August 17th, 2023

Around 200 property owners in Spain who opted for a lifetime mortgage through Manchester Building Society, now under the umbrella of Newcastle Building Society, are facing a challenging situation.

Unfortunately, MBS ran out of cash to pay property owners. All agreed-upon instalments were halted due to a prohibition by its regulator (PRA) to grant further loans in Spain and elsewhere. This left borrowers “high and dry”, still with a Manchester Building Society mortgage registered against their property, and thus, unable to sell it.

In such situation, there is however a way out to free the property from this mortgage for good, and that solution is already available through Lawbird Legal Services. Last year, a Velez Malaga Court fully accepted executive proceedings brought by Lawbird against Manchester Building Society, on behalf of a British client, demanding full payment of the agreed loan of 300k Euro (with interest). This is in addition to the over 50 rulings won in many other courts against different equity release providers around Spain.

Now, more claims are being filed through the Courts to terminate the mortgage loans due to contractual default by Manchester Building Society, on the following grounds:

  1. Manchester Building Society has stopped making any further agreed payments.
  2. Manchester Building Society has not given a solution to the property owners.
  3. Manchester Building Society has not reviewed the existing mortgage loan proposal to adjust it to their inability to continue offering the promised cash.
  4. Manchester Building Society will not address the current situation of owners that are unable to sell, offer a compromise or terminate the mortgage loan.

If you have a property in Spain and  have a Manchester Building Society Spanish Lifetime Mortgage, you need to act now and take advantage of the existing favourable rulings to achieve the following:

  1. Nullify the MBS mortgage loan.
  2. Retain the sums received so far as compensation.
  3. Remove the encumbrance from the property.

Get in touch with us for a free online or office meeting with a one of the specialist lawyers.

 

July 7th, 2023

Spain’s Golden Visa program has gained popularity among foreign investors seeking residency in the country. One of the key requirements for this visa is purchasing a property worth at least €500,000. However, it is important to clarify that this requirement can pose challenges for joint property owners who fall within the €500,000 to €1,000,000 range, particularly in cases where there is a marital property regime. In this blog post, we will explore a viable solution for joint property owners in this situation, highlighting how Lawbird can facilitate a smooth equity transfer while minimizing tax implications.

The Golden Visa Program in Spain

Spain’s Golden Visa program was established to attract foreign investors by granting them residency in exchange for significant investments in the country. The program allows non-European Union (EU) citizens and their families to obtain a residence permit and enjoy various benefits, including visa-free travel within the Schengen Area. Investing in real estate is one of the most common pathways to acquire a Golden Visa in Spain.

Challenges for Joint Property Owners

While the Golden Visa program welcomes property purchases of €500,000 or more, it presents a challenge for joint property owners, particularly in cases where there is a marital property regime. In such situations, where assets acquired during the marriage are considered common property, the total value of the property must reach the minimum investment threshold for each spouse to qualify for the Golden Visa. This means that joint property owners falling within the €500,000 to €1,000,000 range may not initially meet the investment requirement individually.

The Solution: Equity Transfer to Meet the Threshold

To overcome this obstacle, joint property owners can consider transferring equity between themselves to meet the €500,000 minimum requirement for the Golden Visa. By transferring the necessary amount from one spouse to the other, the receiving spouse becomes the primary owner of the property, thus qualifying for the Golden Visa. This solution allows both individuals to apply for residency under the name of the qualifying spouse, who holds the predominant ownership.

At Lawbird, we are a trusted law firm specializing in legal and tax advisory services, offering comprehensive assistance to individuals navigating the Spanish Golden Visa program. Our experienced team understands the complexities involved in equity transfers and provides professional guidance to ensure a smooth and efficient process.

Take Action Now: Contact Lawbird for a Swift Equity Transfer

As joint property owners seeking a Golden Visa in Spain, it is crucial to consult with legal experts who can navigate the intricacies of equity transfers. At Lawbird, we are here to help. Our team of experienced lawyers will guide you through the equity transfer process, streamlining the procedure and minimizing tax obligations. Don’t miss the opportunity to obtain Spanish residency through the Golden Visa program.

