. IF THE TESTAMENTARY DESIGNATION TO THE SUBSTITUTES IS GENERIC ("CHILDREN" OR "DESCENDANTS"), WITH THE SIMPLE AFFIRMATION THAT THESE DO NOT EXIST, IT IS ENOUGH TO FORMALIZE THE RENUNCIATION AND SUBSEQUENT ADJUDICATION TO WHOM IT CORRESPONDS:
Attached (HERE) the Resolution of the DGSJFP of October 30, 2023 (BOE of November 22, 2023), where the DG resolves a case of an acceptance of inheritance of a woman, deceased widow, with two daughters, whom, in her will, she designated as heirs in equal parts, with vulgar substitution by their respective children or descendants. When the acceptance of the inheritance is formalized, one of the sisters renounces to the inheritance, and in the deed, the renouncing one simply states that she has no children or descendants (without proving it in any way), so that the other sister is awarded the whole inheritance. The Registrar denies the registration because he understands that the non-existence of children or descendants must be accredited (by notoriety deed or by any means valid in Law).
The authorizing Notary appealed the qualification and the DG, aligning itself with the latter, revoked the qualification note, confirming that, when the testamentary substitution is made in a generic form (with expressions such as "children" or "descendants", that is to say, without nominative appeals), the simple manifestation of the non-existence of these is sufficient to formalize the renunciation and subsequent acceptance by the heir favored by said renunciation.
2.- SALE OF LEASED PROPERTY. IT IS NOT NECESSARY TO PROVIDE THE TENANT'S WAIVER OF THE RIGHT OF FIRST REFUSAL IN ORDER TO REGISTER:
Attached (HERE) the Resolution of the DGSJFP of November 8, 2023 (BOE of November 30, 2023), where the DG resolves a case of a sale and purchase of leased real estate (premises), in whose deed the Notary certifies that he has been shown a deed where the lessee waives his right of preferential acquisition recognized by the LAU.
The Registrar denies the registration, alleging that it is necessary that he also be accredited, with evidence, the details and circumstances of the waiver (providing a copy of the waiver deed where the Registrar can analyze its terms, the legitimacy of the person granting it, etc.). The DG revokes the qualification note, considering that the Notary's attesting that the lessee has waived his right of first refusal is sufficient, since the Law does not attribute powers to the Registrar to qualify the terms of such waiver.
3.- IN CATALONIA THE PRE-LEGATEE CAN TAKE POSSESSION, BY HIMSELF, OF THE PRE-LEGACY ASSETS:
Attached (HERE) the Resolution of the DG de Dret, Entitats Jurídiques i Mediació de Catalunya of October 27, 2023 (DOGC of November 8, 2023), where a case is resolved regarding an acceptance of inheritance with several co-heirs, where one of them, in addition, being a pre-legatee of a property, accepts his part of the inheritance and, also, unilaterally, is awarded said property that forms the pre-legatee. The Land Registry refuses the registration on the grounds that, in order for such adjudication to take effect, the agreement of all the heirs is necessary.
The authorizing Notary Public appeals and the DG, aligning itself with the latter, revokes the qualification note, recalling that, in accordance with the CCCat (art. 427-22), the legatee can take possession of the legacy himself if it is a pre-legacy.
4.- SALE AND PURCHASE WITH RESOLUTORY CONDITION IN CATALONIA. INTERPRETATION OF THE PERCENTAGES OF NON-PAYMENT NECESSARY TO TERMINATE THE CONTRACT:
Attached (HERE) the Resolution of the DG de Dret, Entitats Jurídiques i Mediació de Catalunya of November 10, 2023 (DOGC of December 1, 2023), which resolves a case related to a deed of termination of sale, in accordance with an agreed and registered resolutory condition, due to the non-payment of amounts owed.
In this case, the DG establishes the correct interpretation of article 621-54 CCCat, by virtue of which, in order to terminate the sale and purchase due to non-payment of the deferred amounts (so that the sellers recover the ownership of the property) it is necessary that the unpaid amounts exceed 15% of the full price (total price of the sale and purchase), so that, only once unpaid amounts have accumulated that exceed 15% of the total purchase price, the sale and purchase can then be terminated.
5.- ARE REGISTRABLE THE AGREEMENTS OF A GENERAL MEETING TO WHICH THE ADMINISTRATORS DO NOT ATTEND:
Attached (HERE) the Resolution of the DGSJFP of November 15, 2023 (BOE of December 4, 2023), where the DG resolves a case of a General Meeting of Shareholders to which, the administrators of the company do not attend.
The Mercantile Registrar refuses the registration of the resolutions adopted, for this reason, under Article 180 of the LSC ("the administrators must attend the general meetings"). The Notary appealed the qualification, and the DG, aligning itself with the latter, confirmed that, in effect, the non-attendance of the administrative body at the general meeting is not a reason for the nullity of the same, but what, if any, will generate the liability of the administrators provided for in article 236 LSC.
NOTARIAL MINUTES OF THE MEETING. IN ORDER TO BE ABLE TO REGISTER THE PREVENTIVE ANNOTATION IN THE MERCANTILE REGISTRY, IT IS NECESSARY TO PROVE THAT THE NOTARIAL REQUEST TO THE ADMINISTRATORS HAS BEEN MADE:
Attached (HERE) the Resolution of the DGSJFP of November 14, 2023 (BOE of December 4, 2023), where the DG resolves a case of refusal of preventive annotation of request of notarial minutes of meeting, in the Mercantile Registry. In this case, a shareholder wants the notarial minutes of a general meeting to be taken and, to this end, sends an email to the chairman of the board of directors requesting this, who replies in the affirmative. Said shareholder tries to have the preventive annotation made in the Mercantile Registry on the basis of this Email, and the Registrar denies it, stating that for it to be possible to register the preventive annotation, it is necessary to provide the notarial request to the administrators.
The DG confirms the qualification note and reminds that, in order to be able to practice the preventive annotation that is sought, it is necessary to prove that the notarial requirement has been made to the administrators (art. 104.1 RRM).
7.- SALE OF REAL ESTATE BY RELIGIOUS CONGREGATION:
Attached (HERE) the Resolution of the DGSJFP of October 23, 2023 (BOE of November 22, 2023), which may be useful in this case of transfers, as it summarizes and analyzes in detail the legislation and documentation necessary to formalize the sale of a property belonging to a religious congregation.
8.- ELEVATION TO PUBLIC DEED OF THE LEASE CONTRACT SUBSCRIBED BY THE PREVIOUS OWNER OF THE PROPERTY:
Attached (HERE) the Resolution of the DGSJFP of October 2, 2023 (BOE of November 2, 2023), where the DG resolves an appeal filed against the refusal of the registration of a deed of elevation to public of a lease contract.
Lease agreement entered into by the previous owner (as lessor) and a lessee. The owner does not pay the mortgage loan that encumbers the leased property and this, finally, is subject to foreclosure, in which process, the property is awarded to a third party, in favor of which the property is currently registered. In this foreclosure process, the new owner who is awarded the property is aware that the same is leased, and the award, in the judicial process, is granted safeguarding the rights of said lessee. Subsequently, the lessee tries to register his right, and the Registry denies it for lack of successive tract (art. 20 LH), that is to say, that the person who signed the lease as lessor does not coincide with the current registered titleholder.
The DG revokes the qualification, considering this case an exception to the general principle, since in the foreclosure proceeding in which the current registrant was a party, the tenant's right to occupy the property was safeguarded.
9.- HORIZONTAL PROPERTY. FROM PRIVATE ELEMENT TO COMMON ELEMENT. THE CORRECT WAY IS THE AGREEMENT OF AFFECTATION AND CONVERSION INTO COMMON ELEMENT:
Attached (HERE) the Resolution of the DGSJFP of November 14, 2023 (BOE of December 4, 2023), where the DG resolves an appeal filed against the refusal of the registration of a deed of segregation of a private element and subsequent sale in favor of the community of owners (to convert it then in common element of the horizontal property).
The DG confirms the defect and, in summary, tells us that if you want to convert something private into a common element, the correct way is not its sale in favor of the community, but its configuration as a common element, modifying the description of the building, and with the unanimous agreement of the community of owners as it affects the constitutive title.
10.- NEW FUNCTIONALITIES IN THE ELECTRONIC HEADQUARTERS OF THE TAX AGENCY OF CATALONIA:
New features are summarized (HERE) and improvements in the electronic headquarters of the ATC:
Tax on property transfers and documented legal acts (ITPAJD): New features have been incorporated in the telematic forms for forms 600 and 620 and in the help program for forms 650 and 660:
- Adaptations to the telematic form of the ITPAJD model 600 to admit foreign transferors without tax identification number in transactions at the DRG rate (guarantee and loan rights in rem).
