Real Estate 2013 - Pérez

The International Comparative Legal Guide to:
Real Estate 2013
8th Edition
A practical cross-border insight into real estate law
Published by Global Legal Group, with contributions from:
Ali Budiardjo, Nugroho, Reksodiputro
Law Point, Advocates & Solicitors
ART DE LEX Law Firm
Legance Studio Legale Associato
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LHA
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Marval, O’Farrell & Mairal
Dittmar & Indrenius
McCann FitzGerald
Estudio de la Flor, García Montúfar, Arata & Asociados
McKenna Long & Aldridge LLP
Figueroa, Illanes, Huidobro y Salamanca
Nishimura & Asahi
Gide Loyrette Nouel
P+P Pöllath + Partners
Gómez-Pinzón Zuleta Abogados S.A.
Pachiu & Associates
Gorrissen Federspiel
Pérez-Llorca
Hajji & Associés
Petres & Cvirn odvjetničko društvo
Herbert Smith Freehills
Portilla Ruy-Diaz y Aguilar, S.C.
Heward-Mills & Co Dantu Chambers
Schoenherr
KGDI Law Firm
Ziv Lev & Co. Law Office
Lang & Asociados
The International Comparative Legal Guide to: Real Estate 2013
General Chapter:
1
The End of Extend and Pretend: Non-Performing Loans in CEE/SEE - Denise R. Hamer, Schoenherr
1
Country Question and Answer Chapters:
2
Argentina
Marval, O’Farrell & Mairal: Santiago Carregal & Diego A. Chighizola
3
Australia
Herbert Smith Freehills: David Sinn
10
4
Austria
Schoenherr: Michael Lagler & Ayla Ilicali
18
5
Brazil
Demarest e Almeida Advogados: Adriana Khalil Daiuto
27
6
Bulgaria
Advokatsko druzhestvo Andreev, Stoyanov & Tsekova in cooperation with Schoenherr:
Peter Madl & Mariya Mihaleva
37
7
Canada
Blake, Cassels & Graydon LLP: Thomas von Hahn & Garth Anderson
45
8
Chile
Figueroa, Illanes, Huidobro y Salamanca: Juan Eduardo Figueroa Valdés &
Jose Manuel Figueroa Valdés
53
Gómez-Pinzón Zuleta Abogados S.A.: Paula Samper Salazar & Wilson Camilo Cantor
60
10 Costa Rica
Lang & Asociados: Henry Lang & Juan Carlos Cersosimo
67
11 Croatia
Petres & Cvirn odvjetničko društvo: Jana Cvirn Adamčić & Ksenija Hadžisejdić
75
12 Czech Republic
Schoenherr: Martin Kubánek & Pavla Šlapáková
84
13 Denmark
Gorrissen Federspiel: Hans-Peter Jørgensen & Jesper Avnborg Lentz
92
Group Publisher
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14 England & Wales
Herbert Smith Freehills LLP: Rachel A. Walker & James Barnes
100
15 Finland
Dittmar & Indrenius: Antti Aaltonen & Raija-Leena Ojanen
110
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P+P Pöllath + Partners: Dr. Wolfram Pätzold
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Matthew Eduku Miezah Anyimiah
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18 Greece
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Legance Studio Legale Associato: Gabriele Capecchi
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Colombia
27 Montenegro
Moravčević Vojnović i Partneri in cooperation with Schoenherr: Slaven Moravčević &
Ivan Pantović
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28 Morocco
Hajji & Associés: Amin Hajji & Salma Bedraoui Idrissi
29 Peru
Estudio de la Flor, García Montúfar, Arata & Asociados: Guillermo García Montúfar &
Moisés Arata Solís
226
30 Poland
Gide Loyrette Nouel: Hugues Moreau & Błażej Czwarnok
238
31 Romania
Pachiu & Associates: Ana-Maria Goga & Cecilia Badea
246
32 Russia
ART DE LEX Law Firm: Evgeny Arbuzov & Ivan Korolev
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33 Serbia
Moravčević Vojnović i Partneri in cooperation with Schoenherr: Slaven Moravčević
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The International Comparative Legal Guide to: Real Estate 2013
Country Question and Answer Chapters:
34 Slovakia
Schoenherr: Juraj Steinecker & Marcel Tuhý
272
35 Slovenia
Filipov o.p. d.o.o. in cooperation with Schoenherr: Ana Filipov
282
36 Spain
Pérez-Llorca: Sergio Agüera & Adriana Martín
288
37 Switzerland
LHA: Delphine Zarb
297
38 Ukraine
Schoenherr: Denys Sytnyk & Peter Madl
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39 USA
McKenna Long & Aldridge LLP: Christina Braisted Rogers
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40 Vietnam
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322
EDITORIAL
Welcome to the eighth edition of The International Comparative Legal Guide
to: Real Estate.
