Blog / News

Dual residency and hogwash

Raymundo Larraín Nesbitt, August, 11. 2020

Marbella-based Larraín Nesbitt Abogados (LNA) has over 17 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2020. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer - Abogado
11th of August 2020

 

Speaking with colleagues this week on residency, the topic on dual residency came up. It would seem some advisers, with vested interests, are peddling the idea that UK nationals can attain the best of both worlds: dual residency.

The idea behind this is that you should sign up for Spanish residency, before the end of the Brexit Transition period, and at the same time you would continue to live and pay taxes in the United Kingdom as normal. It's the best of both worlds, as in theory you only pay tax in the UK but you override all the pesky post-Brexit passport and immigration controls into the Union.

Unfortunately, back in the real world, things don’t work out like this. Although in theory admin residency and tax residency are two separate legal concepts, in practice they go hand in hand; when you apply for Spanish (admin) residency you eventually become a Spanish tax resident, whether you want it or not. You will be taxed on your worldwide income and assets, including those in the UK.

What few people realize is that Spanish Immigration Authorities proactively monitor all successful applicants, meaning they ensure applicants continue to meet the conditions even after they have been granted residency. The implication of this is that if you file for Spanish residency, and then fly back to the UK and resume your life there, your residency permit in Spain may be withdrawn. If you no longer meet the conditions for residency and are found wanting, they will strip it off from you.

Anyone who thinks they can land a Spanish residency and then march off back to the UK and continue about their lives there as if nothing had changed is being delusional.

Bottom line, if you don’t fancy becoming tax resident in Spain, don’t sign up for Spanish residency. Attaining residency implies you live in Spain all year round, not just when it's convenient for you. And the tax implication of living in Spain all year round is that you are now regarded as tax resident.

You can’t always get what you want (well, unless you're Mick Jagger).

 

LNA has a 100% track record attaining Spanish residency.

At LNA we assist UK nationals to apply for Spanish residency for the first time, or renewals, for a very competitive fee. You will be assigned an in-house specialist to deal with your matter. Call or email us free of compromise. We only deal with residency permits on the Costa del Sol (Malaga province).

Larraín Nesbitt Abogados, small on fees, big on service.

Larraín Nesbitt Abogados is a law firm specialized in residency, taxation, conveyancing, inheritance, and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form.

Immigration & Residency services available from Larraín Nesbitt Abogados

 

 Residency-related articles

 

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

... Read more

Squatters overrun Spanish properties

Raymundo Larraín Nesbitt, July, 29. 2020

Marbella-based Larraín Nesbitt Abogados has over 17 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2020. Plagiarism will be criminally prosecuted.

Inset image: occupied mansion displaying the international squatter symbol

 

By Raymundo Larraín Nesbitt
Lawyer - Abogado
1st of August 2020

As a result of Spain’s challenging financial situation, brought about by the Covid-19 pandemic, we are witnessing several consequences.

One of them, is the untrammelled growth of squatters all over Spain, which is reaching alarming levels. It is estimated there are over 100,000 properties occupied by squatters in Spain (source).

Spain’s press reports the squatter problem has increased by over 300% since the virus outbreak in March, this is unprecedented. Over 40 police reports are being filed on a daily basis and this figure continues to grow unbridled, month after month.

There are a number of reasons for this explosive squatter growth. Briefly:

  • Dire financial situation which has seen the unemployment rate jump over 40% (an all-time-high which eerily echoes Depression-era levels), in real terms, if you factor in the 4.7 mn unemployed with ERTEs who haven't worked for 6 months. The 'official' unemployment rate is 15.6%.
  • National and regional hard-left wing Administrations pro-squatter movement. Some high-ranking politicians, now in office, have in fact been active militants of this movement in their youth, openly abetting and encouraging it.
  • The lockdown has restricted movement from property owners from all over Europe, who have left their properties standing empty for long periods of time unchecked.
  • Outdated and lax legal framework devised to protect squatter’s rights (!) and punish owners.
  • Out-of-control immigration policy from non-EU countries. I.e. last Friday 24th of July 418 non-EU immigrants landed on beaches in Murcia, of which several were Covid-19 carriers. Murcia is one of 50 provinces that constitute Spain... when you tally in all the immigrants, across all fifty provinces, that arrive every day unfettered you start to get the big picture.

 

Although initially the squatter movement was guided by lofty ideals, and only targeted bank-owned repossessions in large cities which stood empty, particularly in Barcelona, they have now evolved to boldly break into Spanish resident’s main homes. The new trend we’ve picked up on is that they are now also actively targeting overseas expat's homes (second homes) located on the costas, even large luxury villas.

