Spain: The notarial certificate prior to the signing of mortgages is two years old

 

On June 16, two years have passed since the Law 5/2019, of March 15, regulating Real Estate Credit Contracts came into action, and therefore, two years since the Transparency Acts walk with firm step.

The Notarial certificate prior to the signing of the mortgages, the Transparency Act, is the notarial document that guarantees that whoever is going to sign a mortgage loan has received all the documentation and information necessary to understand the scope of the obligations that they are assuming.

The purpose of this Law on Real Estate Credit Contracts was to transpose Directive 2014/17 / EU of the European Parliament and of the Council, of February 4, 2014 and sought to recover the confidence of borrowers in the banking system and in particular, in mortgage loans.

Its objective was to promote legal certainty, transparency and understanding of contracts and their clauses, as well as the search for the right balance between the parties.

One of its most relevant aspects for the protection of citizens has been the signing of the Notarial Transparency Act after the mandatory prior advice that the borrower must receive from the notary.

In practice, it means that, in addition to the information that the lender can and should provide, it will be the notary who, with a minimum notice of 14 days in Catalonia and 10 days in the rest of Spain, prior to signing the mortgage. Not only report, but also make sure that the information provided has been understood and that all the documentation specified in the standard has been received.

This prior information must be received by the borrower, but also by the guarantor or guarantor when this is a natural person.

The Transparency Act is enforceable in loans with a mortgage guarantee or other real right on a property for residential use; This expression includes a broad meaning of the concept of residence , thus, home, garage, storage room or any other element that can fulfill a domestic function.

And it is also required for loans that are intended to acquire or retain property rights over land or other real estate as long as the buyer is a consumer.

The doubts that the future borrower faces usually revolve around the interests, both ordinary and late, especially if they are fixed or variable, and in this case, the index to which they are referenced. In relation to variable interests, the notary has the obligation to carry out different calculations or simulations of what may happen.

Doubts also arise in relation to the different types of commissions (early repayment, non-payment of fees…), and in relation to the importance of the appraisal value in the event of an auction and when and how it can take place.

When the notary authorizes a transparency act in which he states that the buyer has received all the necessary information and that it complies with the law, and also that he has understood the scope of the main clauses of the contract, he is also closing the door to possible judicial claims of nullity of certain clauses due to lack of transparency, abusiveness, or imbalance in benefits. With this, bank credit is strengthened and the possibility that opposition will flourish in the heart of a foreclosure decreases.

If the legal requirements are not met, the notary does not authorize a positive Transparency Act. In this case, the mortgage loan, and therefore the planned sale, cannot take place under the previously agreed terms, so a renegotiation with the bank and a change in the credit conditions will be necessary.

It is the function of the lawyers to advise future buyers not only in the terms of the purchase and sale contracts, but also in the negotiations with the banks for the granting of mortgage loans so that, when the prior meeting with the notary is held, we can guarantee to the client that the Transparency Act will be positive and that there will be no problem or delay in signing the desired acquisition.

Catalonia is one of the autonomous communities – together with the Basque Country and La Rioja - where the fewest Non-Transparency Acts have been signed since the Law came into force, only 8%.

 

For further information, please contact:

Glória Vinyals, Lawyer

Bufete Mañá-Krier-Elvira, Barcelona

e: gv@bmk.es

t: +34 93 4878030

 

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