This guide provides the international practitioner and in-house counsel with a
comprehensive worldwide legal analysis of the laws and regulations of real
estate.
It is divided into two main sections:
One general chapter.
CEE/SEE region.
This chapter looks at non-performing loans in the
Country question and answer chapters. These provide a broad overview of
common issues in real estate laws and regulations in 39 jurisdictions.
All chapters are written by leading real estate lawyers and we are extremely
grateful for their excellent contributions.
Special thanks are reserved for the contributing editor Michael Lagler of
Schoenherr, for his invaluable assistance.
Global Legal Group hopes that you find this guide practical and interesting.
The International Comparative Legal Guide series is also available online at
www.iclg.co.uk
Alan Falach LL.M.
Group Consulting Editor
Global Legal Group
[email protected]
Chapter 36
Spain
Sergio Agüera
Pérez-Llorca
1 Real Estate Law
1.1
Please briefly describe the main laws that govern real
estate in Spain. Laws relating to leases of business
premises should be listed in response to question 10.1.
Those relating to zoning and environmental should be
listed in response to question 11.1.
The main laws governing real estate in Spain are the following:
Civil Code (“Código Civil”).
Property in Condominium Law (“Ley de Propiedad
Horizontal”).
Building Law (“Ley de Ordenación de la Edificación”).
Technical Building Code (“Código Técnico de la
Edificación”).
Adriana Martín
3 Real Estate Rights
3.1
What are the types of rights over land recognised in
Spain? Are any of them purely contractual between the
parties?
The types of rights over land in Spain are the following:
Ownership: Fee simple ownership of a property with no other
limitations than those stated in the Law.
Lease right: The right to use a property for a particular period of
time in exchange for paying rent.
Easement: The right to use the land of another person in a
particular manner, or to prevent that land from being used in a
particular way.
Mortgage Law and Mortgage Rules Law (“Ley
Hipotecaria” and “Reglamento Hipotecario”).
Surface right: The right to build on land owned by a third party,
with ownership of the building only.
Law on Compulsory Expropriation and Compulsory
Expropriation Regulation (“Ley de Expropiación Forzosa”
and “Reglamento de Expropiación Forzosa”).
Usufruct right: A right that allows the holder to use and obtain
profits from a property, while the bare ownership is held by a third
person.
Mortgage: A right to charge over land in order to secure a debt.
1.2
What is the impact (if any) on real estate of local common
law in Spain?
Real estate regulation in Spain, as a civil law jurisdiction, is based
on written rules issued by the Central Government and/or the
regional and local administrations. Therefore, local common law is
not applicable to real estate issues such as ownership, leases or
building law in Spain.
1.3
Are international laws relevant to real estate in Spain?
Please ignore EU legislation enacted locally in EU
countries.
International laws are not relevant to real estate in Spain.
2 Ownership
2.1
Are there legal restrictions on ownership of real estate by
particular classes of persons (e.g. non-resident persons)?
Generally speaking, there are no legal restrictions on ownership of
real estate by particular classes of persons in Spain.
Non-resident persons are allowed to purchase real estate in Spain
with no further restrictions than those related to tax, including the
obligation to declare the investment to the Spanish authorities.
288
Call option: A contractual right over land that allows the grantee
the option to call upon the land owner to sell the property to him.
Use right: A right that allows the holder to use the land, while the
bare ownership is held by a third person.
Emphyteusis right: A right of use for a particular period of time
(normally long-term and even in perpetuity) in exchange for paying a
fee to the landlord. Very similar to a long-term lease and usufruct right.
3.2
Are there any scenarios where the right to a real estate
diverges from the right to a building constructed thereon?
The most common scenario is when the surface right over a land
grants the tenant the ownership of the building while the landlord
remains the owner of the land. In Spain, a surface right cannot
exceed the maximum of 99 years amongst individuals or 75 years
when it is granted by the public administration.