Marbella, Estepona, Benahavis, etc have all been hit by this nuisance on the Costa del Sol. No longer are squatters being picky discriminating on whom owns the property based on lofty ideals, or being put off by breaking into luxury developments; they now break-in into any empty property they fancy, especially expats’.

As a result of this rampant wave of squatters, a new market need has emerged. We have partnered with a reputable company, that employs ex-policemen, and specializes in ousting squatters legally. It is of extreme importance you contact us within the first 24 hours of them breaking into your property.

If you have squatters occupying your property on the Costa del Sol (Malaga), contact us ASAP. We will get rid of them swiftly and put an end to your growing nightmare for a very reasonable fee.

 

 

Larraín Nesbitt Lawyers, small on fees, big on service.

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, inheritance, taxation and litigation. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form.

  

Related articles

 

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

... Read more

European Court of Justice rules that mortgage set up expenses are to be repaid in full to borrowers

Raymundo Larraín Nesbitt, July, 21. 2020

Marbella-based Larraín Nesbitt Abogados has over 17 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2020. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer - Abogado
21st of July 2020

 

The ECJ has delivered, once more, a severe blow to Spanish banks with its 16th of July ruling. It forces Spanish lenders to refund borrowers with all the set up costs in mortgage loans which clauses are deemed abusive. If there is a clause in a mortgage deed whereby it is stipulated that all mortgage set up expenses (and also cancellation ones) are to be paid solely by a borrower, and is deemed abusive, all such expenses need to be refunded in full to borrowers.

The EUs High Court ruling comes on the back of two queries raised from loans granted by BBVA and Caixabank.

As a result, it determines that if a clause is deemed abusive by a judge, a national judge cannot oppose the full refund of the setup charges to a borrower unless there is a national provision that opposes it.

Following this ruling, eight million borrowers stand to be refunded (in full):

  • Notary fees
  • Land Registry fees
  • Gestoria fees

 

The ECJs ruling also goes on to add that it expressly opposes borrowers acting as litigants to pay or co-pay the procedural expenses of such court cases on being brought forward. This proves key as well, as it frees up litigants to litigate without fear of retribution on having to pay for litigation expenses on bringing such cases forward. Needless to say, this new ruling opens the floodgate of even more litigation against Spanish lenders.

The ECJ has once more boldly corrected Spain’s Supreme Court jurisprudence on such matters.

Kudos to our EU overlords on its fair ruling.

 

 

Larraín Nesbitt Lawyers, small on fees, big on service.

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, inheritance, taxation and litigation. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form.

 

Legal services Larraín Nesbitt Abogados can offer you

 

Mortgage-related articles

 

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

... Read more

British nationals: Changes to Spanish Residency

Raymundo Larraín Nesbitt, July, 7. 2020

Solicitor Raymundo Larraín explains to us the new sweeping changes in Spanish residency for British nationals that came into force as from the 6th July 2020. These changes apply nationwide.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 17 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

DISCLAIMER: the new residency procedure has some grey areas that still require official confirmation. Until such time, some of the below-listed points are subject to change. This post will be edited accordingly as new information becomes available.

Inset photo: new TIE card

EDIT (06-07-2020): new residency changes apply to all of Spain as from 06-07-2020

EDIT (07-07-2020): added 3-month deadline for existing residency permit holders to swap green cards for new TIE cards

Article copyrighted © 2020. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
Friday 3rd of July 2020

The following blog post applies only to UK nationals.

There was a bit of a commotion early on this week when all appointments made by UK nationals were cancelled on Wednesday across all police stations on the CDS.

Due to Brexit, a new two-tier system has been brought into place on applying for Spanish residency.

The changes listed below apply nationwide.

  1. New applicants

Newly arrived applicants will have all their residency applications handled directly from the capital of each province they wish to relocate to i.e. on the Costa del Sol they will all be handled directly from Malaga. Going forward, police stations and Centros de Extranjeria no longer deal with new applications. Any appointment made will be cancelled.

The requirements new applicants need to meet vary depending on each individual case, which is why we won’t go into specifics. You will receive a TIE card (see inset photo above).

We strongly advise all UK nationals applying for a residency permit in Spain for the first time, to take full advantage of the transition period and apply now before year’s end. The application requirements will change drastically as from the 01/01/2021, becoming very stringent, as you will be treated as a non-EU national. Many will not qualify as from 2021.

