Useful legal information

Article 10 of the Consolidated Text of the Property Transfer Tax and Stamp Duty Act, approved by Royal Legislative Decree 1/1993 of 24 September, establishes in its first paragraph, as a general rule, that the tax base will consist of the actual value of the property transferred or of the right created or assigned. Only those encumbrances that reduce the actual value of the assets may be deducted, whereas debts are not deductible, even when secured by a pledge or mortgage.

The regulations governing this tax set out the same terms but include a specific provision, in Article 39, for cases where the transfer of the property takes place by way of a public, notarial, judicial or administrative auction. In such cases, the taxable amount will be the purchase price

On the basis of these provisions, the Directorate-General for Taxation issued Binding Ruling V1079-17, of 9 May 2017, clarifying any doubts regarding taxation in these auction scenarios, taking into account that the property may have an appraised value different from its market value, a specific bidding procedure and may be subject to prior encumbrances which the purchaser must assume.

In such cases, and pursuant to the aforementioned binding ruling, it is established that the taxable amount for the tax in question in respect of an auctioned asset will be the acquisition value, comprising the hammer price, without taking into account the value of any encumbrances to which the applicant is subrogated.

The Supreme Court is suspending all pending proceedings relating to floor clauses, pending a ruling by the Court of Justice of the European Union on the reference for a preliminary ruling submitted in April 2015 by Commercial Court No. 1 of Granada, in proceedings brought by Ausbanc against BBK Bank Cajasur.

The oral hearing took place on 26 April, but a further wait of several months is required before the resulting judgement is delivered.

The reference for a preliminary ruling concerns the consequences of the invalidity of floor clauses.

To date, the Supreme Court’s case law limits the refund of money charged to customers under the floor clause to the period from 9 May 2013 to the present.

However, Ausbanc, like various Spanish courts of first instance, takes the view that retroactivity must be full; in other words, the refund of the money charged under the floor clause must be made from the moment the mortgage was signed.

The European Court will rule on this matter, making it a landmark decision for those affected by floor clauses. Given the significance of this decision, the Supreme Court has suspended the deliberation and ruling on cassation appeals in proceedings concerning floor clauses.

Royal Decree 184/2016, of 3 May, dissolved the Congress of Deputies and the Senate, and a general election was called for 26 June.

Polling station boards are made up of a chairperson and two members. These positions are mandatory. Two alternates are also appointed for each of them.

Those appointed have 7 days from receipt of the notification to submit to the local electoral board a justified and documented reason preventing them from accepting the post. The Board rules on the merits of the case; although there is no right of appeal through administrative channels, an appeal may be lodged with the administrative courts.

These grounds, which apply equally to principals and alternates, are set out in Instruction 6/2011, although the list is not exhaustive but merely illustrative, and refer to:

PERSONAL REASONS WHICH, IN ANY EVENT, in themselves justify the removal of a designated polling station official from office:

• Being over 65 and under 70 years of age.
• A declared disability status.
• Status as a recipient of a permanent total disability or severe disability pension.
• Temporary incapacity for work. Pregnancy from the sixth month onwards and the corresponding period of maternity leave.
• Committal to prisons or psychiatric hospitals
• Having previously served on a polling station board on at least three occasions in the last ten years, provided that the polling station board is made up of people included on that board’s electoral roll.

PERSONAL REASONS THAT MAY JUSTIFY AN EXEMPTION. It is the responsibility of the Local Electoral Board to assess these grounds:

• Any physical or mental injury, ailment or illness that prevents a person from performing the duties of a polling station official.
• Status as a recipient of a permanent total disability pension for a specific occupation, provided that the underlying reasons for the disability also reasonably prevent the performance of polling station duties.
• A high-risk pregnancy during the first six months, provided that the risk factors also reasonably prevent the performance of polling station duties.
• Scheduled surgery or important clinical tests on election day, the days immediately preceding it, or the day following it, provided these procedures cannot be postponed.
• Membership in religious orders or communities whose doctrines or rules of seclusion are incompatible with serving on a polling station board.
• A change of primary residence to a location in a different autonomous community, where the practical difficulty of serving on a polling station board can be demonstrated.

Family responsibilities or circumstances which, on their own, justify the removal of a designated polling station official from office:

• A situation of being a mother, during the period of breastfeeding or bottle-feeding, until the baby reaches nine months of age.
• The direct and continuous care, as a legal guardian, of children under eight or of individuals with physical, mental, or sensory disabilities.
• The direct and ongoing care of a relative up to the second degree of consanguinity or affinity who, due to age, accident or illness, is unable to look after themselves.

ACCEPTABLE FAMILY REASONS:

• The occurrence on election day of family events of particular significance which cannot be postponed or where postponement would cause significant financial loss, provided that the person concerned is the main party involved or is related to that person up to the second degree of consanguinity.
• Being the parent of a child under fourteen, where it is proved that the other parent cannot provide care on election day and the individual has no older children or ascendants who can do so.