4 System of Registration
4.1
Is all land in Spain required to be registered? What land
(or rights) are unregistered?
First of all, it should be pointed out that land in Spain is registered
both in the land registry and in the Cadastre.
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Although it is not compulsory to register a property before the Land
Registry, the registration gives protection to the owner against third
parties.
With respect to rights over land, registration is generally voluntary.
However, there are several rights for which registration is
compulsory, i.e. mortgage and surface rights.
There are some rights over land that are unregistered, that it to say,
they cannot be registered:
Personal rights.
Mere facts.
information provided by the Land Registry, although there are some
exceptions to this general rule.
4.6
On a land sale, when is title (or ownership) transferred to
the buyer?
The contract is binding between the parties after their consent to the
main elements of the contract and price. But the transfer of the
ownership to the purchaser requires that the seller also delivers the
land to the buyer. Unless otherwise agreed by the parties, it is
considered that the land is delivered to the buyer with the granting
of the sale and purchase deed.
Spain
Land Registry:
Spain
Rights in rem on real estate properties.
Titles relating to possession.
Rights on real estate properties that constitute a public
domain or easements imposed by law for public or
communal use.
Cadastre:
All land (not rights over land) in Spain must be registered in the
Cadastre.
4.7
Please briefly describe how some rights obtain priority
over other rights. Do earlier rights defeat later rights?
The general rule is “prior tempore, potior iure”, which means that
priority of a right is obtained by the earliest registration in the Land
Registry. In Spain, earlier rights take precedence over later rights.
5 The Registry / Registries
4.2
Is there a state guarantee of title? What does it
guarantee?
In Spain, there is no state guarantee, per se. Nevertheless, title is
guaranteed both by Notaries Public, who check the title of the seller
before granting a sale in terms of validity and enforceability, and the
Land Registry, which gives information about the title and
encumbrances of the land. The buyer who acquires a property from
the seller whose title is duly registered in the Land Registry is
protected from any claims on that property, except when the
purchaser is aware of the inaccuracy of the information provided by
the Land Registry.
4.3
What rights in land are compulsory registrable? What (if
any) is the consequence of non-registration?
Mortgage and surface rights are the only compulsorily registrable
rights in Spain. These rights do not come into force until after
registration in the Land Registry.
4.4
How many land registries operate in Spain? If more than
one please specify their differing rules and requirements.
There is only one Land Registry in Spain but it has different offices
throughout the Spanish territory, each of which serves a specific
geographical area, which all depend on the Ministry of Justice.
5.2
Does the land registry issue a physical title document to
the owners of registered real estate?
As a general rule, the land registry in Spain does not issue a specific
physical title document to the owners after registration of their title.
The physical title document of the parties is the sale and purchase
contract, which is normally granted by a notary. The first copy of
the deed is normally used as a title document. However, since the
land registry is public, anybody can ask for a certificate of the
information of the registry. In this case, the land registry would
issue a physical document with the details that were previously
registered in the land registry.
What rights in land are not required to be registered?
Except for the rights mentioned above, for which registration is
compulsory, and the rights mentioned in question 4.1 that are nonregistered, all other rights over land are not required by law to be
registered.
4.5
5.1
Where there are both unregistered and registered land or
rights is there a probationary period following first
registration or are there perhaps different classes or
qualities of title on first registration? Please give details.
First registration means the occasion upon which
unregistered land or rights are first registered in the
registries.
In Spain, there is no probationary period following the first
registration of title. Registration of land or of a right takes priority
over later registrations on the same land for the same rights.
However, when a title is first registered, it is not protected from
claims on that property (as referred to in question 4.2), as the title
has not arisen from a previously registered right. Rights which are
established later on are protected if the acquirer trusts the
5.3
Can any transaction relating to registered real estate be
completed electronically? What documents need to be
provided to the land registry for the registration of
ownership right? Can information on ownership of
registered real estate be accessed electronically?
Real estate property cannot be registered in the land registry
electronically.
Titles to be registered in the land registry have to be notarised
deeds, although there are exceptions to this general rule. Notaries
are entitled to submit electronic deeds issued by them to the land
registry. It provides the acquirer of the title with temporary priority
of its right before any third party, but in order to complete the
proper registration, the physical notarised deed must be registered.
Information on ownership of registered real estate can be requested
electronically through the website of the land registry
(http://www.registradores.org). In general, the requested information is
provided electronically within one working day of the request.