  1. Existing residency permit holders: Swap you green cards for new TIE cards

We must distinguish between those that hold a 2 or 5-year residency permit. In both cases, their residency applications and renewals work the same as before – no changes until the 31/12/20. The new TIE card supersedes previous green cards.

They are regarded, for the time being, as EU nationals until the 31st December 2020.

It is strongly advised that all UK nationals who are already on a two or five-year residency permit, take full advantage of the transition period, and apply now for a new TIE card before the end of this year. After 31/12/2021, you only have a 3-month deadline to apply for your new TIE card and you must be able to justify why you did not apply for it during the transition period.

TIE cards and Transition Period

Last June, Spain abolished its four-tier system for TIE cards and has now simplified it down to only two cards. All UK nationals on applying for Spanish residency, or for renewal, will be given a card for nationals of third countries (see inset photo).

At LNA, we can assist you to apply for Spanish residency for the first time, or renewals, for a very competitive fee. You will be assigned an in-house specialist to deal with your matter. Call or email us free of compromise. We only deal with residency permits on the Costa del Sol (Malaga province).

Larraín Nesbitt Abogados, small on fees, big on service.

Larraín Nesbitt Abogados is a law firm specialized in conveyancing, inheritance, taxation, and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form.

Immigration & Residency services available from Larraín Nesbitt Abogados (LNA)

 

 Residency-related articles

 

Article originally posted on Spanish Property Insight: British nationals: Changes to Spanish Residency - 3rd July 2020

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

... Read more

Spanish Government to Raise Taxes

Raymundo Larraín Nesbitt, July, 1. 2020

In a bid to combat Covid-19’s severe social and financial repercussions, the Spanish Government seeks to raise 80bn euros through a drastic increase in taxation across the board. Lawyer Raymundo Larrain briefly explains to us what these planned changes are and what you should do to protect your assets.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 17 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

 

Article copyrighted © 2020. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
8th of June 2020

I’m going to briefly write on the wide impact these proposed tax changes will have, with specific focus in inheritance tax and wealth tax, which is what mostly affects expats. There is no point in reviewing all the other proposed tax changes as most of them will not affect non-residents.

I will preface the article with a rambling on my take on this planned tax change, feel free to skip it and get to the point. So, please indulge me and kindly excuse my digression which I find most necessary given the convulsed times we are now living in.

Introduction

The communist partners of Spain’s ruling coalition (UNIDAS PODEMOS) unveiled in May a new tax proposal called “Horizonte País” (a 419-page economic manifesto) which constitutes an unprecedented tax hike that aims to rake in an extra 80 billion euros; that’s billion, with a ’b’. Never in Spain’s young 45-year-old Democracy had such an ambitious tax haul been implemented. I stress this is a proposal, it still needs approval.

The hard-left wing coalition claims nonchalantly this tax hike is aimed only at the super-rich and large companies appealing to lofty ideals of solidarity amid a global pandemic. By this, they mean a reduced collective of around 6,000 individuals (what we commonly refer to as HNWI and UHNWI). Although this on paper sounds good and well, it is a common fallacy; particularly from left-wing apologists, that I’ve heard time and time again over the years in Spain. The fact of the matter is, as I’ve pointed out repeatedly and practical experience shows, the burden of a much-vaunted tax rise is brunt foremost by Spain’s middle class and SME's, not by the ‘rich’. Take as an example Wealth tax. I can almost guarantee you that over 99% of those who pay this tax in Spain are not affluent but simply hard-working class. HNWI and large corporations have the motivation, the means, and the legal and fiscal knowledge to neatly circumvent such tax increases without a blink. Make no mistake, this unprecedented tax rise will be paid foremost by Spain’s struggling middle class and SME's in the midst of the most challenging financial context over the last 100 years (understatement).

One of the many untold victims of this virus outbreak has been the middle class. The middle class, as I’ve written countless times over the years, constitutes the cornerstone of all western democracies. They are the ones that shoulder the tax burden of society and contribute towards its political stability. There can be no strong democracy without a strong middle class. One of the (many) nasty effects of Covid-19 is that it has induced a severe recession on us that is decimating Spain’s middle class. Never in history have we witnessed such rapid destruction of the middle class, not only in Spain, albeit worldwide. Millions of people have lost their jobs, and millions more are sitting at home in the hope of being paid the ERTEs called in by their employers.

