Languages

Ripoll Abogados

07/05/2019

TIME FLIES!

It seems that it was yesterday … but the year was 1995, and I had almost completed my university studies when a colleague told me about a lawyer in Benidorm hunting for a Spanish lawyer who spoke fluent English, or better yet, Norwegian.

Already at that time the summer vacations with my parents and brothers to Benidorm, where my grandmother spent her vacations, awakened my curiosity for the international vocation. The desire to communicate with tall, blond foreigners, so different from me, led me to enrol in a Language school ​​to learn English and French. In those years, the ’80s, the learning of languages ​​in Spain was not of interest to ordinary mortals.

Who would have known that my childhood visits to my grandmother in Benidorm were the origin of what later marked my professional career and, in particular, my immersion into the Norwegian culture?

The lawyer who was looking for a collaborator was Mr. José Luis Ripoll, a Spanish lawyer who for political reasons had emigrated to Norway, during Franco’s time. He came to Norway from Madrid with his law degree just completed, accompanied by what would later be his wife, a young and beautiful Norwegian woman from Skien. Mr. José Luis Ripoll lived in Norway for 25 years. Here he took the master’s degree in sociology and became an Associate Professor in Spanish at the University of Oslo. From his early beginnings at the mother-in-law’s kitchen table, he learned to speak Norwegian better than many Norwegians – and was then also qualified as a publicly authorized translator.

When Franco died at the end of the ’70 he returned to Spain, established his law firm in Benidorm, was appointed honorary Consul of Sweden, and assisted Norwegian citizens until 2005, when he retired. I was so lucky as to be able to work with him from 1995, the last 10 years of his working life. José Luis Ripoll was my “teacher” he taught me everything about Norway, when I still wasn’t sure whether the capital of Norway was Oslo or Stockholm. The only thing he didn’t teach me was Norwegian. But after this many years working with Norwegians my Norwegian is better especially thanks to my good friend Arnfrid that every Tuesday force me to speak about all and everything  – in Norwegian.

I have been a member of the Bar Association since 1993, and this year they honoured me with a commemorative plaque as a thank you for my 25 years as a member of the association. 23 of these have been dedicated to assisting Norwegian citizens with interests in Spain. This is something I feel proud of!

And I did not marry a Norwegian, as many clients ask me, but I did get married and had three children. You experience a lot over 25 years! One of my boys just passed his Norwegian exam, after living as a 15-year-old, in Norway for 1 year with a Norwegian family and playing for the local football team – Urædd. Who knows, maybe one day I’ll have Norwegian grandchildren …

And 25 years have already passed. It is strange contemplating – and I hope I get another 25 years! Working with the Norwegians has been always a pleasure.

 

 

 

 

 

 

08/02/2019

THE LEASING LAW REFORM LASTED LESS THAN A MONTH

THE REFORM OF THE LAW ON RENTALS HAS LASTED ¡¡¡LESS THAN ONE MONTH¡¡¡

The changes introduced in the Law of Leases that came into force on December 19 have been cancelled on January 22.

The Spanish legislative system, as well as that of most of the parliamentary monarchies, provides that the Government, in case of urgent need, may approve a Decree-Law that must be ratified within a month by the Parliament.

When the government is in the minority as it is now, in Spain,  this happens, the Parliament has not ratified the changes. The conclusion is that when it comes to regulating matters that affect a large majority of citizens of basic goods such as housing, prudence is highly recommended.

The Government intended, with the modification, to help the citizen who needs to rent, protecting him so that he could stay there for at least 5 years, among other things. But in addition, the Government must likewise protect the citizen who, often with great economic effort, acquires a home for its temporary or future use, for their children, etc.

The result is that only the rental contracts that have been signed between 19.12.2018 and 22.01.2019 will be regulated by Royal Decree 21/2018. So that, the modifications that we explained in the previous number of Aktuelt Spania and here, such as the extension in favour of the tenant of 5 or 7 years of the contract, instead of 3 will only coMe into force for the contracts signed within this short period.

Contracts signed after January 22, 2019, will continue to have a minimum duration of 3 years and not 5 or 7, if it is the tenant’s permanent home.

In short, that the relations between landlord and tenant, which at first sight seem easy, are not. You have to know the law and always keep in mind that the parties cannot freely negotiate all the agreements as they may become  invalidated.