- Adaptations to the telematic form model 620, sale and purchase of certain used means of transport, to allow exporting the self-assessment and recovering its data when there is more than one acquirer, in the case of the purchase of a boat, and to show separately the types of motorhome vehicle.
Regarding inheritance and gift tax (ISD):
- Adaptations of the inheritance modality aid program to introduce current or savings account deposits with IBAN format.
Likewise, the automated incorporation of the public deed in the ITPAJD (form 600) and ISD (forms 650, 651 and 653) self-assessment files has been introduced . Therefore, it is no longer necessary for the citizen to provide the public deed if the notary's office has previously sent the notarial informative declaration to the Tax Agency of Catalonia.
11.- LCI MINUTES. IT IS NECESSARY TO ASK THE CLIENT HOW HE WANTS HIS FUTURE AUTHORIZED COPIES OF BOTH THE MORTGAGE LOAN AND THE SALE AND PURCHASE:
Attached (HERE) Note from the Board of Directors of the Notarial Association of Catalonia in which, in response to a communication received in several notaries' offices from the bank ING (requesting that all copies of their CV + PH deeds be issued in electronic format), it is indicated that, in the CV + PH, it is the buyer (who pays for the deed) who must choose the format of their authorized copies (paper or electronic).
For this purpose, it is recommended to ask the client about this issue in the pre-LCI minutes, record it in the minutes, and based on the client's preference, issue the copy as requested by the acquirer.
12.- INSTRUCTION FOR THE VERIFICATION OF REAL ESTATE VALUES 2024:
Attached (HERE) the Instruction for the verification of real estate values of the Tax Agency of Catalonia for taxable events (ITP, Inheritance and Donations) for the year 2024.
It should be remembered that this table is of vital importance when we do not have the reference value of the cadastre of the property in question. Always, in the first place, the reference value for tax purposes must be taken into account. Suppletory, in the absence of this, this table will continue to be used as it was traditionally done. Multiplying the cadastral value by the corresponding multiplier coefficient, in order to obtain the minimum tax value.
13.- HORIZONTAL PROPERTY AND SEGREGATION / DIVISION OF PRIVATE ELEMENT. IF THE STATUTES ALLOW IT, THEY ALSO, IMPLICITLY, AUTHORIZE THE NECESSARY WORKS TO EXECUTE IT:
Attached (HERE) the Resolution of the DGSJFP of November 2, 2023 (BOE of November 30, 2023), where the DG resolves a case related to a segregation of a local, resolving that, when in the constitutive title of the horizontal property the possibility of segregating or dividing privative elements is foreseen without need of collective agreement of the owners' meeting, implicitly the works and modifications that this segregation needs are being authorized, unless express clause to the contrary.
14.- SALE OF HABITUAL RESIDENCE OF THE FAMILY. THE CONSENT OF BOTH SPOUSES IS REQUIRED, ALSO FOR FOREIGNERS:
Attached (HERE) the Resolution of the DGSJFP of October 25, 2023 (BOE of November 22, 2023), where the DG resolves a case of a sale of a property belonging to a foreigner, resolving that the application of article 1320 CC (and therefore its counterpart in the Catalan civil code) regarding the need for consent of both spouses to dispose of the habitual residence of the family, is independent of what the governing law of the matrimonial property regime provides, and that according to the Regulation 24 June 2016, it is also applicable to foreign marriages.
15.- IMPORTANT DISTINCTION BETWEEN PARTITION MADE BY THE TESTATOR AND PARTITIONAL RULES:
Attached (HERE) the Resolution of the DGSJFP of October 27, 2023 (BOE of November 22, 2023), where the DG resolves a case related to a deed of acceptance of inheritance and hereditary adjudications, in which, synthesizing the jurisprudence of the Supreme Court in this matter, it clarifies the important differentiation between a partition made in the will itself and the mere "partitional rules".
The Center points out that when the testator carries out in the will all the partitional operations (inventory, appraisal, liquidation and adjudication of lots) we are dealing with a true partition made in the will. On the other hand, when the testator limits himself to expressing his will so that at the time of the partition, certain assets are awarded to each heir in payment of his assets, we are dealing with mere partition rules.
November 2023
1.- BE VERY CAREFUL. ERRORS IN NOTARY'S OFFICE THAT GENERATE CIVIL LIABILITY:
Attached (HERE) a Note from the General Council of Notaries, detailing the main claims that the Civil Liability Insurance for Notaries is having to deal with in the event of negligence, errors or professional malpractice. Below are some outstanding examples:
- Various complaints regarding authorized documents with persons with impaired mental capacity. Exercise extreme caution with elderly persons showing signs of cognitive impairment, incapacitated / with support measures for the exercise of legal capacity, under guardianship, conservatorship, etc.
- Identity theft. Be extremely diligent when verifying the identity of the person with his/her ID / NIE / Passport, etc. photo.
- Verification of mortgage encumbrances. Take extreme precautions with mortgages that have been economically cancelled, but not registered. Require documentary proof that the secured loan has been paid.
2.- NEW REMINDER. NEW DEVELOPMENTS IN FOREIGN INVESTMENTS:
Attached (HERE) an OCP informative note with a summary of the main novelties of Royal Decree 571/2023, on foreign investments. The following are considered as foreign investments:
Foreign investments in Spain:
- Participation of a NON-RESIDENT in Spanish companies exceeding 10% of the capital stock.
- Acquisition of real estate in Spain by NON-RESIDENTS in excess of 500,000 euros.
- In the event that the funds used in the investment originate in non-cooperative jurisdictions, prior declaration is required. The order of February 9, 2023 (HERE) contains the list of non-cooperative jurisdictions.
Spanish investments abroad:
- Participation in the capital of non-resident companies exceeding 10% of the capital stock.
- Acquisition of real estate located abroad for more than 300,000 euros.
- In the event that the destination of the investment is a non-cooperative jurisdiction, the prior declaration is also required.
Obligations of the Notary:
- When the regulatory development of the Royal Decree comes into force, it will be mandatory for the Notary to send the information on the foreign investment to the General Council of Notaries.
- During the transitional period, the telematic filing of tax returns is done through AFORIX.
- The obligation of the notary public to send to the Directorate General for International Trade and Investments, in writing, during the months of January and July of each year, a list of those intervened transactions considered as foreign investment, during the preceding six-month period for which the notary public has not been requested to submit the corresponding declaration, remains in force.
3.- IT IS POSSIBLE TO DECLARE THE END OF WORK PARTIALLY IN A HORIZONTALLY DIVIDED BUILDING:
Attached (HERE) the Resolution of the DGSJFP of September 19, 2023 (BOE of October 26, 2023), where the DG solves a case of a building, with several floors, divided horizontally, where the end of work of only part of them is declared (specifically, the first floor and the second floor, not the rest of the floors).
In this case, the DG accepts this, stating that there is no inconvenience in that the proof of completion of the work may be partial, by phases, and even by floors; since it may happen in practice that there are unfinished elements, without this obstructing the registration of the completion of others, as long as it is duly accredited.
4.- PARTITION OF INHERITANCE BY ACCOUNTANT PARTITIONER. CARE WITH THE CONFLICTS OF INTEREST:
Attached (HERE) the Resolution of the DGSJFP of September 5, 2023 (BOE of October 25, 2023), where the DG resolves that in a deed of acceptance, partition and adjudication of inheritance, the accountant-partidora has not limited herself to the strictly partitional and, in the adjudications, has carried out dispositive functions that require the intervention of the heirs.
In addition, there is a conflict of interest between two sibling co-heirs, since one is the guardian of the other, and therefore exercises his legal representation. As both of them are interested in the inheritance, and one of them is legally represented by his brother, there is a conflict of interests and in this case the intervention of a legal defender is necessary.
5.- SALE OF PARKING SPACE IN AN UNDIVIDED PROPERTY. IT IS NECESSARY TO DESCRIBE CONCRETELY THE PARKING SPACE:
Attached (HERE) the Resolution of the DGSJFP of July 28, 2023 (BOE of October 12, 2023), where the DG resolves a case of sale of an undivided participation (1.329%) of a property, destined to parking of vehicles. The deed contained the description of the registered property as a whole (consisting of the basement floor of a building intended for parking and storage rooms), but not the description of the specific parking space whose exclusive use and enjoyment was attributed to the undivided interest of the transferred property.
The DG, aligning itself with the Registrar, considers that it is necessary that, in the deed of sale, the boundaries and surface area of the parking space to be transferred be described in detail.