As written, the hard-working middle class is what gives a country its political stability, it is democracy’s backbone; lose it, and the country becomes polarized, delivering us into political instability with social strife becoming rife. Spain’s companies are over 90% SMEs. In truth, Spain has very few large corporations compared to other developed economies, relying heavily on tourism (16% GDP), hospitality industry (6%), and construction (6%). An untamed tax hike could obliterate SMEs in the thousands, compounding job losses furthermore, paving the way for nationalisms (read separatists) and extremist political movements. An unbridled tax increase, at such an inopportune financial moment, could potentially tip Spain’s economy off the edge, wiping out the middle class, and destabilizing the whole country as a result for decades to come.

Take Argentina, for example. At the end of WWII it was one of the most stable countries in South America, believe it or not. It boasted the largest middle class in the continent. In fact, Argentina was known at the time as the ‘granero del mundo’ or breadbasket of the world as it had such a large food surplus that it exported it to other countries (and at times even generously gifted it, such as to hunger-stricken Spain during its devastating post-civil war that ravaged the country). It had the highest income per capita of all South America. A country rich in natural resources seemed destined for greatness. Alas, successive governments adopted a series of ill-advised economic policies that decimated its middle class and led the country to file for bankruptcy, time and time again. I believe, as I write these lines, they are about to default for the seventh time in the last 70 years. Nowadays no one who thinks of Argentina associates it with the term ‘stability’, quite the opposite. The deleterious consequences of poor decision-making roll forward for decades. Argentina is a prime example of what can happen to a strong country if the (economic) policies adopted by its ruling class push it over the edge.

At a time when ailing families and companies are struggling to make ends meet in Spain, (drastically) raising taxes doesn’t seem to my mind like the right approach. I don’t think it takes a Ph.D. in Economics – like the one our president has – to realize it is only common sense to lower taxes in such a dire financial context to attract foreign investments and foster job creation. Raising taxes, at such a delicate time, is counterproductive, and could further exacerbate and compound the dramatic financial situation we are in, tipping us into a full-blown II Great Depression, God forbid.

Take Germany, for example. The Union’s leading economy has adopted a cautious stance lowering VAT on food for example, from 19% to only 7% in a bid to prop up ailing businesses. This, to my mind, is the right approach to tackle this severe crisis. You need to give companies and individuals tax breaks, allow them breathing space over the next 12 months, at least, until a cure is hopefully found, and we get back to ‘normal’.

Spain, on the other hand, has instead opted for the ostrich approach; burying its head in the sand and ignoring the elephant in the room. It has forbidden, yes forbidden, companies to lay off employees! It has also forbidden companies to file for bankruptcy!! While they are at it, they should also forbid people to die from the virus. Maybe that would help to massage the soaring numbers of our high death toll.

Bottom line, if you help struggling small businesses, you will save millions of jobs in the process. It is not so hard to understand. A drastic tax increase is not the way out of the woods and may unleash an unmitigated disaster. There has to be a resolute political will to make this happen, I’m thinking along the lines of Roosevelt’s New Deal; an EU-wide concerted supranational effort to fight a common crisis together, as one. No country can hope to win this battle on their own, least of all Spain. If the Union truly aspires to be Churchill’s “United States of Europe,” it better get its act together and start acting as one. You need to put your money where your mouth is.

“In union, there is strength.” (Aesop).

As it stands now, the fate of Spain’s middle class lies squarely in the hands of our socio-communist politicians. Through their actions (or inactions), they will either contribute to decimate Spain’s middle class or help preserve it.

“70% of society is only three payrolls away from poverty.”

Wealth tax

Mark Stücklin, had already masterfully covered this point in-depth, and frankly, I do not feel I can contribute much more. So, please read his article on the new proposed tax measures: Thousands of second-homes in Spain would be hit by a new tax on “large fortunes” proposed by the coalition government’s far-left Podemos party – 14th May 2020.

Spanish Inheritance Tax – proposed changes

As I had been pointing over the last 15 years, there has been an ongoing trend to suppress inheritance tax in Spain, led by centre-right wing political groups. Several regions in Spain have in practice abolished it, being Andalusia the most recent one to join this bandwagon in 2019. I had covered these groundbreaking tax changes in several articles:

 

In practice, these changes in IHT have resulted in expats paying little to no inheritance tax, which is always a welcome respite.

However, Spain’s newly elected socio-communist coalition wants to put an end to this and rein in devolved tax competencies from all regions, centralising them. It plans to enact a new law this year on inheritance tax that would apply a uniform tax rate nationwide. They propose to quash all lenient regional tax allowances that currently make taxpayers pay almost nil in both IHT & Gift tax.