16/01/2019

NEW RENTAL LAW

The Government has adopted a new concerning housing and renting which, together with other regulations, amends the Urban Leasing Law (LAU). Dating back to 1994, this law has undergone a series of reforms over the years, adapting to today’s social and economic needs.

The new reform aims to strengthen the tenant’s rights in order to be able to cope with the price increase and the lack of affordable housing at affordable prices.

MAXIMUM DURATION

The law, in Article 9, regulates the minimum period for the lease. Although the lease terms are freely agreed upon by the parties, ie the tenant and the landlord, the Act stipulates a minimum period. In this way, if the contract is agreed for a period lower than the legal minimum, the tenant may require that it be extended to this minimum period.

The new regulation changes this minimum period and extends it from 3 years to 5 years, or 7 years if the landlord is a company. Therefore, the minimum period that the tenant can stay in the house is extended to 5 (or 7) years.

EXTENSION OF THE CONTRACT

Article 10, on the extension of the contract after expiration, is also subject to change. Until now, if the tenant or landlord did NOT notified that they would change or renew the contract by it’s expiry date, the extension was automatically extended by 1 year. From now on, this extension period will be 3 years.

DEPOSITUM

To put an end to the abuse of the tenants, the government changed one of the most important articles of the Urban Leasing Law; Article 36. It stated that in addition to the deposit (a guaranteed amount normally equivalent to 1 months rent), the rule stipulated that the landlord and tenant could agree on other forms of guarantee in order that the tenant complied with his obligations on the top of the deposit. This in practice led to abuse of the tenant, where they were asked to pay extra deposit and other expenses / guarantees, which resulted in an additional burden on the tenant.

The new law approved the limitations of these additional guarantees (in practice the deposit) to a maximum of 2 months rent, except for for long-term contracts, thereby limiting the financial burden the tenant must bear.

WHAT GUARANTEE COVERS A SECOND-HAND CAR?

The period of warranty is different if you buy a second hand car from a particular (privately) or from a car dealer.

In the sale of vehicles between individuals, the period to claim against defects or hidden defects is six months.

The first time the decision is made to buy a second-hand car, many drivers have a question: will the vehicle have a guarantee? And if it does, what aspects will that guarantee cover and for how long? Consumers should have complete peace of mind regarding this issue since, in any case, the car will be covered by a guarantee with which the buyer will be protected against possible defects, faults or hidden defects prior to purchase.

Individuals and professionals, both with guarantee

According to current legislation, there are two types of guarantees depending on whether the car is purchased from an individual or a professional. In the first case, when the purchase is made to an individual, it is the Civil Code itself in its articles 1461 and 1484 that is responsible for establishing the framework of the guarantee

Article 1461 shows that “the seller is obliged to deliver and repair the object of the sale”. This means that the car must not have hidden defects and that it must be free of charges or encumbrances, which provides great security to the driver who acquires it.

In this way, in case the buyer detects any hidden defect during the six months after the delivery of the car, the seller will be obliged to repair it. Once a complaint is made and it is proven that the defect is prior to the purchase of the vehicle, the seller either has to pay the amount of the necessary repair or must rescind the purchase-sale contract and return the transaction amount to the buyer. Likewise, the seller must answer for hidden defects even if they were ignored at the time of sale.

It should be remembered that the defects referred to in these articles are those that make it unfit for the use to which it is intended or reduce its use so that, if known, the buyer would not have purchased the vehicle or paid less for it.  In this sense, it is important to bear in mind that the only vices or hidden defects that the buyer may claim are those that already existed prior to the purchase-sale. If the defects or defects appear or manifest after the acquisition, the seller will not be responsible for any reason.

With a professional, up to two years warranty

On the other hand, if the purchase of the second-hand car is made through a professional (ie a second-hand dealer), the coverage of the guarantee is included in the General Law for the Defense of Consumers and Users

As indicated by this law, the seller is obliged to deliver the vehicle to the buyer as it appears in the contract. If the buyer detects any hidden damage during the two years from the date of sale of the car, the professional seller must repair it, return the amount of the sale or replace the car with another of equivalent characteristics. Therefore, the characteristics are similar although the period covered by the guarantee is greater in this case. It must be borne in mind that not every failure or damage allows the buyer to terminate the contract and request a refund of the price paid, the failure must be serious.