6.- LAND REGISTRY AND LAW 11/2023. NEW DEADLINES FOR QUALIFICATION OF DOCUMENTS:
Attached (HERE) the Resolution of the DGSJFP of July 7, 2023 (BOE of August 15, 2023), which approves the schedule for implementing the law 11/2023 of digitalization of registry actions. This law establishes the electronic signature of all registry entries and documents and the keeping of a protocol in electronic format. The aforementioned resolution includes two annexes with a schedule for the implementation of the electronic signature in each of the Land Registries of Spain, and extends the ordinary term of registry qualification from 15 working days to 30 working days, for a period of one month from the date on which the implementation of the digital actions begins.
Attached to the summary is the resolution with the annexes containing the respective starting dates of the electronic signature implementation phase, so that all employees of the notary's office can consult them and take into account that within one month from that date, the qualification period is not 15 days as usual, but 30.
The importance of this consultation lies in the fact that cancellations of mortgages registered in all the registries in Spain are authorized, and each of them has a date foreseen for the implementation of this electronic signature!
7.- CIVILIAN CITIZENSHIP AND ITS DIFFICULTIES OF PROOF. IT IS NECESSARY TO GIVE MUCH IMPORTANCE TO THE MANIFESTATION THAT IS INCLUDED IN THE DEED:
Attached (HERE) the Resolution of the DGSJFP of October 3, 2023 (BOE of November 2, 2023), where the DG solves a case related to the proof of the civil residence of a deceased and its importance to determine the applicable inheritance law.
In this case, the deceased, in her will, states that she has common civil status. However, her heir (husband), when accepting the inheritance, in said deed of acceptance states that the civil domicile of the deceased was that of Ibiza, and based on the same, he is awarded the entire inheritance (unlike this, if the civil domicile were common, as the deceased had no descendants, but did have living ascendants, these would be legitimaries). When this deed of acceptance of inheritance is presented for registration, the Registrar rejects it, considering that the manifestation of the common civil tenancy made by the deceased in her will prevails.
The DG, aligning itself with the Registry, considers that the proof of the civilian citizenship is very difficult (except in those cases in which the express manifestation is registered in the Civil Registry). Therefore, in case of doubts, the declaration of the interested party made before a Notary Public (since it has been made being duly informed by the notary public) must prevail, even over what may result from extrajudicial documents (such as a census certificate from which it is clear that the person has been registered at that address for more than 10 years), since administrative residence does not always coincide with the actual address (which is what determines civil residence).
8.- THE ADMINISTRATOR WITH EXPIRED OFFICE CAN CALL THE GENERAL MEETING FOR THE RENEWAL OF THE ADMINISTRATIVE BODY AND TO PRESENT ANNUAL ACCOUNTS:
Attached (HERE) the Resolution of the DGSJFP of October 31, 2023 (BOE of November 21, 2023), in which the DG resolves that the General Meeting convened by an administrator with expired office is valid, provided that such General Meeting is convened to renew the administrative body and to approve the annual accounts of several fiscal years as a way to overcome the closing of the Land Registry.
9.- PREVENTIVE POWERS AND INTERREGIONAL ASPECTS:
The following is a brief summary of a paper on preventive powers and aspects to be taken into account in the field of inter-regional law:
- Great usefulness of the preventive power of attorney: it avoids the family having to resort to judicial support measures (which take more than a year to set up, plus the cost of lawyers, etc.).
- Soon it will be possible to consult telematically, in the Civil Registry, the validity of these powers of attorney. Caution to be taken into account whenever an attorney-in-fact goes to the Notary to sign with one of these powers of attorney.
- Doubts about applicable law when a client goes to a notary to sign a preventive power of attorney: We must always resort to the criterion of the habitual residence (art. 9.6 Cc) to constitute the power of attorney under the CCCat or the Cc.
- Always remember to include (or not), at the client's request, the clause on whether judicial authorization is required for the same acts for which it is required by the guardian.
- In Catalonia, in the next few months, there will be relevant developments in this matter, since the draft bill to reform Book II of the Catalan Civil Code on this matter will soon enter the Parliament as a Bill, so that, if it is processed ordinarily, in a few months there will be a new regulation on this matter with very deep modifications that we will have to study in order to adapt the deeds.
LAW 11/2023. DIGITALIZATION OF NOTARIAL AND REGISTRY ACTS (ELECTRONIC PROTOCOL, VIDEO SIGNATURES and ELECTRONIC AUTHORIZED COPIES):
Attached is an article from our BLOG summarizing the 10 main points of the entry into force of Law 11/2023 (HERE).
There are three main changes that will affect our daily lives:
- The first is the deposit of all the signed documents in the electronic notary's office, being a faithful reflection of the paper document (matrix, united, diligences and notes).
- The second major change is the possibility of video-signing certain types of documents with a digital certificate once the citizen is registered in the notarial portal;
- and finally, the creation of electronic authorized copies that replace paper with the same effectiveness and validity.
After 21 days of implementation we have encountered the following casuistry:
REGARDING THE NOTARIAL PORTAL (PNC):
- Citizens who wish to carry out procedures must fill in the form and validate their cell phone and contact email address. The procedure is simple and is completed by uploading the identity document to the platform. We have validated it and it works correctly for citizens identified with DNI, NIE and PASSPORT.
- The most practical way to access and sign is to use a digital certificate. We recommend that of the Fábrica Nacional de Moneda y Timbre, although there are several issuing entities certified by Ancert.
- The accessing citizen will be able to consult all his deeds history between January 1, 2007 and November 8, 2023. The deeds signed after the entry into force of the law are yet to be published.
AS FOR THE VIDEO SIGNATURE:
- Since the beginning we have been able to successfully perform 2 video signatures . Although it is a very new technology and has its limitations, it has not been complex to perform once the client is registered in the portal and has the digital certificate to sign.
- The connection is made with an application integrated in the web browser and is intuitive and simple. We expect that as citizens register, the number of documents granted by this method will increase.
REGARDING THE ELECTRONIC AUTHORIZED COPY:
- We have already issued the first electronic authorized copies with secure verification code (CSV).
- The process is managed from Word itself and in parallel to the deposit of the document, although it can be issued at a later date, always for documents signed after November 9, 2023.
- The document is published in the notary's electronic office and the CSV is generated quickly and easily in SIGNO to be sent to the client.
- Once uploaded to the electronic site, it is shared with the client by means of an e-mail in which we provide a link to its electronic authorized copy. This delivery method provides authenticity and legal validity before third parties. We believe that little by little it will replace the paper because for its consultation and validation it is not necessary to be registered in the notary portal of the citizen.
most frequent doubts about electronic protocol and video signature:
In SIC, within the section "Law 11/2023. Digitalization of notarial and registry actions" you can find a document with questions and answers about existing doubts in relation to the implementation of Law 11/2023, two publications have been issued: volume 1 and volume 2.
Also attached (HERE in singular and HERE plural), basic templates for any electronic deed granted by video signature through the Notarial Citizen Portal.
MODIFICATION OF THE SINGLE COMPUTERIZED INDEX. NEED TO REPORT SEPARATELY THE NUMBER OF PAGES ON PAPER / TELEMATIC SUPPORT:
As of November 9, 2023, the Single Computerized Index is modified to incorporate as a mandatory field to be reported in each public instrument the number of pages of the paper support matrix separately from the number of pages in the electronic support.
For any questions regarding the new digitalization (both employees and customers), please contact Antonio Alba for resolution by e-mail: antonio@jesusbenavides.es
October 2023
1.- CENTRAL REGISTRY OF REAL PROPERTY. EXPLANATORY NOTE
Attached (HERE) clarifying note from OCP on several issues related to the Central Registry of Real Estate Titles and the obligations of the Notaries in this respect:
- For the granting of the legal transaction, obtaining the e-mail address referred to in Article 4 of RD 609/2023 is not a requirement of validity, since it is not part of the identification requirements of the beneficial owner.
- Percentage of ownership: this information should only be included when a new manifestation record has to be made in the event of a discrepancy between the content of the BDTR and the grantor's manifestation.
PURCHASE AND SALE OF REAL ESTATE FORMALIZED BY A REPRESENTATIVE WITH REVOKED POWER OF ATTORNEY. BE VERY CAREFUL WHEN VERIFYING THE VALIDITY OF POWERS OF ATTORNEY AND CORPORATE POSITIONS.
