English vs Spanish law
Our Spanish solicitors are often approached to answer queries concerning legal issues in Spain encountered either by British residents with an interest in Spain or those ex-pats who have legal issues within the country. Many people are surprised by the completely different regulation of the said matter in both countries. These queries generally start with “Because in this Country…” which refers to the different answers the Law provides in the UK.
What follows is obviously not an exhaustive list of the said differences, but an overview of the most common.
The Public Notary
The figure of the Public Notary has considerably different status in Spain and the UK, and most importantly in the faculties, they are able to perform. i.e. the documents he can intervene in and the services he can provide. The Notary in Britain is a qualified Lawyer and performs certifications of documents (usually to be used abroad) and witnesses the Commissioner of Oaths, Powers of Attorney (or of Representation). Virtually all Notaries in the UK also practice as solicitors.
The Notary in Spain is completely different. As in the UK it is an independent profession, however, the role is to provide independent advice and the fees are strictly determined by the regulator. A Notary is also a public servant in charge of specific responsibilities performed on behalf of the State, namely: witnessing wills, validating transfers of properties (by sale or inheritance), etc., legal acts and agreements which are not valid without the Notary´s intervention. This condition of public workers makes them completely incompatible with practicing as solicitors, Judges, accountants or exercising any Political responsibilities.
Another practical aspect that differentiates the Notaries in the UK with those in Spain (similar to the French and Italian, hence all referred to as “continental”) is the formalities his intervention add to the dealing in which they intervene. In Spain the Notaries can only use numbered sheets, apply old style seals and the deeds they produce, quite intentionally, resemble old papyrus-like documents. (This is often mocked in the UK. In a recent article an English paper wrote that the continental notaries “once at home, read by candlelight and apply leeches.
Properties
The rights of the co-owners in the joint ownership of properties (with or without a mortgage)
One of the more frequent legal issues that push non-Spaniards to seek legal advice is that of joint property ownership. Problems generally arise when the decision has been made (or circumstances have forced the situation) to terminate the joint ownership. We find that it is quite common in divorces when properties are owned in equal part by both spouses, but also by siblings who inherited property from a Probate and are unable to agree on the enjoyment and use of the house. We are also aware of friends who buy holiday homes together but find it difficult to share the property and all responsibilities in practice, as well as a myriad of other potential situations. The problem increases considerably when the property is mortgaged.
In all the previous cases, when there is a disagreement and one party decides to leave the property union, he faces the problem of how to force the other co-owner(s) to sell or, to buy him out of his share of the property.
Rather too often the Spanish solicitors find that there are cases in which a person, who is willing to leave, remains in co-ownership, and neither uses nor benefits from the property. This is because this party simply ignores one of the main basic rules of the co-ownership: that no one can be forced to remain thus, and that any co-owner can request to be bought out and has the right to dissolve the community.
The route to take in these cases is simple. A communication must be sent to all other co-owners, who then will have two choices: to agree and cooperate in the sale or to pay the dissident party their price and release them. There are no other options, if there is a lack of cooperation then the case should be taken to Court which, invariably, will rule that the property is sold (with the Judge´s supervision) with the proceeds of the sale eventually split amongst the co-owners but, importantly, with those who opposed the sale supporting the Court´s costs.
There are companies which specialise in buying the unhappy co-owner´s shares in a property at a discount, and then taking the case to Court in order to force the sale of the property themselves.
All of the above applies to properties without mortgages or legal charges. When there´s a mortgage on the property the problem becomes more difficult and the solution of the same goes beyond the reach of the co-owners, as it is necessary to get approval (plus formal agreement) from the mortgage lender, or else it is not possible to change the ownership of the property.
So even in the cases of cancellation of the condominium over the property (where there is a full agreement amongst the co-owners on who´s buying whom out) the bank´s agreement is necessary, they must agree that only the remaining co-owner stays as full proprietor of the asset. The problem is complicated further as it is very unusual that a bank in Spain agrees to let one mortgagee out of the loan. This is known as “reduction of guarantees” (going from two mortgagees to only one), and, as previously mentioned the banks normally rejected the request.
The only way around this will be to look for another guarantor to steps into the mortgage in substitution of the previous one. It is necessary then, in these cases, to make a fresh application for the mortgage. Only if the bank approves can the borrowers be changed/substituted. However, it is necessary to mention here another note: any change in a mortgage agreement in Spain (including the change of borrower or guarantor) involves a whole refinance of the transaction – the previous mortgage must be cancelled and a new one agreed before a Notary and registered. All this means bank´s costs (cancellation, initial fees for a new mortgage), expenses (Notary and Land Registry) and taxes (stamp duty).