Contact Lawbird today to discuss your specific circumstances and take the necessary steps towards acquiring your Golden Visa.

June 26th, 2023

The Supreme Court of Spain has made a surprisingly positive ruling that directly affects temporary residency card holders: it has nullified an important article that states that foreign citizens with temporary residence in Spain would lose their permits if they stayed outside Spain for more than six months within a year. The Court has now found that this provision violated the EU fundamental right to free movement, which can only be restricted by a law, not a regulatory provision.

This ruling came about after a citizen of Iran had her temporary residence and work permit terminated due to an absence in Spain of over six months. The Supreme Court has now overturned this decision, highlighting that restricting the right to be in Spain must be done by law, and not be a regulation or decree.

Many temporary residents have lost their cards due to not being in Spain for six months, but a large number will now benefit from this ruling by being able to apply for renewals successfully.

If you have been affected by the minimum 6-month stay requirement for temporary residency in Spain, we are here to help. Contact us now to understand how this recent ruling by the Spanish Supreme Court may impact your situation and explore your options for renewal. Don’t hesitate, reach out to us today!

July 8th, 2020

Starting Monday 6th of July 2020, the Directorate General of Migration and the National Police will issue -upon application- a new residency card and, with it, a new residency status for British expats specifically created pursuant to the Brexit Withdrawal Agreement (Part Two), published jointly by the EU and the UK on the 14th of November 2018.

This new residency sits in between the standard EU-citizens and the non-EU citizens status, and will have its own terms and conditions, in particular in respect to duration of the residency cards (and notably the introduction of a photo on the card).

These are the most important points to consider:

  • UK nationals residents in Spain prior to the 31st of December 2020 will have the rights to residency, freedom of movement and Social Security as recognized in the Withdrawal Agreement. Applicants for residency after this end date may have others, either those recognized in a future agreement between the EU and the UK or, by default, those recognized by existing Spanish laws and those that may be approved.
  • UK nationals (and their family members) will not have to apply for a new status but will be entitled to receive a card that confirms their status as beneficiaries of the rights contained in the Withdrawal Agreement.
  • The Instruction refers to various “statuses” and procedures:
    • Applicants who have been residents for a period above 5 years and do have a permanent residency certificate, will submit their applications at the Police Station, receiving a permanent 10-year residency card.
    • Applicants who have been residents for a period above 5 years but do NOT have a permanent residency certificate, will submit their applications at the Police Station, receiving a permanent 10-year residency card.
    • Applicants who have been residents for a period under 5 years but do have a residency certificate, will submit their applications at the Police Station, receiving a “temporary” 5-year residency card.
    • Applicants who do not have a residency certificate will submit their applications initially at the Foreigners Office and once approved, they will need to request the issuance of their 5-year validity cards at the Police Station.
  • UK nationals arriving in Spain after the end date of the transition period (31st of December 2020), will have 3 months to apply for residency. Where not, the authorities reserve their right to grant extra time to submit the application.
  • Temporary or extended absences from Spain will not affect the rights under the residency cards.

Finally, further to the end of the transition period, Spanish authorities may request that British citizens apply for residency under the various options granted to any non-EU does (non-lucrative residency permits, self-employed work authorization and residency permit etc.).

June 11th, 2020

Coronavirus Covid-19 Spain Immigration Officer Stop Sign

As of time of writing, the state of alarm and subsequent lockdown due to the Coronavirus/Covid-19 crisis has been extended on six occasions, until the 21st of June, and the borders have been closed to travelers. This has had an obvious impact on Spanish immigration procedures. In order to prevent harm to current resident permit and short stay visas holders, the Spanish government has made a number of provisions to cover all the possible situations.

What if my Spanish Resident Permit Expires During Covid-19 Lockdown?

The general rule of thumb is that temporary permits have their expiring date extended six months.

  • Temporary permits that expired three months before the lockdown was announced and those expiring during the lockdown are automatically extended for six months.
    This extension will apply starting on the expiry date of the document.