Attached is the Resolution of the DGSJFP of July 26, 2023 (BOE of September 28, 2023).. The DG resolves a case of a CV of a real estate, in which the seller is represented by an attorney-in-fact, stating that his power of attorney is in force, and the Notary, giving his positive sufficiency judgment in the deed. However, from the data in the Mercantile Registry, it appears that this power of attorney was revoked a few days ago, the revocation having been published in the BORME, once registered in the Registry (from which moment it is enforceable against third parties), on the same day of the signing of the CV.
The DG confirms the qualification of the Registry, so that the buyer's right cannot be registered since the seller was not duly represented by a person with sufficient powers to formalize the sale.
To take into account the case and make the pertinent consultations at the Registry as close as possible to the signing of the deed (if possible, on the same day), in order to avoid such cases.
3.- SL. CAPITAL REDUCTION DUE TO THE PURCHASE OF SHARES. AMOUNT OF THE RESTRICTED RESERVE
Attached is the Resolution of the DGSJFP of July 24, 2023 (BOE of September 27, 2023).. The DG resolves the typical case of "exit" of a partner of a SL. To do so, the company repurchases all the shares of that shareholder (for a redemption value higher than the nominal value) and then reduces the share capital by the same amount (thus proceeding to its amortization) and, also, endow a restricted reserve, for the amount of the reduction (taking as a reference the nominal value of the shares, and not the value reimbursed to the shareholder, which as indicated, is higher), to guarantee the rights of the creditors.
The Registry qualifies negatively because it considers that the amount of the reserve must be equal to "the value of what was received by the partner" (i.e., the total amount reimbursed, and not only the nominal value of the units).
The DG revokes the Commercial Registrar's qualification, determining that in these cases the amount of the restricted reserve must be equal to the nominal value of the redeemed shares, and not to the amount reimbursed to the outgoing shareholder.
DE FACTO GUARDIANSHIP. INTERPRETATIVE DOCUMENT FOR BANKING PROCEDURES
It is reported that in SIC, within the link "Law 8/2021 in support of disability" a framework protocol signed between the State Attorney General's Office and the banking sector is made available to employees to clarify the powers of the de facto guardian in the field of banking transactions.
This document has also been the subject of a detailed analysis in an article in our blog (HERE you can read it).
5.- FOREIGN INVESTMENTS. NEW REGULATIONS TO BE TAKEN INTO ACCOUNT
Staff is informed of the recent approval of Royal Decree 571/2023, of July 4, on foreign investments (HERE you can consult it), which must be taken into account when entering into transactions with non-residents. Specifically, it modifies the previous regulations in the following fundamental aspects:
1.- The following are considered foreign investments for the purposes of making the corresponding subsequent declaration to the Investment Registry of the Ministry of Economy:
- Participation by non-residents in Spanish companies when such participation exceeds 10% of the capital stock or of the voting rights of the company (previously the participation was required to be 50%).
- Acquisition of real estate in Spain by non-residents when the amount exceeds €500,000 (previously the minimum limit was €3,000,000).
In these cases the non-resident holder is obliged to declare the investment before the Investment Registry of the Ministry of Economy, using the forms resulting from Transitional Provision 3 of the Royal Decree (forms DP1, D1A D1B, DP2, D2A, D2B).
2.- If the transaction has been intervened by a Notary Public, he/she must communicate the investment to the General Council of Notaries through the notarial electronic office (SIGNO) and, in any case, must warn the person appearing of the obligation of presentation.
In the case that the investments considered foreign (in accordance with article 4 of the Royal Decree), have origin in a country of non-cooperative jurisdiction (former tax havens), which are those included in the Order of February 9, 2023, it will be necessary to make a prior declaration and the Notaries must demand it before the granting, and expressly warn of it in the public document.
6.- PRACTICAL NOTES ON DOCUMENTS INVOLVING FOREIGNERS
Attached (HERE), an interesting article by a fellow Notary, where a series of practical reflections to be taken into account when a foreign individual is involved in a public document. By way of summary, the most relevant ones are highlighted:
- Identification. The general rules of the Notarial Regulations apply. Specifically, in the case of EU foreigners, this is done either through their passport or their national identity card.
- NIE: Foreigners who, due to their economic, professional or social interests, are related to Spain, must be provided, for identification purposes, with a personal, unique and exclusive sequential number. This number is necessary for all operations with tax implications.
- Translation: Unless the notary knows the foreign language, the provisions of Article 150 of the Notarial Regulations must be complied with and an interpreter must be requested.
- Means of payment: Be very careful and diligent with regard to money laundering prevention. It is highly advisable to demand that the deposit and payment accounts be in Spanish banks. If there are foreign banks or accounts of third parties, the most complete and reliable information possible about the origin of the funds will be required, requiring documentary justification (certificates of ownership of the accounts, contracts justifying the origin of the funds, etc.).
- Apostille: It is essential to have an apostille for documents issued abroad.
- Real estate transactions. Remember the withholding of 3% of the price (Non-Residents Income Tax) and the inversion of the taxpayer in the "municipal capital gain".
7.- REQUEST FOR COPIES OF WILLS TO THE ARCHIVES OF THE NOTARIAL ASSOCIATION OF CATALONIA
Information of interest when requesting copies of wills from the College. In order to avoid problems in case of discrepancies in dates, the College requests that, when a copy request is submitted, the corresponding death and last will certificates be attached to the request for a copy of the will in order to more accurately identify the request.
8.- TELEMATIC SIGNATURE OF NOTARIAL DOCUMENTS. ENTRY INTO FORCE
As previously reported, next November 9, Law 11/2023 will enter into force, which will allow the telematic signature of public documents (that is, through a videoconference system with the Notary and electronic signature, without the need for the client to physically go to the Notary's office). HERE you can find an article in the blog of Jesus Benavides' Notary's office with more details (which documents can be signed, procedure, etc.).
In order to be pioneers with this novelty and give the best service to the clients, a new section has been created in the web page of the Notary's office of Jesus Benavides (Video signature) where, by means of didactic videos, the whole process to be followed by any citizen who wants to put this possibility into practice is explained.
For any questions in this regard (both from employees and customers), please contact Antonio Alba for resolution at his e-mail address: antonio@jesusbenavides.es.
September 2023
1.- COMPUTATION OF DEADLINES FOR HOLDING THE GENERAL MEETING. THE DAY ON WHICH THE MEETING IS HELD CANNOT BE INCLUDED IN THE COMPUTATION.
Attached is the Resolution of the DGSJFP of July 11, 2023 (BOE of July 28, 2023).. According to it, and by way of summary, the DG reminds us of the rules for calculating the deadlines for the call of a general meeting in a capital company. As is well known, article 176 LSC determines that one month (SA) or 15 days (SL) must elapse between the call and the holding of the general meeting. For the computation of these periods, the starting day begins on the day on which the notice is sent to the last of the shareholders and, in order to determine the day on which the period ends, the day on which the general meeting is held cannot be computed.
Therefore, one month must elapse for corporations and 15 days for limited liability companies, and it is the day after these deadlines when the General Meeting can be validly held.
2.- DOCTRINE OF THE GENERAL DIRECTORATE ON TARIFF MATTERS
Attached (HERE) an interesting document containing a summary of the doctrine of the General Directorate of Legal Security and Public Faith, in tariff matters, for the years 2020 - 2023. To consult in case of doubts on how to minute specific deeds.
3.- NEW DEVELOPMENTS IN THE SINGLE COMPUTERIZED INDEX
It is reported that, recently, the Single Computerized Index has included a series of new features to improve the reflection of the legal transactions that are granted in public instruments.
Specifically, new legal acts are created to duly collect:
- Acts of acquisition or preservation of civilian citizenship.
- Deeds of support measures and assistance constitution deeds (and their equivalent in Catalonia),
- Minutes of omission of protocol or Registry Book number (to solve the unfortunate case that one or more numbers remain without a document actually authorized or intervened).
Other minor modifications:
- Proof of the means of payment in the deposit records.
- Specification of the ownership (or not) in the sale and purchase of shares and stocks.
- Incorporation of entities with or without legal personality, where the information of their Tax Identification Number is required (if the information is obtained after the granting and it has not been possible to obtain it from the client, when the deadline for submitting the index has expired, the lifting of the rule must be requested through the usual channel).