If they go ahead with these plans, the taxation of inheritances of Spanish estates will skyrocket. No longer will expats (or Spanish residents) face nil IHT & Gift bills, as has been the case in most regions over the last decade.

What to do? Take pre-emptive action now, whilst you can!

Affluent Spaniards, in view of the proposed tax changes, have been busy taking action over the last month, seeking tax advice from lawyers and tax advisors – and you should do the same.

Regarding inheritance tax, as we have pointed out in several taxation articles, you should consider moves to pre-empt this potential draconian tax increase such as gifting properties to your loved ones (spouse, children) and benefit from the ultra-low tax allowances currently in place whilst they last paying little to no tax. Because once they are gone, they are gone; likely by year’s end.

You need to instruct a lawyer to legally formalize gifting assets and money to your loved ones, as this can only be done through a deed witnessed by a notary public to benefit from the highlighted tax advantages that result in an almost zero taxation.

To close, don’t attempt to do this on your own, unrepresented by a lawyer, or you will likely end up like one of this week’s legal queries we received that must now face over 26,000 euros in tax because he failed to seek legal counsel before acting. Had he spoken to us before, he would have paid under 300 euros in tax on being gifted hundreds of thousands of euros.

Conclusion

We strongly urge expats and residents, with assets in Spain, to seek immediate tax advice from their lawyers and tax advisors and look for ways, within the law, to mitigate exposure to the proposed tax changes, namely IHT and wealth tax.

At LNA, we can assist you advising and re-arranging your business and property holdings in Spain to mitigate exposure to these taxes, regardless of your property’s location, we act nationwide. We have 17 years’ taxation experience at your service, ask us free of compromise.

Larraín Nesbitt Abogados, small on fees, big on service.

L’art de l’imposition consiste à plumer l’oie pour obtenir le plus possible de plumes avec le moins possible de cris.” – Jean Baptiste Colbert.

French economist and Finance Minister under King Louis XIV.

Loosely translated as: “The art of taxation consists in so plucking the goose as to obtain the largest possible number of feathers with the smallest possible amount of hissing.”

Legal services Larraín Nesbitt Lawyers offer you

 

Inheritance tax related articles and blog posts

 

Article originally published in Spanish Property Insight: Spanish government to raise taxes so get prepared - 8th June 2020

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

... Read more

How to formally end long-term lease agreements in Spain (Part II) - Keys handover

Raymundo Larraín Nesbitt, June, 21. 2020

Marbella-based Larraín Nesbitt Lawyers has over 17 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2019, 2020. Plagiarism will be criminally prosecuted.

 

Introduction

Today’s blog post is the second part on how to formally end-long-term lease agreements in Spain.

In the first part, we dealt with serving your landlord legal notice of contractual termination.

In this second part, we’ll deal with the formal procedure to hand back the keys.

While most people may think this is rather straightforward, the fact is that if you do it wrong, your landlord will pocket your security deposit; or even worse, you may trigger an unwanted extension to your lease agreement (more money owed)! Handing back the keys is likely the most aggravating time you will endure throughout a tenancy, as both sides stand much to lose much if done incorrectly.

The reason on why so many tenants in Spain complain they don’t recover their rental deposit is because they fail to hand over the keys properly. Below we explain step-by-step the procedure to do it right.

We had already covered in-depth how to formally terminate a lease agreement in Spain. Again, we stress that phone calls, e-mails, text messages, WhatsApp, social media messages, conversations, etc are not valid ways in law to terminate a lease agreement. It must be done formally following a set legal procedure. If you do this wrong, it will have adverse legal and financial consequences for the tenant.

Terminating a rental contract properly is key to obtain a refund on your security deposit and also to avoid triggering automatic or silent renewals which add a further 3 years to your lease agreement if you are not mindful.

When you serve notice of termination to your landlord by recorded delivery, there will be a set day and time to hand back the keys. This is normally the last day mentioned in your rental contract.

II. Keys handover procedure

 

Your landlord, or his representative (normally an estate agent), will be there to receive the house keys from you. You must ensure all the following bullet points are carried out correctly:

  • The inventory. If the property was rented with furniture.
  • The invoices. As a tenant, you are normally expected to pay for water, electricity, wifi (internet), gas etc. You must ensure all these invoices have been paid and are up to date making sure they are paid.
  • The keys. The keys, and all its copies, must be handed back to the landlord or his representative that day. You cannot withhold them.