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5.4
Can compensation be claimed from the registry/registries
if it/they makes a mistake?
Compensation can be claimed by an injured party for mistakes
made by the land registry.
Spain
restructuring transaction, (ii) the transfer by Telefónica to Abertis of
a package of mobile telephone masts and the subsequent leasing by
Telefónica, and (iii) the development and construction by Ence of a
50 Mw biomass plant project located in Huelva.
Spain
6.4
5.5
Are there restrictions on public access to the register?
Can a buyer obtain all the information he might
reasonably need regarding encumbrances and other
rights affecting real estate?
Information registered in the land registry is public and accessible
to every individual in Spain.
6 Real Estate Market
Currently, investment in retirement or nursing homes is not a
significant practice in Spain.
7 Liabilities of Buyers and Sellers in Real Estate
Transactions
7.1
6.1
Which parties (in addition to the buyer and seller and the
buyer’s finance provider) would normally be involved in a
real estate transaction in Spain? Please briefly describe
their roles and/or duties.
Parties involved in a real estate transaction are:
A Notary Public, who notarises the deed granted by the
parties.
A Land Registrar, who is in charge of the registry where the
transaction is registered.
Lawyers, who give legal advice to the parties.
6.2
How and on what basis are these persons remunerated?
In Spain there is a Royal Decree which establishes the fees of the
Notaries and the Registrars, which varies depending on the type of
transaction and the value of the property or the right. However, in the
case of the Notary Public and depending on the type of transaction, it
is common practice for the parties to negotiate the fees.
The agreement between the parties on the main elements and price.
If the transaction is going to be registered with the land registry
(provided that registration is voluntary) the transaction must be
granted by means of a public deed before a Notary Public.
7.2
How has the real estate market in Spain recovered or
reacted following the global credit crunch and worldwide
recession in 2008/2010? What were the most important
real estate transactions in Spain in the past year? Please
include both local and international investors in your
answer.
The real estate market in Spain has been seriously affected by the
worldwide recession. Prices have decreased very severely since the
beginning of the crisis but depend on the type of property. The
price of real estate in premium areas has been far less affected than
those in less desirable locations. In general, prices have decreased
between 20 and 60 percent from their peak prices.
In the past year, banks have been the most active agents in the real
estate market. They are acquiring a large number of the properties
that were previously financed to developers and individuals as it has
become clear that people have not been able to meet their financing
obligations.
Some of the most relevant real estate transactions in Spain last year
were (i) the acquisition by BNP Paribas of the Nueva Condomina
Shopping Centre located in Murcia (one of the largest shopping
centres in Spain) from Nueva Condomina (a company owned by
Henderson and British Land) in the context of a financial debt
290
Is the seller under a duty of disclosure? What matters
must be disclosed?
Although it is not imposed by law (except for certain exceptions
like the existence of soil contamination, whose disclosure is
compulsory for the seller) it is common practice in real estate
transactions for the seller to declare the status of the real estate
property (i.e.: make a declaration of (i) the existence of any burdens
or encumbrances, (ii) the urban planning situation, (iii) the
existence of any contamination, (iv) the occupation of the property
by third parties, (v) the fulfilment of tax obligations of the property,
and (vi) the existence of any physical or technical defects, etc.).
7.3
6.3
What (if any) are the minimum formalities for the sale and
purchase of real estate?
In Spain, the minimum formalities for the sale and purchase of real
estate are the following:
Real estate agents or brokers, who act as an intermediaries
between sellers and buyers.
The Tax Authorities.
Is there a trend in Spain towards the investment in
retirement homes / nursing homes due to the increased
ageing of the population?
Can the seller be liable to the buyer for
misrepresentation?
According to the Spanish Civil Code, the seller is liable to the buyer
for any misrepresentations in the information provided on the status
of the property.
If the buyer has entered into a contract as a result of misinformation
provided by the seller, the buyer is entitled to claim for damages
from the seller and, in some cases, the buyer may be entitled to
terminate the contract and/or claim damages.
The seller’s liability for misrepresentation is prescribed under law,
which means that even if it is not provided in the agreement, it is
enforceable between the parties unless otherwise expressly agreed
between them.
7.4
Do sellers usually give contractual warranties to the
buyer? What would be the scope of these? What is the
function of warranties (e.g. to apportion risk, to give
information)? Are warranties a substitute for the buyer
carrying out his own diligence?