4.- THEORY OF THE COMPLEX LEGAL BUSINESS. PURCHASE + MORTGAGE OF REAL ESTATE BY MARRIED PERSON. THE CONSENT OF THE OTHER SPOUSE IS NOT NECESSARY IF THE MORTGAGE IS MADE SIMULTANEOUSLY WITH THE PURCHASE. CARE IN CASE OF FOREIGNERS
Attached (HERE) an interesting article summarizing the doctrine of the DG on the theory of the complex legal business. It deals with cases where a married person buys a property alone, and then mortgages it. As it is known, the general rule determines that, in order to mortgage the habitual residence, even if it belongs to only one of the spouses, the consent of the other spouse is necessary. As an exception to this general rule, the theory of the complex legal business arises, by virtue of which, the consent of the non-owner spouse is not necessary in the constitution of mortgage on the habitual residence immediately after its purchase, that is to say that the mortgage is signed with the number immediately after the protocol number of the purchase-sale.
In the case of foreigners, BE CAREFUL, since the DG does not admit the doctrine of the complex legal business, unless that foreign law allows it and it is so accredited (therefore, it must be verified by means of a report of the notary if the foreign law that governs the specific matrimonial regime of the clients admits or not this theory of the complex business).
5.- PUBLIC NOTARIZATION OF CORPORATE RESOLUTIONS. A GOOD DEED CAN SAVE A BAD CERTIFICATE
Attached is the Resolution of the DGSJFP of July 10, 2023 (BOE of July 28, 2023).. According to it, and by way of summary, the DG determines that, in the context of an elevation to public of corporate resolutions of an SL (cessation and appointment of positions), if the certificate does not indicate the quorum for adoption of the resolutions, but in the deed it is specified (through a statement of the administrator), this is sufficient to register the agreement in the Commercial Registry.
6.- PRIOR IN TEMPORE, POTIOR IN IURE. WHAT ARRIVES FIRST AT THE REGISTRY, IS WHAT PREVAILS (EVEN IF THE LAW IS LATER).
Attached is the Resolution of the DG of Law, Legal Entities and Mediation of July 17, 2023 (DOGC of July 31, 2023).. According to it, and by way of summary, the DG determines that what accesses first to the Registry, is what prevails.
A case in which, in 1986, by means of a private document, a life usufruct on a property is constituted. Subsequently, on 02/09/2023, this private document is elevated to public deed and is presented for registration in the Land Registry. However, the Registrar refuses the registration, since on 02/03/2023, that is, 6 days before, a deed of bequest was presented for registration, in which this right of usufruct is awarded to a third party, on the basis of an acceptance of inheritance of a person deceased in 2022.
In this case, the DG recalls the basic principle of operation of the Registry, i.e., prior in tempore, potior in iure, so that what arrives first at the Registry and is registered (usufruct of 2022 presented on February 3, 2023), prevails over the other rights (in this case, a usufruct constituted in private document in 1986 and presented for registration on February 9, 2023 on the basis of a deed of elevation to public deed).
7.- TABLE OF REGULATIONS ON NATIONALITY AND MARITAL STATUS
Attached (HERE) an interesting document that includes a table of regulations on nationality and civil status, where we can find links to regulations and Resolutions of the General Directorate on various matters such as Civil Registry, certifications, economic regime of marriage, etc.
8.- NATIONALITY OATH. VARIOUS ISSUES TO BE TAKEN INTO ACCOUNT
Attached (HERE) Circular of the DG regarding the competence of the specific Civil Registry where to formalize the declaration of option of the Spanish nationality, as well as the oath or promise. In the same one it is established that the competence will correspond to the Civil Registry Office of the applicant's domicile.
Also attached (HERE) Circular of the General Director of Legal Security and Public Faith, which determines the inappropriateness of granting certificates of oath of nationality when indications are detected that the applicant has performed acts incompatible with good civic conduct (such as, for example, the fact that the applicant is incarcerated in a penitentiary center).
9.- JUDICIAL CHALLENGE OF NEGATIVE QUALIFICATIONS. SERVICE TO WHICH WE CAN RESORT AS A NOTARY'S OFFICE.
Attached (HERE) an informative document of the General Council of Notaries, through which, a service available to Notaries, to be able to appeal judicially those negative ratings (or also Resolutions of the DGSJFP) that may involve a corporate interest for Notaries.
Thus, in the event that the employee encounters a negative rating that he/she considers may affect the Notary's office as a whole, he/she may raise this possibility with the Notary, which may be requested through the channels indicated in the attached document.
10.- THE ADVISABLE ACT OF MANIFESTATIONS PRIOR TO THE GRANTING OF A DEED IN WHICH A PERSON WITH DISABILITY INTERVENES.
The informative circular 3/2021, of September 27th of the Permanent Commission of the General Council of Notariesproposes that prior to the execution of a deed in which persons with disabilities are involved, a record of manifestations should be drawn up in which the circumstances that may influence the execution of the legal transaction in question should be recorded. The aforementioned record may include, among other circumstances:
- Statements by the person with a disability himself/herself, for example, the statement of that person recognizing that he/she is selling for a price below market price for a specific need or convenience, or the reasons for which he/she renounces a specific inheritance.
- Statements of persons assisting the disabled person in the exercise of his or her capacity. For example, the declaration of the de facto guardian, lawyer, incidental companion, etc., stating that he/she has recommended the disabled person to grant a deed of sale because it is necessary for his/her future support and maintenance, or to settle outstanding debts.
This act is an essential complement to the notarial capacity judgment, and provides clarity and security for future disputes and possible claims. It is recommended that the person requesting the record be the person with a disability or his or her assistant.
11.- THE CENTRAL REGISTRY OF REAL TITLE IS CREATED.
Royal Decree 609/2023, of July 11, 2023, creating the Central Registry of Real Estate Titles. Royal Decree 609/2023, of July 11, 2023, which creates the Central Registry of Real Estate Titles.. This registry must be consulted by all parties obliged by law to control money laundering, including notaries. However, until the data is uploaded to this registry, for which 9 months are given, the Royal Decree establishes that the traditional sources must continue to be used (Database of the Beneficial Ownership through Signo).
July 2023
1.- NEW PAID LEAVE OF 15 CALENDAR DAYS FOR DOMESTIC PARTNERS
Royal Decree-Law 5/2023 is published in the BOE and enters into force (HERE you can consult it), by virtue of which, a paid leave of 15 calendar days is recognized for the fact of constituting (and registering) as a stable couple. All stable couples that are constituted from now on can be informed about it, so that they can enjoy this new leave.
2.- NEW REGULATION OF STRUCTURAL MODIFICATIONS OF COMMERCIAL COMPANIES
The aforementioned Royal Decree-Law 5/2023 (HERE you can consult it) has repealed the former Law 3/2009, of April 3, 2009, on structural modifications of commercial companies (transformation, merger, spin-off, global assignment of assets and liabilities, etc.). Thus, from now on, the new legal regime for structural modifications can be found in the aforementioned Royal Decree-Law 5/2023. To be taken into account when any officer prepares one of these operations (he/she should consult the new regulation and adapt the legal quotations to the new regulatory text).
3.- FOREIGNERS' DIVORCE DECREES, WITH ADJUDICATION OF REAL ESTATE, MUST BE REGISTERED IN THE CENTRAL CIVIL REGISTRY.
Attached is the Resolution of the DGSJFP of June 13, 2023 (BOE of July 10, 2023).. According to it, and by way of summary, the DG determines that, in case of divorce (OF FOREIGNERS whose marriage is not registered in the Spanish Civil Registry), if in the sentence a property is awarded to one of the ex-spouses, in order to register it in the Property Registry, it is necessary that, previously, this divorce sentence is registered in the Central Civil Registry.
4.- REGISTRATION OF PROPERTY AND PRIOR IN TEMPORE. SOMETIMES YES, SOMETIMES NO, WHAT IS FILED LATER HAS PRIORITY OVER DOCUMENTS FILED EARLIER.
Attached is the Resolution of the DGSJFP of June 15, 2023 (BOE of July 10, 2023).. According to it, and as a summary, the DG solves a curious case:
- CV + PH is signed and submitted for registration, qualified with remediable defects.
- A correction is presented, and being the entry in force (that is to say, not yet registered the VC + PH), an order of the AEAT enters in the Property Registry with a prohibition to dispose, due to tax debts.
- The Registrar negatively qualifies the CV + PH (filed before the writ) on the grounds of public order.
- The Notary appealed and the DG agreed with him, determining that if this order comes from an administrative procedure where the civil validity of the legal transaction is not questioned (remember, tax debts), the negative qualification does not proceed, since the CV + PH have been presented before in the Registry (prior in tempore potior in iure).
- However, the DG reminds us that if the injunction had been issued in the context of criminal proceedings where the validity of the business is questioned (for example, an alleged fraud in the VC), the suspension of the registration would be appropriate (even if the injunction was subsequent), for reasons of general interest / public order.