Finally, It is highly advisable that the buyer request to the seller a part of damage or other document that proves that the car has been repaired during those first 2 years. Many times, buyers do not have any evidence that they have been taking the car to the car dealer to repair several times.

21/09/2018

THE UNKNOWN NON-RESIDENT INCOME TAX

Most owners of properties in Spain are not aware that they have an “imaginary” income when they own a property in Spain, which is not their main residency, meaning that Spain is not their country of residence.

Non-residents remain subject to this tax because, by definition, Spain is not their principal residence.

The imaginary income is the 2% or the 1.1% of the rated value of the property, which is stated in the Property Tax bill (IBI), just as if you had received this imaginary income in cash. The tax rate is 19%. The income is understood to accrue once a year on the 31st December and the filing period is throughout the calendar year following the year of accrual. Up to the 31st of  December is time to declare for the “income” received in 2017.

Bear in mind that filing the Form 210 and paying the tax does not come directly from the Tax Ministry as with the Property Tax. Every owner of a property in Spain, which is not its principal residence, should be diligent, fill the Form and pay the tax of his own initiative.

The Spanish Tax Ministry (Agencia Estatal de la Administración Tributaria) is the competent authority to collect this Non-Resident Income Tax.

However, some owners of properties think that they are up to date with their tax obligations in Spain because they pay the Property Tax, direct debit from their bank account.

The  Non-Resident Income Tax  is different from the “Property Tax”, which is a local tax that is levied by the Town-Halls (not by the Tax Ministry)  and it is billed directly and sent automatically to the owners on a annual basis, usually from June-July  until September-October through SUMA, the collection authority depending on the regional government.

19/09/2018

THE IMPORTANCE OF A WILL

As long as you have a property in Spain, even though you are not a resident in this country, it is very practical to plan your inheritance in order to make it easier for your loved ones before you leave.

Making a will turns to be highly advisable in case you are a resident in Spain.

The reason for that is that the Ruling nr. 650/2012 from the European Parliament has changed from earlier, for those who died after 17th august 2015. According to this Ruling, your estate (no matter if the assets are located in Spain or not) will be governed by the law of your residence (Spanish law), unless you chose in your will that your estate should be governed by the law of your nationality.As an  example; in case you and your wife are from UK but you both live in Spain regularly, your assets could be divided in a way that you did not intend for example your heirs (children) receive most of your assets and your spouse is not allowed to take over the assets. This could be avoid by making a will stating expressly that your testament will be governed by the law of your country.

Inheritance planning is beneficial both to save taxes for your heirs and to distribute your goods between them according to your will, whilst respecting the laws.

In case you have already make a will in Spain, you should check if you have clearly chosen the law governing your estate. If not, it is advisable to make a new will, especially if you are a resident in Spain.

The testament must be done before a notary. He will send the testament to a Central Register of wills in Madrid, so that when you die, and not before, your heirs will have access to the testament, even though they do not know whether you made a will or not, or where you did it.

A lawyer will advise you how to do the testament so that the assets will be distributed according to what you want and also assist you in reducing the taxes your heirs must pay in Spain.

HOW MUCH YOU DECLARE

It was formerly a common practice in Spain to declare a property sales price at a much lower than its real price in order to save money on transfer tax. The tax is always a percentage on the price.

If Tax authorities believe that your purchase is undervalued, they may send you a notice that the price has been re-assessed by them, along with a bill for how much extra tax you owe in concept of Transfer Tax.

First recommendation it is that you always set in the deed the real price you are paying to buy the property. No matter if the seller or, the agent recommends you to set a lower price to “save” taxes.

Even though the price in the Deed is the real price you are paying to buy the property, the tax authorities may consider that the market value of that property is higher. Therefore, they may send you a claim to pay the tax according to the market value they consider.

This re-assignment of value is based on market researches. They cannot afford to send a proper valuator to each property in every transaction to find out individually, the market value.