    • Example: Your residence card expired on March 30, 2020. Your new expiry date is September 30, 2020, and you can either apply for the appointment as soon as the lockdown is lifted or at any time before September 30.
  • Residence cards of relatives of EU citizens are also automatically extended for six months in the same way as temporary residence cards, with the same conditions as explained above.
  • Equally, the expired long-term residence cards (Larga Duracion) are extended for six months.
  • Spanish residents that are currently locked out of Spain, whose visas and residence cards have expired during lockdown, can enter Spain with their valid passports and expired visa or card after the lockdown ends.
    • Question: what about my expired return authorization if I already renewed my card and applied for a new TIE? According to the above, you can enter Spain with your expired card and approach the police station to collect your renewed card once you have been able to travel back.
  • If during lockdown the renewal applications have been filed and approved, the validity date on the renewal will be taken back to the following day after expiry date.

What if my Spanish Stay Visa Expires During Covid-19 Lockdown?

  • Short stay visas are extended for 3 months after lockdown ends.
    • Example: You came on holiday on the 10th of March and were unable to return to your home country. You have stayed since then. If lockdown ends on the 22nd of June, your visa will be valid until the 22nd of September.
  • This extension is limited to the Spanish territory.
  • The extended period will be considered to calculate the maximum time authorized for future stays in Spain.
    • Example: You came on holiday on March 10, 2020 and stayed in Spain until July 10 of the same year. You will have consumed 120 days (30 more than usually allowed) and this means you have used up to 30 days of your second allowed time; that is, you will be allowed to stay 60 instead of 90 days in your next trip.
  • Students on mobility programs with visas that have a validity of less than six months, will be extended for three months if the student is in Spain.
  • Long term visas leading to the TIE application once entering in Spain, are also extended for three months.
  • Entrepreneurs’ residence visas based on Law 14/2013 on supporting entrepreneurs and their internationalization are also extended for three months.
  • Those in the obligation to return to their countries to extend a visa based on a student’s program are allowed to stay with their expired visa during three months after the lockdown is lifted.

What Happens if I Have Been Out of Spain during Covid-19 Lockdown?

Absences from Spanish territory during lockdown won’t be taken into consideration when calculating the minimum stay in Spain (days of actual residence), required to renew subsequent authorizations.

  • Example: You left Spain on the 22nd of February for a long trip of one-month duration and were suddenly locked out in your home country. You have a temporary residence permit and had already been 4 months out of Spain when you left. Your renewal date was the 30th of March and you have returned to Spain on the 25th of June, as lockdown has been lifted on the 22nd of June:
    • Your card has been extended until the 30th.
    • Absences between March 15 and June 22 do not count.
    • You have been out of Spain for 4 months and 3 days, that means you can renew you card as soon as you like before the 30th of September.

The content of this post is based on Order SND/431/2020:

  • Orden SND/421/2020, de 18 de mayo, por la que se adoptan medidas relativas a la prórroga de las autorizaciones de estancia y residencia y/o trabajo y a otras situaciones de los extranjeros en España, en aplicación del Real Decreto 463/2020, de 14 de marzo, por el que se declara el estado de alarma para la gestión de la situación de crisis sanitaria ocasionada por el COVID-19.

 

March 20th, 2020

In the wake of the current coronavirus pandemic that is affecting Spain, the General Directorate of Migrations has just announced the suspension of deadlines that affect those foreign citizens with ongoing immigration application procedures.

The following scenarios are considered:

  1. Initial or renewal work and/or residence permit applications filed before lockdown came into force, that are currently in process or pending on the positive resolution.There are two possible situations:
    • That there aren’t any other documents required leading to the final resolution of the application.
    • That the application is already approved, only awaiting the approval letter.

    The finalization of the above applications will be immediate, allowing applicants to start, where applicable, a professional activity to avoid any further financial harm on the family unit.

  2. Investor’s Residence Permit (Law 14/2013) applications filed before the lockdown came into force, that meet the 20 days deadline without a resolution. These will be approved based on a positive silence resolution, allowing them to immediately start a work activity
  3. Initial or renewal work and/or residence permit applications filed before the lockdown came into force, that are currently pending on the rejection resolution or being shelved (due to withdrawal, renunciation, failure to provide with requested documentation).The following deadlines are suspended:
    • Applications pending on additional documentation or actions that are subject to administrative deadlines.
    • Those awaiting a rejection resolution letter.