5.- NOTHING CAN BE REGISTERED IN FAVOR OF A COMPANY WITH A REVOKED CIF.
Attached is the Resolution of the DGSJFP of June 16, 2023 (BOE of July 10, 2023).. According to it, and by way of summary, the DG determines that, in the context of a sale and purchase, if the acquiring company has the CIF revoked, the acquisition cannot be registered in its favor. It is important to take into account and always remember, when a company is involved, to consult the existing database on the subject.
6.- IT IS POSSIBLE TO REDUCE CAPITAL STOCK BELOW 3,000 EUROS IN AN EXISTING COMPANY
Attached is the Resolution of the DGSJFP of June 13, 2023 (BOE of July 10, 2023).. According to it, and by way of summary, the DG solves the following curious case:
- 3,000, executes a capital reduction, as a result of which, its resulting capital stock figure falls below 3,000 euros.
- The Registrar suspends the registration as he considers that this figure is below the legal minimum, as he considers that SLs of less than 3,000 euros of capital are only possible at the time of incorporation.
- The DG revokes the qualification of the Registrar, considering that it is possible to execute a capital reduction in an SL whose result is a share capital of less than 3,000 euros.
CAPITAL STOCK INCREASE AND PREEMPTIVE SUBSCRIPTION RIGHTS. TIME MUST BE RESPECTED
As a result of a transaction formalized at the Notary's office, it is recalled that in the context of a capital increase of a corporation, the shareholders' pre-emptive right to capital increases arises from the moment of publication of the offer for subscription of the new shares in the Official Gazette of the Commercial Registry, or from the written communication to each of the shareholders. Such subscription may be made by the shareholders within the period established by the Shareholders' Meeting, which may not be less than one month from the publication or communication.
Therefore, these deadlines must be taken into account and respected when formalizing this type of transaction (so that it is not possible for the subscription of the new shares to be carried out at the same Meeting of the resolution, unless all the shareholders have attended the meeting).
8.- CIVIL LIABILITY OF THE NOTARY. VERY IMPORTANT TO TAKE INTO ACCOUNT IN ORDER TO AVOID THIS KIND OF MISTAKES.
Attached is a link to an interesting doctrinal article (HERE) in which the civil liability of the Notary Public is analyzed. Of special interest, there is a section with details of specific cases (for example, omission of charges, insufficient powers of attorney, lack of information regarding the tax effects of the granting, etc.).
It is strongly recommended that all employees of the Notary's Office read the article and these specific cases to avoid making these types of errors and the liability associated with them.
9.- CIVIL REGISTRATION AND OATH OF NATIONALITY AND NOTARIZED MARRIAGES. IMPORTANT ISSUES TO BE TAKEN INTO ACCOUNT
Attached is a document from the General Directorate of Legal Security and Public Faith (see PDF attached to this email) which clarifies several issues related, above all, to the documentation to be submitted by the interested parties in the acts of nationality oath and in the marriage proceedings before a Notary Public, as well as aspects related to the procedure to be taken into account in both grants of nationality and marriage.
June 2023
1.- ARTICLES OF ASSOCIATION. NOTICE OF MEETING. THE CLAUSE IN THE BYLAWS THAT ALLOWS THE NOTICE OF THE MEETING TO BE SENT TO THE SHAREHOLDERS BY ORDINARY MAIL (WITHOUT ACKNOWLEDGEMENT OF RECEIPT) IS NOT VALID:
Attached is the Resolution of the DGSJFP of May 10, 2023 (BOE of June 1, 2023).. According to them, and by way of summary, the DG reminds us that (in the framework of the incorporation of an SL), the statutory clause that allows the meeting notice to be sent to the shareholders by ordinary mail (without acknowledgement of receipt) is not admissible, since for the notice to be valid, it is necessary that the system of transmission allows verification of the receipt of the notice by the addressee.
2.- IN THE DEED OF EXTRAJUDICIAL SALE OF MORTGAGED PROPERTY IT IS NECESSARY THE RELIABLE NOTIFICATION OF THE EXECUTION TO THE HOLDERS OF SUBSEQUENT CHARGES:
Attached is the Resolution of the DGSJFP, dated May 11, 2023 (BOE of June 1, 2023). Case of extrajudicial foreclosure of mortgaged property, in a notary's office, where there is a resolutory condition subsequent to the mortgage in favor of a company. The company is notified of the foreclosure proceedings by registered mail with acknowledgement of receipt, but the delivery is negative, after which the deed is granted. The DG, aligning itself with the thesis of the Registrar, does not accept this, since it considers that when the extrajudicial foreclosure of a mortgaged property is formalized by means of a deed, it is necessary to notify reliably the procedure to all the holders of charges or rights subsequent to the mortgage being foreclosed, so that if it is decided to send the notification of the procedure by registered mail with acknowledgement of receipt, and its delivery to the addressee is negative, it is appropriate to make a personal notification, by the Notary, by means of a deed of notification (art. 202 Notarial Regulations).
3.- RECTIFICATION OF MORE THAN 10% OF THE LAND AREA. IT IS NOT POSSIBLE TO REGISTER IT "LITTLE BY LITTLE":
Attached is the Resolution of the DGSJFP, dated May 12, 2023 (BOE of June 1, 2023). A deed is granted for the rectification of the size of the property, by the "simplified way" of article 201.3 of the Mortgage Law(for differences that do not exceed 10%), but when analyzing the square meters stated in the registry and the meters declared now (from 9,403 to 10,377), it is appreciated that the difference is higher than 10%. The Registrar suspends registration and subsequently, the Notary presents a deed of correction where it is requested to register only the excess of capacity up to 10%. The Registrar qualifies again negatively, and the DG, aligning with the Registrar, confirms that this is not possible, since it is not possible to register "little by little" or "by parts" a rectification of capacity, so that if the same is higher than 10%, the ordinary procedure of article 201.1 of the Mortgage Law must be used, and not the simplified procedure of article 201.3.
4.- MINUTATION OF "MINOR CONCEPTS". WHAT CAN BE CHARGED AND WHAT CANNOT:
Interesting entry from the blog "justitonotario" (HERE) which analyzes a Resolution of the Directorate General of January 3, 2023 (the full text can be consulted in a link of the aforementioned blog), which resolves an appeal by a private individual against the minutes of a Notary of a deed of sale. By way of summary, it determines that:
- What is witnessed and what is not? It is the Notary who decides.
- Mercantile Registry Report: Not applicable.
- Actual Holder Consultation: Yes.
- Blank sides of checks: correct.
- Incorporation to the copy of a folio for the consignment of notes: correct.
- Diligences: Must be on record in order to be minutable.
- Simple copies and agreement of assumption of expenses by the buyer: If the buyer assumes the expenses, this includes the copies necessary to comply with the obligations of communication of the formalized business.
- Number of simple electronic copies: 2 (for communications to Cadastre and City Hall, respectively).
- Number of simple paper copies: 3 (to liquidate ITP, "plusvalía" and various formalities, respectively).
- At the moment of indicating the number of copies desired by the grantors: At the time of signing.
- What can we consider as testimonies? The transcription of the data of the intervening company; the elaboration of the necessary card to be able to carry out the telematic liquidation; the testimony by request of registry information; the consultation of Real Titularity; the simple note of the Registry; the receipt of the IBI; the descriptive and graphic cadastral certification (to the margin of the extra-land registry management also minutable); the checks that accredit the means of payment; the certificate of debts of the community; the label of the Energetic Certification or the whole certificate and respecting what is needed according to the cases; the proof of reception of the Town hall of the communication of the article 110.6.b) and the verification of CSV`s.
- Security seal: Yes, it is minuted.
- Note from the Registry: It can be a supplement (in the margin of the testimony).
5.- IT IS NOT POSSIBLE TO BE 2 THINGS AT THE SAME TIME. IT IS NOT POSSIBLE TO BE A MEMBER (NATURAL PERSON) OF THE BOARD OF DIRECTORS OF A COMPANY AND, AT THE SAME TIME, ALSO BE A NATURAL PERSON REPRESENTING A COMPANY THAT HOLDS THE POSITION OF MEMBER OF THE SAME BOARD OF DIRECTORS:
Attached is the Resolution of the DGSJFP of May 23, 2023 (BOE of June 16, 2023).. According to them, and by way of summary, the DG determines that, in a 3-member board of directors, it is not possible for the same natural person to hold the position of member of the board and, at the same time, the position of natural person representing a company that is also a member of said board, since this would imply that, de facto, a single person would have the right of veto for the adoption, or not, of any agreement, in addition to being able to generate situations susceptible to conflict of interest. In any case, if the board had more than 3 members, the issue would be more debatable and the specific case would have to be analyzed in order to reach a conclusion in this respect.