PROFESSIONAL REASONS:

• Those who, on election day, must work for electoral boards, courts or public administrations tasked with election duties.
• Those who are required to provide vital community services on election day, such as medical, healthcare, civil protection or fire service personnel.
• Editors of general news media and heads of news departments who are required to cover election day.
• Professionals who are required to take part in public events scheduled to take place on polling day, which were planned prior to the announcement of the election, where the person concerned cannot be replaced and their absence would necessitate the cancellation of the event, resulting in significant financial loss.

Failure to fulfil these civic duties is an offence punishable by three months to one year’s imprisonment or a fine of six to twenty-four months. On the other hand, officials are entitled to an attendance allowance, a five-hour reduction in working hours on the day immediately following the election (or paid leave on election day if it is a working day), and social security coverage for any issues resulting from their participation.

In its judgement no. 329/2016 of 20 April 2016, the Criminal Chamber of the Supreme Court addressed for the first time how the right to the inviolability of the home, enshrined as a fundamental right in Article 18.2 of our Constitution, is affected.

This judgement establishes that police surveillance of a home using binoculars without a warrant violates the right to the inviolability of the home; the action is therefore deemed unlawful. In this case, this surveillance served as the primary evidence presented against those accused of drug trafficking.

In this regard, the Supreme Court rules that police surveillance inside a home using binoculars – or exploiting open blinds or un-drawn curtains to spy inside – runs the risk of irreparably weakening the substantive content of the right to the inviolability of the home.

This therefore violates the prohibition laid down in Article 18.2 of the Constitution when, without a warrant, optical devices (such as binoculars or drones) are used to magnify images and bridge the distance between the observer and the subject.

Protection against home intrusion must, now more than ever, cover both physical entry and virtual intrusion.

This case involves a group of "field technicians" whose working day begins at 8 am at the customer's premises, arranged in advance by the company. They are required to turn on their company-issued mobile phones and laptops 15 to 30 minutes before the 8 am start; additionally, the company provides them with a GPS-equipped company vehicle. Conversely, the return journey takes place during working hours, and the company also bills its customers for this travel time.

In addition, the company counts any extra time spent by employees at customer sites as overtime, thereby implicitly recognising the time spent returning home as actual working time. Because these employees rarely visit regional offices, it is proven that the company's business is conducted exclusively at customer premises, making it impossible to perform the work without the travel in question.

Previously, employees would start their working day at a company branch, and travel was automatically covered by the employer.

In this regard, the Court took into account the CJEU ruling on European Directive 2003/88/EC, which defines working time as the time spent by workers without a fixed or habitual place of work travelling from their homes to the first and last customer locations determined by the company.

The Court notes that, given the nature of the work, these journeys are an integral part of the business for workers who lack a fixed or habitual workplace. The workplace for these employees cannot be reduced strictly to customer premises; according to the CJEU, if this travel were not classified as actual working time, the work itself could not be carried out.

Furthermore, in line with the CJEU ruling, employees remain under the company's oversight and instructions while travelling, and are therefore at the company's disposal.

On 23 December 2015, Annex IX of the General Vehicle Regulations on weights and dimensions was amended by Royal Decree 2822/1998 of 23 December, permitting the operation of vehicles with more than 6 axles.

This amendment is intended to allow trucks weighing up to 60 tonnes and measuring up to 25.25 metres in length to travel on Spanish roads.

In order to be allowed on the roads, trucks will be subject to certain restrictions and will require a special prior authorisation issued by the Directorate-General for Traffic or by the Traffic Departments of Catalonia and the Basque Country.

Furthermore, these vehicles must be fitted with warning lights around their entire perimeter and a rear plate indicating that they are long vehicles and bearing the designation XL. In addition, their operation is restricted to dual carriageways and motorways, with a maximum speed limit of 90 km/h. If it is necessary to use conventional roads due to the point of origin or destination of the load, they may only do so for a maximum of 50 kilometres.

According to the government, the aim of introducing mega-trucks in Spain is to help improve road transport logistics, as costs are reduced by 15% to 50%; benefits will also be seen in the operation of vehicle combinations in Euro-modular configurations by reducing heavy goods vehicle traffic, saving energy and lowering emissions.

According to the Official State Gazette (BOE), in other European countries where this initiative has been introduced, there has been no negative impact on road accident rates. In fact, by reducing the number of vehicles on the road required to move cargo, risk falls and road safety improves as a result.

On 22 July, the reform of administrative cassation appeals came into force, having been introduced under the Third Final Provision of Organic Act 7/2015, of 21 July, which amends Organic Act 6/1985, of 1 July, on the Judiciary.