The Court of Justice of the Valencian Community and the Supreme Court in Madrid ruled, once more, that the Tax authorities could no longer asses a different value than the one declared by the seller and purchaser in the deed, as long as they do not engage a valuator who examines the property on site. This ruling is based on the idea of that, the primary purpose of a valuation is to recognize the asset on what the valuation is based on, as it is extremely difficult to evaluate accurately the building and the maintenance conditions of property without a preliminary recognition on site.

Many purchasers simply pay when they receive the letter from the tax authorities, even though they never declared a lower value than the real price they paid for the property. The reason for it is that they ask to the one who assist them when they bought, usually a real estate agent whereas it is a lawyer or, a tax advisor, the professional who will give you the best advice on legal and tax issues.

You always have the opportunity to contest the value assessed by the Tax authorities with no consequences, other than you will not have to pay the extra tax. A lawyer, expert on these type of matters, should make the claim. Ask a lawyer when you receive any notice from the tax authorities. They may save you a lot of money. This is a good example that the professional advice worth much more than what it costs.

SOME BRUSHSTROKES ON INHERITANCE TAX IN SPAIN

Spanish inheritance tax is payable if:

  • The deceased  was resident in Spain, or

The assets being inherited on death are in Spain even though the deceased was not a resident in Spain.

Inheritance tax is paid by the recipient. The tax rates payable are based on:

  • The family relationship of the recipient to the deceased
  • The wealth of the recipient prior to the transfer

There are some important exemptions on the taxable base and reductions on the tax fee that are different for each region of Spain.

The general principle is that the closer the family relation from the inheritor to the deceased, the less inheritance tax is to be paid.

In the Valencia region there is an exemption of 100.000.-€ per inheritor, provided that they belong to the closest family to the deceased, husband, wife, children or parents. This is a reduction in the taxable base, meaning that if, as an example, the deceased had a house in Spain, valued 200.000.-€, and the beneficiaries are 2 children, they will not have to pay inheritance tax as they will receive  an inheritance valued at 100.000.-€ each.

For uncles, cousins and nephews the exemption is just 8.000.-€ (in round figures).

For other relatives, or those not related at all, there are no exemptions.

It may be that the house is exempt from the Spanish inheritance tax if the deceased was a tax resident in Spain and the beneficiaries are either the spouse or children or even a relative over 65 years of age, under some conditions. In all these cases, the inheritor cannot sell the house for 5 years from the date of death to benefit from a reduction in the taxable base of 95%.

However, the law requires all inheritors to make the inheritance tax declaration within six months from the death. Even if there is no tax to pay, because the beneficiaries have benefitted from the above relationship exemptions.

The Valencian Community has its own tax scale. The tax rates is set from 7,65 % on the estate value, up to 34% when the estate value is more than 781.000.-€ (in round figures)

If, despite the reductions in the taxable base, there is a tax fee to pay, there is also a bonus of 95% or 50% of the tax fee depending on the family relationship with the deceased, closest family or not.

You can also gift a property to your inheritors while you are still living, perhaps reserving the right to inhabit the property for as long as you live, but remember that the recipient of the gift is also subject to the Spanish gift tax.

WHAT IS IT AN “OLD” NEW WORK?

This is one of the occasions where we find it difficult explaining a concept to our customers. When we say that “in order to match the description of your property to that described in your Title Deed, you have to make a declaration of new work”; “What’s new in my house, which has not been built for years and we have no problems?” … they usually ask, to which we have to reply it is an “old new work”.

What is a “new work”?

Obviously, everyone will understand what a “new work” is, is one that is being built or has just been finished; nevertheless, in the language of the law “new work” is all work without a trail, it does not exist according to the legal papers or it isn’t inscribed in the land registry (yet).

In other words, there are two types of declaration of “new work”:

  • “New work” in reality, which are those that are being built or have just been built (intent to inscribe)
  • “New work” for the world of the Property Registry, which is any existing work in reality and which should have been inscribed in the Property Registry, regardless of when it has been built. As an example, when the owner bought a house 20 years ago and afterwards he built a swimming-pool, a barbecue, a terrace, a new floor or a garage for example but, he did not reflect these changes in the deed, and therefore, they do not appear in the Property Registry (not inscribed)

The declaration of “new work” is a manifestation made in a public deed in which the owner or owners of a property state that, in that property, a building has been made or is being built, or it reflects an improvement of the property, with the purpose that said work is registered in the Property Registry.