 

Ideally, we strongly advise a legal document is drafted with several clauses covering all the above-listed points which must be dated and signed on every page by both parties in acknowledgement. This agreement works in practice like a contract. From a legal point of view, on signing it, you are returning possession of the property over to your landlord. This is what we understand in legal terms by ‘vacant possession’.

I tell you by experience, that I’ve personally done the above several times when I rented out (when I was still young!) in both Spain and in the United Kingdom and as a result have avoided a host of problems with my landlords. And of course, always got my deposit back!

If everything is returned in good working order and the landlord, or his representative, did not raise any objections (i.e. damages to the property) and sign it, there will be no excuse to return your one or two-month deposit in full (depending on the type of contract signed), as soon as possible. Should they still refuse, the matter becomes a criminal offence which, as you can imagine, has serious consequences for a Spanish landlord.

By law, landlords only have 30 days to return a tenant’s deposit after handing back the keys. If a landlord takes any longer, he is likely stalling trying to pocket your deposit and you will be forced to contact a law firm, such as us, to sue them. You will need to give the law firm a copy of the signed documents and inventory list I mention above.

Some landlords are renowned for pocketing tenant’s deposits and will only tell a tenant they refuse to refund them after they have left the country i.e. typically the case of foreign students. You should trawl in social media the comments left by previous tenants and be on the look out to avoid such abusive landlords that make a (tidy) living out of pocketing tenant’s deposits for no good reason.

What happens if a landlord refuses to accept being handed back the keys or makes up excuses fobbing his tenant off?

This, oddly enough, happens frequently. The reason on why a landlord would do this is because they want to trigger an automatic contractual extension so you owe them more money or because they are simply in disagreement with you pulling out of the contract ahead of time.

In such cases, if you are certain you are within your legal rights to terminate a lease agreement, you can deposit the keys at a notary public. This is known as consignacion, in Spanish. On doing this, it creates a legal evidence that you did in fact comply and abide with your end of the contract handing back the keys on time. The Notary will then be compelled to hand back the keys to the landlord. It will become apparent the landlord is in breach of contract which will be taken on board by the judge ruling the matter if a legal procedure is instigated to terminate the contract and recover your deposit. Basically, what you are doing is pre-constituting legal evidence that will be used against your landlord at a later date showing they acted in bad faith (needless to say, it can also be used as leverage to negotiate a more favourable outcome avoiding a court case altogether!).

As a recap

To formally terminate long-term lease agreements in Spain, you need to meet two requirements:

How can LNA assist you?

 

At LNA, we can assist you with the two points above:

  • Serving legal notice

For a flat fee, we draft and serve your landlord (or tenant) legal notice by recorded delivery in our headed paper anywhere in Spain. This formal communication can then be used as irrefutable proof (in any ensuing court proceeding) that you correctly terminated the lease agreement, giving your landlord (or tenant) due notice as the law demands. This is a necessary step to recover your security deposit (fianza legal, in Spanish). We can offer you this service: Recorded delivery service.

  • Keys handover contract

We can also draft a keys hand over contract ensuring your rights are fully protected. This will guarantee you recover in full your tenant deposit. We can offer you this service: Rentals (contract drafting).

  • Legal action

If your landlord still refuses flat out to refund your deposit, we can act on your behalf through the law courts. We can offer you this service: Litigation

 

We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form to book an appointment.

Legal services Larraín Nesbitt Abogados (LNA) offer you:

 

Related articles

 

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.019 and 2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

... Read more

How to formally end long-term lease agreements in Spain (Part I) - Serving legal notice

Raymundo Larraín Nesbitt, June, 15. 2020

Marbella-based Larraín Nesbitt Lawyers has over 17 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2019, 2020. Plagiarism will be criminally prosecuted.

 

By Raymundo Larraín Nesbitt
Lawyer - Abogado
16th of June 2020

Because of its length, I will split my blog post into two parts. In today's post we'll deal only with the first part, serving your landlord notice by recorded delivery. The second one will deal with the formal keys handover procedure. 

Introduction

The (bad) experience of one of our clients cancelling a rental contract has prompted me to write up this short article. For many this topic may seem rather pointless or even futile, but the fact of the matter is that if you fail to cancel a lease agreement properly in Spain it may have serious legal repercussions for a tenant (read financial).

In Spain long-term contracts, which act as the permanent place of abode of a tenant, need to be terminated formally subject to strict guidelines.