6.- SALE OF REAL ESTATE BY A COMPANY REPRESENTED BY AN ADMINISTRATOR WITH HIS POSITION NOT REGISTERED IN THE MERCANTILE REGISTRY. IT IS POSSIBLE IF THE NOTARIAL JUDGMENT OF SUFFICIENCY IS WELL DONE:
Attached is the Resolution of the DGSJFP of May 9, 2023 (BOE of May 29, 2023).. According to them, and by way of summary, the DG reiterates its already consolidated doctrine and determines that, in a case of an SL selling a property, represented in the sale by its administrator, without the position still registered, it is possible to formalize the operation if the notarial judgment of sufficiency is made in the correct way . In particular, the deed should contain all the circumstances foreseen by the law in order to understand the appointment of the administrator as valid:
- The resolution of the duly called General Meeting.
- Acceptance of appointment,
- The notification or consent, as the case may be, of the holders of the previous registered offices.
AMENDMENT OF THE COMMERCIAL REGISTRY REGULATIONS IN ORDER TO ADAPT THEM TO THE EUROPEAN UNION REGULATIONS ON DIGITAL PROCESSES.
HERE you can consult the aforementioned reform of the Mercantile Registry Regulations, published in the Official State Gazette of June 14. Based on the same, as key aspects:
- The assignment of a Unique European Identifier (EUID) to all capital companies and branches is foreseen, allowing them to be unequivocally identified through a system of interconnection of all EU commercial registries.
- The possibility of creating and closing branches telematically/online is foreseen.
- Its entry into force is delayed by one year, counting from the publication in the Official State Gazette of Law 11/2023 (i.e., May 9, 2024).
May 2023
1.- WAIVER OF INHERITANCE OF MINORS AND CONFLICT OF INTEREST. ASPECTS TO TAKE INTO ACCOUNT:
Attached is the Resolution of the DG of Law, Legal Entities and Mediation of the Generalitat de Catalunya, dated February 20, 2023 (DOGC of March 2, 2023). According to it, and by way of summary, the DG reminds us that in the renunciation of an inheritance in favor of minors, the general rule is that it must be formalized in a public deed by the parents, with judicial authorization (art. 236-27 CCCat) or, alternatively, by the two closest relatives (art. 236-30 CCCat). In case of conflict of interest of one of the parents, the renunciation is made by the other parent with the consent of the two relatives. If the conflict of interest affects one of the two relatives, he/she must abstain or, if necessary, the successive relative must be called upon to substitute him/her.
2.- LAND REGISTRY. IT IS NOT POSSIBLE TO REQUEST SIMPLE NOTES NEITHER BY EMAIL NOR BY MEANS OF A DOCUMENT PRESENTED BY TELEMATIC WAY:
Attached are the Resolutions of the DGSJFP of March 27, 2023 (BOE of April 18, 2023) and of March 28, 2023 (BOE of April 18, 2023). According to them, and by way of summary, the DG reminds us that simple notes cannot be requested either by email or by means of a request submitted in a document through the Registry's telematic document filing system. The ordinary way is through the telematic portal of Registradores.org or via Telefax in the case of continuous notes from the Notary's office.
3.- ASSIGNMENT OF PROPERTY IN EXCHANGE FOR A LIFE ANNUITY SECURED BY A CONDITION PRECEDENT AND A REAL RIGHT OF MORTGAGE. YOU CANNOT MORTGAGE WHAT DOES NOT YET BELONG TO YOU:
Attached is the Resolution of the DGSJFP of March 28, 2023 (BOE of April 18, 2023). According to it, and by way of summary, the DG reminds us that you cannot mortgage what is not yet yours. An assignment of a property in exchange for an annuity is formalized in a public deed. Assignor (elderly person), assigns the property to a third party (assignee), in exchange for an annuity. The assignment is formalized with a suspensive condition, so that the transfer of ownership will take place when the assignee party proves that it has paid the agreed pension in full (it is understood that upon the death of the assignor). Likewise (to guarantee that those obliged to pay the pension will pay it), the assignee constitutes a mortgage on said property, in favor of the assignor, as an additional guarantee for the payment of the life annuity. The registration of the mortgage is denied since the condition precedent has not yet been fulfilled, so that the assignees have not yet acquired title to the real estate (condition precedent pending fulfillment) and, therefore, cannot mortgage something that does not yet belong to them.
4.- MORTGAGE AND DOMICILE FOR NOTIFICATION PURPOSES. IT CANNOT BE A FOREIGN DOMICILE:
Attached is the Resolution of the DGSJFP of March 30, 2023 (BOE of April 18, 2023). According to it, and by way of summary, the DG reminds us that when formalizing a real right of mortgage, the deed must contain an address of the debtor for the purpose of notifications and requirements, which must be located in Spain, so that it is not admissible to indicate an address of the debtor abroad, for these purposes.
5.- DEED OF EXTINCTION OF STABLE COUPLE AND DISSOLUTION OF CONDOMINIUM (APARTMENT IN COMMON). IT CAN BE GRANTED WITH MINOR CHILDREN IF COVENANTS THAT AFFECT THE CHILDREN ARE NOT INCLUDED IN THE DEED:
I attach the Resolution of the DG of Law, Legal Entities and Mediation of the Generalitat de Catalunya, dated April 19, 2023 (DOGC of April 24, 2023). According to it, and by way of summary, the DG determines that when there is a stable couple with children and with a house in common, when the stable couple is extinguished by cessation of the cohabitation, although there are those minor children, they can formalize the extinction of the stable couple in the deed and agree in the same one the dissolution of the condominium of the property that they had in common. However, this will only be possible if the deed of termination of the stable partnership does not include measures that affect the children, such as an agreement, a parentality plan, an alimony, or a visitation regime (in which case, logically, it would require judicial authorization).
6.- DEED OF MATERIAL DIVISION OF A PRIVATE ELEMENT OF A PROPERTY SUBJECT TO THE HORIZONTAL PROPERTY REGIME ONLY A SIMPLE MAJORITY IS REQUIRED:
I attach the Resolution of the DG de Dret, Entitats Jurídiques i Mediació de la Generalitat de Catalunya, dated May 5, 2023 (DOGC of May 15, 2023). According to it, and by way of summary, the DG determines that in the case of an old building with a "singular" horizontal division (divided into 4 entities, one of which includes 13 apartments susceptible of individualized use), if the bylaws do not expressly allow it, then the building's bylaws must be modified, if the bylaws do not expressly allow it (in which case no agreement of the Meeting would be required) it is possible to formalize a material division of this entity that includes those 13 floors, in order to create 13 independent registry properties, being only necessary a resolution of the Meeting approved by simple majority (that is, it would not be necessary an agreement with qualified majorities of 4/5).
7.- DEED OF RECTIFICATION OF ERROR (OF SURFACE) IN THE DESCRIPTION OF A PROPERTY (PRIVATE ELEMENT) SUBJECT TO HORIZONTAL PROPERTY REGIME. IT IS NOT REQUIRED DECLARATION OF NEW OLD WORK BY THE COMMUNITY OF PROPRIETORS:
Attached is the Resolution of the DGSJFP, dated April 18, 2023 (BOE of May 8, 2023). According to it, and by way of summary, the DG resolves a case in which an overground floor, registered with a useful surface of 47.51 meters, is rectified to 97 meters (since in fact that was the real and correct surface), by means of a deed granted by the registered owner of that property, based on a cadastral and graphic certification and an architect's report (that accredit that it is an error and that that floor has that surface from the moment of the construction), as well as by means of an agreement of Meeting (adopted by unanimity) that consents to this rectification. In this case, the DG confirms that this deed is sufficient to register the modification of the surface of the apartment, without the need of a deed of declaration of old new construction, by the community of owners, where the description of such element is rectified.
8.- WHEN IN A SUCCESSION THERE IS A RIGHT OF TRANSMISSION, EYE THAT THE CONCURRENCE OF ALL THE INTERESTED PARTIES IN THE INHERITANCE IS REQUIRED FOR THE DELIVERY OF A LEGACY:
Attached is the Resolution of the DGSJFP of April 19, 2023 (BOE of May 8, 2023). According to it, and by way of summary, the DG reminds that, within the framework of the right of transfer, and based on article 1006 of the Civil Code, any operation tending to divide the inheritance to which the transferor is called must be granted by all the interested parties in the succession of the latter (including their legitimated beneficiaries). This is a case in which two deceased persons, in their will, name as heirs their six children (with vulgar substitution in favor of their respective descendants) and, also, order in favor of three of their children legacies of some real estate. Subsequently, one of these children dies, leaving a widow and three children (grandchildren of the first deceased). A deed of delivery of the bequest is granted by the heirs instituted (children of the deceased couple) and also by the transmitting heirs (grandchildren), but the widowed spouse of the deceased son does not intervene, something that the DG interprets that it is indeed necessary, since she is interested in the succession.