    The administrative deadlines to file appeals will be suspended, with the aim to avoid the defenselessness of the applicants.

  4. Extension of validity of expired documents. Additional documents requested by the immigration authorities that have already expired, will be regarded as valid.
  5. Non-EU citizens holding a short stay visa that has expired (or is about to) but are unable to return to their home countries because of the lockdown, are allowed to stay, being the current limitation suspended. This measure had already been applied to Chinese citizens since the end of February, but in light if the current situation is extended to all nationalities.
  6. Initial or renewal work and/or residence permit applications submitted after the lockdown will be expedited as much as possible, but will not be subject to the normal administrative deadlines suspended by this Royal Decree.

Also to consider:

  • Any additional documentation that is requested will have to be submitted through electronic means, as a substitute of personal appearance.
  • A legal representative (via authorized forms and powers of attorney) will be allowed to submit the following permit applications: Modifications, Extensions, Renewals, Work and residence authorizations as well as Student authorizations, Mobility of students, Non-working visas based in apprenticeships and volunteer work visas.
  • It is important to understand that the administrative authorities are free to stop a procedure if they believe personal appearance is mandatory, which will be required once the lockdown is over.

We must also be aware that once the exceptional situation ends, the immigration office will have a considerable number of files to resolve, unable to finalize all in a timely manner, and further extension requests might be needed.

Download the full announcement

 

April 8th, 2019

During our many years of experience in dealing with Spanish immigration, we’ve come across some circumstances in which non-lucrative residence permit applications have been rejected by the Spanish immigration authorities.

In order to minimize the chances of non-approval for our clients, we’ve gathered below the list of the most common causes for rejection:

  1. Insufficient regular income

    Applicants must count on a relevant income as savings or receive periodic income from investments, pensions, etc., which should allow them and their family to support themselves while living in Spain for a minimum of six months per year.A non-lucrative residence application will be rejected when the applicant cannot prove a minimum monthly income of €2,151.36 (plus €537.84 for each economically dependent person).

  2. Limited medical insurance

    The compulsory medical insurance policy must be hired from a company operating in Spain and offer the same cover as the Spanish national health system. Travel medical insurance is not accepted and those insurance policies hired from their home countries offering medical coverage while in a foreign country are neither accepted, as they usually include many limitations.

  3. Lack of proof of accommodation

    We want to put some stress on a reason that has been and is actually a matter of deliberation, often ending in rejections not expressly motivated by the Spanish consular office. The Spanish embassies in some countries value and take more into consideration those applications filed by property owners in Spain. That is, that the applicant has bought a house in Spain. Even if rental properties can also be provided as proof of address, an owned property has more weight on the application. Nevertheless, we need to make it clear that the current Law on Immigration in Spain does not indicate proof of address as a requirement to be met when filing a non-lucrative residence permit application. However, we have found that some consular offices slightly mention it in their internal information for applicants, like for instance the Spanish embassy in Quito, Equator: “Accommodation Availability or proof of sources leading to such availability”.

  4. Lack of schooling plan

    If applicants have children in schooling age, which in Spain ranges from 6 to 16 years old, they will be required to prepare a schooling plan for them before submitting the applications. The usual procedure involves enrolling the children at a private school, often an international one, being the first step paying a school reservation fee deposit.

    Many applicants find it difficult to comply with the above mentioned requirements, especially since they must invest on a property rental or initial school fees without confirmation or guarantee that the residence permit applications will be approved.

  5. Failure to construct a convincing argument supporting the applicant’s real motivation

    Coherence and common sense are major factors when the authorities review a file and try to interpret the real intention behind a non-lucrative residence applicant. An unconvinced officer may conclude that the applicants are not truly willing to spend at least 6 months in Spain, but just want to acquire Spanish residency to gain freedom of movement around the Schengen area without the need to apply for entry visas, and will thus reject the application. We see two types here:

    • Incoherence in the family situation: Single applicants who apply for just one residence permit for themselves, and have planned to leave their family back home, will probably raise a red flag for the Spanish immigration officer in charge of reviewing the application file. In the officer’s view, this person will probably be unable to meet the minimum stay requirement if his family resides abroad.
    • Incoherence in the employment situation: When applying for a non-lucrative permit, it is assumed that applicants receive enough income from their business activity in their home country, and that such business activity doesn’t require their physical presence. This is easy to meet for wealthy business owners, or retired individuals living on high standard public or private pensions. However, we find that there are many young couples that happen to work salaried who want to relocate to Spain, but wish to keep their managing roles at their current companies (with offices in their home country). This may pose a problem when applying for the first time, as the Spanish immigration officer will deem improbable that the minimum stay requirements will be met, as a managing position cannot be left unattended for prolonged periods of time. In those rare cases where an initial application is approved, the bad news is delivered upon renewal, when applicants are unable to prove having spent enough time in Spain during the previous two years. In the remote work era, applicants may be able to convince immigration officers if they can make their current company sign a letter stating they are allowed to work remotely from within a foreign country for at least 6 months a year.
  6. Failing the interview at the embassy

    Once the application is submitted, the staff at the Spanish Embassy will interview the applicants to confirm that everything stated on the file is true, and to gather any other subjective information not present in the file which can be useful in deciding on the application outcome. They will want to know things such as whether there are any type of family bonds or business connections that support the application and justify the decision to choose Spain among other countries to settle down. Also, if the applicants have visited the country at least once on a recent date or if they have any relatives or business partners already residing in Spain.

    It should be an easy interview. However, a small percentage of applicants will surprisingly fail to provide the right answers to these questions, and some will even tell the embassy staff that they really don’t plan on living in Spain as residents, but instead want to use the residence card as a travel visa. This will result in an immediate rejection.

November 22nd, 2018

One of the most common causes of rejection by the Spanish authorities when it comes to renewing a residence permit is directly related to the failure of the applicant to comply with the minimum stay requirements that Spanish law dictate.

A temporary residence permit application allows a person to stay in Spain for more than 185 days per year during a maximum period of 2 years. These temporary residence permits can be renewed once 2 year period has passed, but only if you spend at least 185 days in Spain within each year, which is the minimum stay requirement set by Spanish law for temporary residence permits.

Another important time limit to consider is the maximum period of time you can spend out of Spain when applying for permanent residence. As a temporary resident, you will be eligible to apply for a permanent residence card once you have been a legal resident in Spain on a continued basis for 5 years (provided that other financial requirements are met). During these 5 years, the sum of all the days you will have spent outside of Spain should not exceed a total of 10 months. When this is not met, we recommend our clients to apply for an extraordinary renewal of their residence permit (which is an additional two-year temporary residence permit extension), in an effort to accumulate enough days during this time to finally meet the permanent residence minimum stay requirement.

It should also be noted that once you are a permanent resident, an absence of 12 months or more will lead to the cancellation of the residence card validity.

We cannot but emphasize the importance of this minimum stay to keep your residency status or be able to apply for a new one. As a matter of fact, it is one of the main reasons for a rejection in immigration applications. Some time ago, Spanish immigration officers would have a more relaxed attitude towards the actual compliance of this requirement. However, this is no longer the case, and they will thoroughly examine all the entry and exit stamps on your passport.

Despite the above, the current Immigration regulations stipulate exceptional cases that would serve as a justification of a prolonged absence and that would not lead to a renewal rejection: Force majeure reasons, illness, natural catastrophes and accidents.

November 21st, 2018

With this post we will try to establish the nature and differences between the various charges likely to be considered of undue collection, determining the effects of its application and the reason for its inappropriateness.

In order to go deeper, we will carry out a small analysis of the most common ones:

  1. Commission for the return of unpaid bills of exchange.

    These originate in the so-called “bill discount contracts“, normally signed by commercial companies and by virtue of which they assign their credit rights (normally not yet due) to financial institutions, in order to collect them in advance and in exchange for a discount/interest on the principal assigned.

    However, it must be borne in mind that in those cases in which the entity cannot enforce such a credit right, it is directed against the original creditor (the assignor), charging him a series of commissions of doubtful legality, in addition to the principal.