Failure to comply may result in a contract’s automatic or silent renewal. Which results in the tenant owing the landlord several extra months of rental they had not planned for! This leads to landlords pocketing tenant's deposits as contractual penalty. Which explains why many landlords never hand back tenant's deposits in Spain, because tenants did not follow the rules to cancel their contracts!

Bottom line, if you do not cancel your rental contract properly expect no refund on your security deposit.

At LNA lawyers, we assist you both cancelling a rental contract and recovering your tenant deposit.

In this short blog post we will only focus on long-term rentals, as short-term ones hardly have any effects worth noting.

Steps to resolve a rental contract

To formally terminate long-term lease agreements in Spain, you need to meet two requirements:

 

I. Serving legal notice of termination

 

I. Long-term contracts signed before the 6th of March 2019

As a general rule, Spain’s Tenancy Act (or LAU, in Spanish) in its art. 11 rules you must give your landlord 30 days’ notice ahead of the agreed termination date. This notice period likewise also applies to landlords. At least six months must have elapsed before a tenant is allowed to legally cancel a long-term contract (if cancellation is triggered under 6 months, penalties apply).

For example, a long-term contract that starts on the 1st of June 2019 and ends on the 31st of May 2020 (one year). If you do not fancy renewing for a further year, and want to pull out of the contract, you must notify your landlord on or before the 30th of April 2020. Meaning he must receive your notice no later than the 30th of April 2020. This avoids an automatic contractual renewal for a further year.

To end a lease agreement, you must serve him notice by means of a registered communication, that is by recorded delivery. This requires a landlord having to sign for it upon notification with a record of date and time.

Faxes, e-mails, phone calls, text messages and WhatsApp messages are not accepted as valid methods to formally terminate a lease agreement. No law court upholds them as proof of communication and will be disregarded.

It is strongly advised a law firm, such as our company LNA, drafts this legal letter to comply with existing laws, otherwise, it may be understood the termination has not been done according to law and will yield no legal effects. Meaning your rental contract will still be active. Some landlords are proficient at turning down undue termination requests so as to legally pocket tenant’s deposits and additional guarantees as ‘penalty.

II. Long-term contracts signed on or after the 6th of March 2019 (Spain's new rental laws in 2019)

Regarding ordinary annual extensions, the notice period for a tenant is 30 days’ ahead of the agreed termination date (for annual renewal periods).

Regarding silent renewals, we must distinguish between who serves the termination notice, whether landlord or tenant:

  • Landlord: 4-month notice ahead of agreed termination date to avoid triggering a silent renewal for a further 3 years.
  • Tenant: 2-month notice ahead of agreed termination date to avoid triggering a silent renewal for a further 3 years.

 

How can LNA assist you?

 

At LNA, we offer you the following legal service: recorded delivery service.

For a flat fee, we draft and serve your landlord (or tenant) legal notice by recorded delivery in our headed paper anywhere in Spain. This formal communication can then be used as irrefutable proof (in any ensuing court proceeding) that you correctly terminated the lease agreement, giving your landlord (or tenant) due notice as the law demands. This is a necessary step to recover your security deposit (fianza legal, in Spanish).

 

We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form to book an appointment.

Legal services Larraín Nesbitt Abogados (LNA) offer you:

 

Related articles

 

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.019 and 2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

... Read more

Recorded delivery service

Raymundo Larraín Nesbitt, June, 1. 2020

Marbella-based Larraín Nesbitt Lawyers has over 17 years' taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2020. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer - Abogado
1st of June 2020

In Spain, the law requires you send notice to individuals or companies only by recorded delivery in a number of cases.

Any communication sent by e-mail, fax, text messages, WhatsApp messages, etc, are not admissible by law courts and do not serve as proof of communication.

At LNA, we offer a competitively priced service to send notice by recorded delivery in our headed paper within 48 working hours. This acts as irrefutable proof in any ensuing court case. This service is of particular interest to tenants and landlords who must be able to prove any communication sent i.e. when a tenant seeks to recover his security deposit.

Cases in which it is required:

  • Termination of lease agreements (commercial or residential)
  • Notice to landlord of household appliance flaws, damp patches, mould growths, noise, neighbour disturbance, other, etc.
  • Notice to landlord of keys handover
  • Notice to landlord on security deposit refund
  • Start of legal proceedings
  • Letter to non-paying tenant threatening eviction
  • Letter threatening to take legal action on lack of payment
  • Community of Owners disputes (AGMs, EGMs)
  • Other.

 

We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form to book an appointment.