Why register work in the Property Pegistry?

Well, there are some arguments beyond the fact that the Bank imposes it on you to sign a mortgage loan, because it is more than obvious whether the work is declared or not in the Property Registry, the work exists, and obviously belongs to the owner.

If you ever decide to sell the property the new owner will certainly wish to have all the existing work existing also declared in the deed.

However, if you do not declare the work and register it in the Land Registry, remember that: the one who buys does not have to assume those expenses; and that numerous appraisers condition the valuations to the new work being declared, being that the bank without appraisal does not grant mortgage loans.

To understand me, it is similar to trying to sell a car without papers, obviously, you can sell it, but the price will be lower: first because sorting through the documentation of the car is costly and a nuisance; but also, because there may be someone who doubts that the new work complies with the law.

It is strongly advisable to declare all the existing works in your property, included all in your deed and also, it is advisable not to wait until you sell the house to declare all the existing works because the planning regulations changes and it may happen that at the moment you decide to legalize all the works, in the sense of including them and updating your deed, this is no longer possible and then, you may face difficulties with selling your house.

The lawyer and the notary are the competent professionals in Spain to advise you in this process.

 

06/07/2018

BUYING A HOME IN SPAIN WITH 0 RISK IT IS PERFECTLY POSSIBLE!

After 23 years of assisting Norwegians with the purchase of homes and land in Spain we can confirm that it is perfectly possible to invest your savings and purchase properties in Spain with absolutely no risk!

First and most important advice is Do Not Be In A Hurry! Probably, it has taken years to gather enough money to buy a house in Spain, and you should not spend it in just a few days. Take it easy. Spain is a very good place to invest your money and to spend most part of the year under the sunshine. But please be calm. The purchase of a property usually happens two or three times, at most, throughout a lifetime. It is worthwhile making this enormous investment with patience, security and calmness.

We realize that this is not always easy. Some vendors and some agents are extremely eager to close the deal when you have shown some interest in a property. The argument we always hear is that there is another interested purchaser eager to pay the deposit immediately so that if you wait too long you will lose the house.  This has been always the same through the years.  Even in times when the real estate sector was absolutely paralyzed in Spain. Moreover, we can say that, the fewer sales, the more pressure on buyers to sign the contract and make the first payment.

Keep in mind, that the first contract, the initial contract in which you make the first payment is absolutely binding in all its terms, price and conditions. Once that first contract is signed, you may not have the option to back out even if you discover that the house is not what you expected or, that there are some legal troubles affecting that property. The provisions in the contract might not be sufficient to cancel the contract and specially, to get your money back if the vendor do not agree with you.  It may also be that the seller has made new constructions on the property, pool, garage or barbecue but that they never declared the new work done, and they do not appear in the title deed. You may face problems if you want to sell again and you are not able to add them to the deed because planning regulations have changed and it is no longer possible to extend the property legally. This is quite frequent.

Therefore, our advice is that before signing any contract or paying any moneys let a professional check ALL the legal conditions of the property, by asking for the information to the Town-Hall, Suma, Land Registry, Catastro, Community of owners etc. The reply from these institutions is not always as fast as expected. It can take days and weeks.

The provisions in the contract that the vendor will pay you back the money in case something is not in order, is not a sufficient guarantee.  Your reason to not complete the purchase should be enough reason for you to cancel the sale. It may not be. Even more, the seller could compel you to buy even though you discover that you do not want that property.

The conclusion is that it is perfectly possible to buy in Spain without risk provided you engage a professional and expect it takes time to control the legality of the operation and draft a contract that is best in your particular case. Each client and each transaction needs its own particular contract. The professional, a lawyer, is the only one able to evaluate that  the conditions in the contract cover all your interests.

We do not try to alarm you. On the contrary, we have assisted in thousands of transactions during more than 25 years with no unpleasant surprises, we just ask for time to do the job. Let the professionals work. Sometimes we have to not only fight against the vendor or the real estate agent but, also with our own client, eager to close the deal as soon as possible.  We have a lot of responsibility if something goes wrong.

The main question is:  What do you prefer?

  1. To risk that someone else goes ahead with the purchase (what happens very seldom, but may off course happen)?  or,
  2. To risk your money and your peaceful dream? There are thousands of properties for sale in Spain.