9.- IT WILL SOON BE POSSIBLE TO GRANT DEEDS TELEMATICALLY:
Attached is a link to the article recently published in El Periódico (HERE) where the novelties derived from Law 11/2023 are succinctly explained. Based on the same, in short (at the end of November expires the vacatio legis of 6 months), it will be possible to grant certain public documents telematically, that is to say, without the physical presence of the client in the Notary's office. As more news on the practical implementation of the measure becomes available, the staff will be duly informed.
April 2023
1.- CLIENTS CAN IDENTIFY THEMSELVES BEFORE A NOTARY BY MEANS OF THE VALID DRIVING LICENSE OF THE KINGDOM OF SPAIN:
Attached is the Resolution of the DGSJFP of January 16, 2023 (BOE of February 14, 2023). According to this Resolution, and by way of summary, the DG allows an appearing party to identify himself before a Notary Public by means of a valid Spanish driving license, although this resource must be used in a subsidiary or supplementary manner. This means that, ordinarily, in any case, the identification of Spaniards must be made by means of Passport or DNI. However, in a subsidiary manner, the driving license may also be accepted, since it is an official document issued by a public authority, with photograph and signature, which has identification effects.
2.- THE CONSENT OF THE NEW OWNERS OF A PROPERTY SUBJECT TO A HORIZONTAL PROPERTY REGIME IS NECESSARY IN ORDER TO RECORD IN THE PROPERTY REGISTRY AGREEMENTS ADOPTED PRIOR TO THE PURCHASE OF THE PROPERTY THAT HAVE NOT BEEN REGISTERED.
Attached is the Resolution of the DGSJFP of January 31, 2023 (BOE of February 20, 2023).. According to it, and by way of summary, the DG recalls that, as a general rule, if a community of owners adopts an agreement subject to registration in the Land Registry, and subsequently, before such agreement is registered, there are changes of ownership in private elements, in order to achieve the registration of such agreement, the new owners must give their consent. However, in this specific case, being an inheritance, the DG applies the principle of universal succession (article 661 Cc) and allows the registration of the agreement.
3.- IN THE CONTEXT OF AN INHERITANCE, THE SEPARATION OF A MARRIAGE MUST BE RELIABLY PROVEN IN ORDER TO DEPRIVE THE SURVIVING SPOUSE OF HIS OR HER INHERITANCE RIGHTS TO THE RESERVED PORTION OF THE ESTATE.
I attach the Resolution of the DGSJFP of January 24, 2023 (BOE of February 14, 2023). According to it, and by way of summary, the DG reminds us that, in the context of an acceptance of inheritance, in order to formalize the same without the surviving legitimate spouse (as a result of the spouses being separated), it is necessary to prove the separation (by mutual agreement in public deed / judicial resolution of separation or divorce / by ratification of the spouse who does not participate in the partition).
4.- PRECAUTIONS TO BE TAKEN INTO ACCOUNT IN THE ADEQUACY TRIAL WHEN A PREVENTIVE POWER OF ATTORNEY IS USED IN ANTICIPATION OF LOSS OF CAPACITY.
Attached is the Resolution of the DGSJFP of November 4, 2022 (BOE of December 2, 2022). According to it, and by way of summary, the DG determines that in order to be able to use a preventive power of attorney in anticipation of loss of capacity (of the type that only takes effect once the loss of capacity is accredited, not before) a generic sufficiency judgment is not enough as in any kind of power of attorney, but additional requirements will be demanded, namely: a current medical certificate will be required, with indication of date, author, object and an express judgment of the Notary that the principal is in the support situation described for the power of attorney to take effect (and even, in case of doubt, an expert report may be required, which will be assessed in a separate notarial act or, where appropriate, adding the appearance of the principal to assess in situ his situation of need).
5.- JUDICIAL DECISIONS AFFECTING THE CAPACITY OF THE PERSON MUST BE REGISTERED IN THE CIVIL REGISTRY SO THAT THE ACTS DERIVED THEREFROM HAVE ACCESS TO THE PROPERTY REGISTRY.
Attached is the Resolution of the DGSJFP of January 3, 2023 (BOE of February 9, 2023). According to it, and by way of summary, the DG reminds us that the court decision affecting the capacity of a person, in addition to being final, must be registered in the Civil Registry. Without this requirement, the act carried out by the representative will not be able to access the Property Registry.
6.- WHEN THE ECONOMIC REGIME OF THE MARRIAGE IS INDICATED IN A DEED, IT MUST BE DETAILED WHETHER IT IS LEGAL OR CONVENTIONAL.
I attach the Resolution of the DGSJFP of December 20, 2022 (BOE of February 3, 2023). According to it, and by way of summary, the DG reminds us that when indicating the economic regime of the marriage, it is necessary to determine in the deed if such economic-marital regime is legal or agreed (since in case of being agreed, specific rules of management and disposition may have been foreseen, different from the generic ones foreseen in the legal regime of the Code). In addition, if it is an agreed or conventional regime, it must be accredited to the notary by means of the exhibition of the authentic document from which the conventional economic regime results (marriage contracts) with the data of inscription in the competent Civil Registry. It can also be accredited with the certification of marriage of the Civil Registry in whose margin must be noted the granting of the marriage contracts in which the referred conventional matrimonial property regime is agreed, the day of the granting, the authorizing notary and the number of protocol.
7.- NEED FOR THE NOTARY TO EXPRESSLY STATE IN THE NOTARIAL SUFFICIENCY JUDGMENT THE CAVEAT OF SELF-CONTRACTING AND/OR CONFLICT OF INTEREST.
Attached resolution of the DGSJFP of March 9, 2023 (B.O.E. March 27, 2023). In this interesting resolution the DG reiterates once again its doctrine regarding the notarial sufficiency and self-contracting trial, in the sense that precautions must be taken when in the presence of a legal business granted by an attorney-in-fact who in turn intervenes in his own name and right as a party with interests opposed to those of his attorney-in-fact. In the case presented to us in the resolution, the Registrar suspends the registration of a donation in which the donor acts in turn as attorney-in-fact of the donee, without expressly stating in the deed of donation that the power of attorney granted by the donee expressly avoids the figure of self-contracting and/or conflict of interests. The administrative center recalls its already very reiterated doctrine that article 98 of Law 24/2001 exclusively attributes the judgment of sufficiency of the alleged representation to the notary, without the registrar being able to require for his qualification that the document from which the representation is derived be exhibited, accompanied or transcribed. However, when the figure of self-contracting is involved, it is not enough for the notary to state in the deed the notary's judgment of sufficiency, but it will also be necessary for him to clearly state that the authentic document from which the representation (power of attorney) results contemplates the caveat of self-contracting".
8.- APPLICABLE LAW IN MATTERS OF MATRIMONIAL PROPERTY REGIMES WITH INTERNATIONAL ELEMENTS
8.1.- LAW APPLICABLE TO THE MATRIMONIAL PROPERTY REGIME:
- EU Regulation 2016/1103 (HERE) applies, applicable to all marriages entered into as of June 2019, which is universally applicable (it allows to apply even non-EU country laws).
- The Regulation (art. 22) allows the spouses to choose the law applicable to their matrimonial property regime between that of the place of celebration or that of the nationality of either spouse.
- Validity of the agreement: Subject to the formal requirements of each country (consequently, in Spain, a public deed will be required).
- In theabsence of an agreement, the applicable law shall be (art. 26): That of the first habitual residence after marriage, that of the common nationality or that of the closest bond.
- Alsoapplicable to "registered partnerships": stable couples registered in a public registry.
8.2.- LAW APPLICABLE TO THE DIVORCE:
- EU Regulation 1259/2010 (HERE) on applicable divorce law is applicable, which is also universally applicable (even non-EU laws can be applied).
- The Regulation (art. 5) allows the spouses to choose the law applicable to divorce between the law of the place of habitual residence, the law of the last place of habitual residence, the law of the State of which one of the spouses is a national at the time of conclusion of the agreement or the law of the forum.
- Validity of the agreement: Subject to the formal requirements of each country (in Spain, public deed of covenants in anticipation of rupture).
- Inthe absence of an agreement, the criteria of Article 8 of the Regulations shall apply.