The main changes introduced by this reform are as follows:

• The objective scope of judgements eligible for a cassation appeal is extended.
• Fixed grounds for a cassation appeal are abolished; the new appeal may be lodged against any breach of domestic or European law, whether procedural or substantive, or of case law. The requirement that issues of law rather than fact be raised remains, and the breaches must concern national or EU law that has been invoked, is relevant, and has been decisive in the contested judgement.
• Requirement of an objective cassation interest for the establishment of legal precedent.
• The regulation lists a number of circumstances that indicate the existence of this cassation interest, but these do not apply automatically; the appellant must substantiate them in their written submission.
• The preparation stage of the appeal is of crucial importance; the deadline for its submission has been extended to thirty days, greater formal rigour is required, and the grounds showing an objective cassation interest must be substantiated.
• The maximum length of the notice of appeal is prescribed.
• (50,000 characters with spaces), as well as its format (Times New Roman font) and structure, as approved by the regulations of the Governing Chamber of the Supreme Court.
• The ruling will establish legal precedent.
• Cassation appeals in the interest of the law and for the unification of legal doctrine are abolished.

The government, in the exercise of its exclusive competence in labour legislation, has definitively transposed EU working time regulations into Spanish law through Royal Decree 311/2006 of 29 July, which amends Royal Decree 1561/1995 of 21 September on special working hours in relation to night work.

A new provision has been added specifically for night workers engaged in activities involving particular risks or significant physical strain, setting a maximum working day for such cases.

Those appointed have 7 days from receipt of the notification to submit to the local electoral board a justified and documented reason preventing them from accepting the post. The Board rules on the merits of the case; although there is no right of appeal through administrative channels, an appeal may be lodged with the administrative courts.

In this regard, the Royal Decree states that “the maximum working day for night workers whose work involves special risks or significant physical or mental strain will be eight hours within any twenty-four-hour period during which they perform night work”

Work will be deemed to involve special risks or significant strain if it is defined as such by a collective agreement or by an agreement between the employer and workers’ representatives.

The eight-hour limit may only be exceeded where necessary to prevent or rectify accidents or extraordinary and urgent damage, or in cases where there is an irregularity in shift work for which the company is not responsible.

Judgement 120/2016, of 2 March, by the First Chamber of the Supreme Court sets out an interesting ruling on the scope of child support. This case concerns a claim brought by the mother against the child’s paternal and maternal grandparents for support for her minor daughter.

The child’s father is insolvent and unable to provide for his daughter’s needs, because he suffers from an illness that prevents him from entering the labour market. Additionally, the mother is unable to work due to a recognised disability of 65%.

The issue examined in this judgement is novel, as it is the first case in Spain where a minor has been granted the right to receive child support from all four grandparents due to the insolvency of one parent.

The first-instance judgement dismisses the claim for payment of the child’s extraordinary expenses (costs relating to music and extra tuition), on the grounds that such costs are provided for in cases of parental support claims under Article 93 of the Civil Code, falling outside the definition of maintenance under Article 142 of the Civil Code, which establishes that maintenance means everything essential for sustenance, accommodation, clothing and medical care. Child support also encompasses the education and instruction of the recipient.

An appeal has been lodged against this ruling, in which the claimant requests, among other things, that child support be increased to cover extraordinary expenses The court of appeal dismissed the issue of extraordinary expenses, and the mother lodged a cassation appeal.

The Supreme Court finally ruled that payment of the extraordinary expenses claimed from the grandparents – specifically the child’s music and extra tuition – is not strictly related to her education, despite the mother’s understandable wishes, since the child attends a free state school. The extraordinary expenses claimed have no legal basis in the grandparent-grandchild relationship, though they may sometimes be justified if they relate to sustenance, accommodation, clothing and medical care.

On 16 June 2019, Act 5/2019 of 15 March, regulating property loan contracts, came into force. This law regulates property loan contracts, ensuring the protection of individuals in these transactions, primarily through requirements regarding the right to information and the non-waivable nature of the rights it provides.

The protection extends to individuals in the broadest sense and not just to consumers, thus including the self-employed and sole traders.

Credit intermediaries, property lenders and their employees must meet professional standards regarding the knowledge and skills necessary to inform and advise prospective borrowers; limits are also set on staff remuneration policies.

Tying practices (selling other products linked to the loan) are prohibited, with the exception of certain financial products, insurance to guarantee fulfilment of the loan obligations, and damage insurance, provided they meet a specific set of requirements. For example, in the case of insurance, the lender must accept policies offered by other providers, without this resulting in less favourable loan terms.

The law applies to mortgage loans and credits for the purchase of residential property – not limited to a primary residence – taken out after it came into force on 19 June 2019, as well as subsequent novations and subrogations of prior contracts, and early acceleration of existing loans.

During the pre-contractual phase of the loan, the obligation to provide basic general information in writing in a clear, concise and easily legible or audible manner is supplemented by the European Standardised Information Sheet (ESIS) and the Standardised Risk Warning Sheet (SRWS). These must be provided to the customer at least ten days before the contract is signed.

At this stage, a creditworthiness assessment of the borrower must also be carried out; the loan may only be approved if the assessment indicates that the borrower is likely to meet their obligations under the contract.

The notary chosen by the client has a duty to advise the borrower and/or guarantor, ensuring that the mandatory documentation has been provided and verifying that they understand the scope of the transaction.

Floor clauses are prohibited in variable-rate loans. Negative interest rates are also prohibited.