Inheritance within the family – the mandatory reserve of the children
When a testator grants a will in Spain he cannot leave all his estate to the beneficiaries. There is a part of the estate, very strictly determined in the Spanish Civil Code, which set a reserve (the “legitima” as is known in Spain) and means that a portion of the estate, two-thirds of it, must necessarily go to the children, the immediate descendants of the deceased party. With a remote origin in the old Roman Law in which the Spanish legal principles are still based, this comes usually as a surprise for some beneficiaries of estates, when they know that the references to “all my assets” in a Spanish will refers to all the assets only after two thirds of the said estate have been deducted.
The problem deepens on occasions when the deceased party or the beneficiary (or both) are English but reside in Spain. It is necessary to determine from the outset which Law to apply, as the difference will be drastic. This initial assessment must take into consideration the nationality of the involved parties and also their residence for tax purposes, to determine what Law will apply, hence, if the reserve will have to be observed, or not.
There is a current of thought in Spain that proposes a change of the Spanish inheritance system in relation with the reserves, substituting it with a more flexible scheme and considerably reducing the minimum that a parent must leave the children, from the current two thirds to a maximum of one third. Some recent Court precedents have gone even further by eliminating the need of the mandatory minimum in cases when the wills favouring via reserve the children / beneficiaries are contested by third parties who deem the reserve unfair, for instance when relatives have cared for the now deceased parties far more that their own children.
Marriage laws England vs spain
Being married. Legal status of the assets purchased by each spouse before and during the matrimony, and then in case of a divorce
Another quite significant difference between the Law in Spain and the UK is the regulation of the assets of the spouses – or the legal partnership – , with completely different regulation in the two countries, and with a diametrically opposed default system.
In Spain, the assets of the spouses are, by default, owned under a “community of property”, it is that, regardless of the title, the assets acquired by either spouse are jointly owned, and as such it will have to be equally split in the event of separation or divorce. The only exception will be the assets inherited by either of the spouses, which remain personal (or solely owned) assets and which will not have to be split if the couple divorces.
In the UK the regime is completely different, with the default scheme being the separation of property. In this scheme in which, for economic purposes, the assets are owned by either spouse as if they had not contracted marriage each spouse remains the owner of their own assets and no community of property is established. Debts each spouse accumulates are driven solely from his property, and not born by the other.
The scheme to apply will be determined by the “personal Law”, not where the wedding takes place. It means that two British people can get married in Spain but, by default, the economical regime of the matrimony will be that of the UK.
Note that whatever the economic regime of a matrimony, it can be changed in Spain at any time by going before a Notary and agreeing “matrimonial dispositions”. This is an agreement that may contain any sort of clauses between the spouses and in relation to the assets they owned before getting married and acquired during the matrimony.
And as a conclusion on this point, the marital economical scheme of a matrimony (or partnership) is of enormous importance in everyday matters, such as selling a property, as on some occasions it is necessary that both spouses agree to it (and sign the transfer deeds) even if it was purchased by only one, and with his or her private money.
Making a will
Of all the matters commented on in this piece, the difference between granting a will in Spain and England (and in general all countries based on Anglo-Saxon Law) is perhaps one of the more obvious.
To grant a last will and testament in England is simple and quite straightforward: it is necessary only to write down the beneficiaries the testator wishes for the allocation of his estate (monies, properties, and other possessions) and some other general clauses, such as who will be the executor of the will, after his passing. The document is then signed by the grantor in front of two witnesses and then by these two witnesses in front of the grantor, moments after which it is valid and enforceable. The will can be kept at the grantor´s house (normally in a safe and with the rest of their personal documents) at his solicitor´s office, at the bank, or anywhere else he wishes.
The rules to grant and keep a will in Spain are completely different. The grantor of a will does not write it, by rather must go to a Notary and tell him he´s granting a will, so the Notary drafts the document and reads it to the wills´ grantor. Once he agrees on the final version and the Notary confirms it is made according to the Law, the grantor signs the document together with the Notary, who keeps the will in his records. This is important, because what the grantor, the beneficiaries, the executor (if there is one as this figure is seldom appointed or named in Spanish inheritances) or any third party will receive is a copy of the will – the original is kept in the Notary´s archive and will have the consideration of “public deeds”.
The previous point is important because many beneficiaries or relatives of the will´s grantor usually ask who has the “original”, which is kept always at the Notary. Another minor, merely material, point which also provokes doubts is that of the lack of signature on the will. The copies issued by the Notary on request, are only of the text, the wording of the will. But these copies never have any signature at the end. Many potential beneficiaries raise this point, in the belief that the document they have been given is forged. But this is not the case – it is by Law that the copies made are not to contain any signature.
The Notary, once the will is validly granted and safe in his records, has to send a copy of the will to the General Registry of Wills, within the Ministry of Justice in Madrid. This is done in this way so anyone with a licit interest in the will can confirm if: a) a person granted a will before dying, and b) where the will is kept.
A final, yet quite important, point is that a will in Spain cannot be amended – its clauses can be made null and void or amended only by granting another will with different clauses.