Related service

 

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

 

... Read more

IRPF, Personal Income Tax

Raymundo Larraín Nesbitt, May, 18. 2020

Marbella-based Larraín Nesbitt Lawyers has over 17 years' taxation & conveyancing experience at your service. We offer a wide range of 40 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2020. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer - Abogado
18th of May 2020

 

This post is a gentle reminder that all Spanish tax residents need to file once a year IRPF tax/Modelo 100 (Personal Income Tax). Spanish residents pay tax in Spain on their worldwide income and assets.

You are a Spanish tax resident if:

  • You spend more than 183 days in a calendar year in Spanish territory.
  • Your centre of financial interests is located in Spain.
  • Your spouse and/or underage children live in Spain.

 

If you were tax resident in Spain in 2019, and earned income (i.e. pensions), you need to file IRPF now in 2020. You are taxed on the previous year, running from the 1st of January till the 31st of December 2019.

Our cut-off date to accept filing IRPF tax returns this year is Wednesday the 24th of June 2020. Please do not wait until the last moment to submit your tax return. We file this tax online all over Spain within 24 working hours.

We can offer you this tax service starting at a very competitive fee. Couples have a discount. Contact us for a quote.

We can submit your tax form starting from early April through to the end of June. We strongly advice you to file your tax return as soon as possible and not to wait until the last week of June. If you are leasing properties in Spain, we can offset property-related expenses and local tax rates resulting in a tax mitigation of 70%, or more on your landlord income.

2020 submission period

From the 1st of April until the 30th of June 2020.

 

We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form to book an appointment.

Related tax service

 

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

... Read more

Rental deposit scheme: how to get your deposit back!

Raymundo Larraín Nesbitt, May, 1. 2020

Marbella-based Larraín Nesbitt Lawyers has over 17 years' taxation & conveyancing experience at your service. We offer a wide range of 40 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2019, 2020. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer - Abogado
1st of May 2020

We've all been there. You rent a property in Spain, the rental comes to an end and your landlord refuses to pay you back the deposit!

In this short blog post we explain what a tenant should do to protect himself against this landlord abuse and how you can claim back your lease deposit assisted by a lawyer.

On our previous blog post (Renting in Spain? Five clauses you should be mindful of) on point five we discussed how some devious landlords in Spain, after a lease is over, like to pocket a tenant’s one-month deposit and did not hand it back giving all sorts of lame excuses.

Spain is divided administratively into 17 different autonomous regions. Each region has devolved competencies on this matter and has an admin institution that is tasked with receiving this rental deposit (one month for long-term lets, two month deposit for seasonal contracts). On paying this rental deposit into an official public organization you are guaranteed to recover it, unless you have made damages to the property which the landlord will need to prove and justify.

The obligation to make this deposit falls squarely on the landlord (not on the tenant) and the landlord can be reported to the public regional Authority if they fail to do so (large fines apply on non-compliance, normally amounting to a percentage of the rental deposit). Additional Disposition 3 of Spain’s Tenancy Act (Ley de Arrendamientos Urbanos or LAU, for short) which rules nationwide all over Spain, compels all landlords to make these deposits as outlined in its art. 36.1.

As we write, in practice most landlords conveniently ‘ignore’ their legal obligation to secure the rental deposits, whether deliberately or out of neglect, and may need to be ‘incentivized’ by their tenants to fulfil their legal duties (read veiled threat of reporting them and face stiff fines on non-compliance).

If you want a shot at recovering your rental deposit, please follow our advice. You are welcome.

We briefly collate the contact details of the regional admin institutions to pay the rental deposit into. Please note we only list the regions where the majority of expats rent out, there are far more institutions we care not to include:

  1. Andalusia

AVRA gestión fianzas de alquiler

Internet:  www.juntadeandalucia.es/avra/fianzas

Tel: 900920220

 

  1. Balearic Islands

IBAVI

Form F1

Tel: 900 780 000

 

  1. Canary Islands

Instituto Canario de la Vivenda
Tel: 928 30 60 00

Email: icv@gobiernodecanarias.org

  1. Catalonia (Barcelona)

Institut Català del Sòl

Email: incasol.fiances@gencat.cat 

Tel:  932954410

 

  1. Madrid

Comunidad de Madrid

Portal de la vivienda

Tel: 012

 

  1. Valencia

Fianzas Generalitat Valencia

Complete form 806

 

We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form to book an appointment.

Related legal services

 

Original article posted in IDEALISTA: Rental deposit scheme: how to get your deposit back!

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.019 and 2.020 © Raymundo Larraín Nesbitt. All Rights Reserved.

... Read more
1 >