    There is no place for the collection of such commissions, since the risk of non-payment by the debtor is a circumstance that necessarily has to be considered ab initio, in addition to the fact that the difficulty or impossibility of collecting the credit is more than compensated by the agreed remunerative interests.

    It is therefore completely inadmissible for the bank customer to pay this type of commission, since the payment of the same commission corresponds to the collection of the same service twice, a situation which becomes abusive.

  2. Commission for overdrafts generated in account.

    These are generated if the bank account remains in negative numbers (below 0), being the main reason of the entity that they respond to extraordinary expenses of overdraft claim (notification to the holder, etc).

    As in the previous case, current account contracts provide for the collection of interest in these situations, so that again we are faced with a double charge for the same management.

    Likewise, the expenses for extraordinary claim procedures must be considered as situations of probable occurrence and, therefore, should not be considered extraordinary. For example, sending letters by ordinary mail, e-mails or calls warning of present or imminent overdrafts should not be considered as additional management.

    In conclusion, in addition to double charging for the same service, overdraft fees should also be considered illegal as no information is given for pre-contractual or contractual purposes about the existence and cost of the additional services described in the previous paragraph.The above reasoning is legally protected, being the most relevant legislation:

    • Bank of Spain Circular 8/1990 of 7 September 1990. Credit institutions. Transparency of operations and protection of customers: we highlight your third standard:

      The commissions and expenses charged must relate to services actually rendered or expenses incurred. In no case can commissions or expenses be charged for services not accepted or firmly requested by the client“.

    • Order EHA/2899/2011, of 28 October, on transparency and customer protection of banking services, states in its Article 3 that:

      “Commissions or charges may only be levied for services which are firmly requested or expressly accepted by a client and which respond to services actually rendered or expenses incurred”.

      The same article goes on to say:

      This information shall be available in all commercial establishments of credit institutions, on their electronic pages and on the electronic page of the Banco de España, and shall be available to customers at any time and free of charge.Law 7/1998, of 13 April, on General Contracting Conditions, perhaps the most ambiguous and at the same time most categorical in terms of the regulation of clauses included in contracts:The general conditions will become part of the contract when its incorporation into it is accepted by the adherent and signed by all the contracting parties. All contracts must refer to the general conditions incorporated. Acceptance of the incorporation of the general terms and conditions into the contract may not be deemed to have taken place if the predisponent has not expressly informed the adherent of their existence and has not provided him with a copy thereof“.

      And he goes further, saying:

      The following general conditions shall not be incorporated into the contract:

      a) Those that the adherent has not had a real opportunity to know completely at the time of the conclusion of the contract or when they have not been signed, when necessary.

      b) Those that are illegible, ambiguous, obscure and incomprehensible, except, as regards the latter, that have been expressly accepted in writing by the adhering party and conform to the specific regulations that discipline the necessary transparency of the clauses contained in the contract“.

In conclusion, the main features are:

  1. The contractual conditions governing bank charges should be detailed in a concise manner, specifying their scope and effects.
  2. The predisposing party (entity) must explicitly inform the adhering party (customer) of the inclusion of these provisions, ensuring a complete understanding of them.
  3. Bank fees must appear in the bank’s tariff book, as well as in the bank’s information media, with the prior approval of the Bank of Spain.
  4. Bank commissions must be expressly accepted by the member and respond in a real way to a service actually provided.
  5. Entities may not charge simultaneously a commission and an interest for the same service, it being understood that interest alone already constitutes a sufficiently remunerative element.
  6. The “additional” efforts to achieve an adequate provision of services should not be considered extraordinary events, but should be included in the daily activity of financial institutions.

Therefore, the reading of this post is only to make the bank client know their rights, being totally legitimate to show disagreement with the size of the charges.

 

November 11th, 2016

(Photo: M. Lorenzo)

A Court in Madrid has awarded 6 off-plan property buyers a grand total of circa four hundred thousand Euros, inclusive of interest, as a result of a bank guarantee claim filed against BBVA bank, the second largest in Spain.

The Court found against the bank as a result of the existence of a collective bank guarantee issued by the bank, despite no individual guarantees being available for each investor. On this occasion, it was not necessary to invoke the Supreme court case law as the merits for winning the case had been already established by previous Appeal Court rulings.