Apart from those warranties established by law (e.g. the Civil Code
provides liability for hidden defects for 6 months from the delivery
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Spain
of the possession), it is market practice that sellers provide
additional warranties to the buyers for the sake of the security of the
transaction. Normally, warranties do not substitute the own buyer’s
required due diligence.
8.3
7.5
In case of default of the borrower, the credit entity must proceed to
the declaration of early termination of the loan. This declaration
empowers the lender to execute the mortgage, that is to say, to
realise the mortgage property.
First of all, at the time of granting the public sale and purchase
deed, the seller must give evidence of his/her title, which is also
referenced in the deed. Aside from that, it is market practice that
the public notary or the buyer himself requests information on the
property to the land registry so they can confirm that the seller is the
real owner.
It should be noted that if the transaction is carried out relying on the
information of the land registry (except in cases of bad faith of the
buyer), the acquisition is protected by law, without prejudice to the
seller’s eventual liability to any third party.
7.6
What (if any) are the liabilities of the buyer (in addition to
paying the sale price)?
The buyer shall pay the corresponding taxes for the transaction and
record the acquisition at the cadastre.
Apart from that, the buyer does not have any other general specific
liabilities, except for those agreed in the contract.
8 Finance and Banking
8.1
Please briefly describe any regulations concerning the
lending of money to finance real estate. Are the rules
different as between resident and non-resident persons
and/or between individual persons and corporate entities?
The lending of money to finance real estate in Spain is mainly
regulated by the following laws:
Law Governing the Mortgage Market (“Ley Reguladora
del Mercado Hipotecario”).
Mortgage Law (“Ley Hipotecaria”).
In Spain, there are two different proceedings regarding the
realisation of mortgaged properties:
Judicial foreclosure proceeding: this proceeding is conducted
before the court and consists of an auction whose development is
embedded in the law. In general, during the auction, the property
can be awarded to a bidder who offers at least 70 percent of the
value of the property as established in the mortgage deed. If no bids
are submitted in the auction, the financial entity is entitled to ask to
be awarded the property for a minimum price which can range from
50 to 60 percent of the value of the property, depending on the type
of property.
Out-of-court proceeding: this proceeding is conducted before a
Notary Public and it can only be used if the parties have agreed on
its application in the mortgage deed. The deed must also contain
the value of the property for the purpose of the auction. In general,
during the auction that takes place before the Notary, the property
can be awarded to a bidder who offers at least 70 percent of the
value of the property as established in the deed of mortgage. If no
bids are submitted in the auction, the financial entity is entitled to
ask to be awarded the property for a minimum price of 60 percent
of the value of the property. This out-of-court proceeding is faster
than a judicial proceeding.
Lately, there have been several legal reforms to prevent borrowers
from being evicted from their homes. The most important
regulation comes from Royal Decree 27/2012, on the protection of
borrowers, which states that borrowers who are not able to meet
their mortgage payments, and who fulfil certain economic
requirements cannot be evicted for a period of up to two years.
8.4
Mortgage Regulations (“Reglamento Hipotecario”).
These laws constitute the main regulations regarding the financing
of real estate. However, these laws have been amended several
times in order to adapt them to market requirements. Some of the
legislation that has modified the abovementioned laws are: (i)
Royal Decree 716/2009, which develops several aspects of the Law
Governing the Mortgage Market; and (ii) Royal Decree 692/1996,
on the regime of credit finance entities. One of the objectives of
these decrees is to make the financing of real estate transactions
more transparent.
Except for certain formalities and the taxes related to the
transaction, there is no difference in the rules applied to nonresident persons. With respect to corporate entities, usually the
warranties given in the transaction in order to ensure the repayment
of the credit to the lender are different to those for individuals.
8.2
What are the main methods by which a real estate lender
seeks to protect itself from default by the borrower?
Spain
Does the seller warrant its ownership in any way? Please
give details.
What are the common proceedings for realisation of
mortgaged properties? Are there any options for a
mortgagee to realise a mortgaged property without
involving court proceedings or the contribution of the
mortgagor?
What minimum formalities are required for real estate
lending?
A loan for real estate secured by a mortgage, which is market
practice, must be granted in writing before the Notary Public in a
public deed and registered with the land registry. The registration
of the mortgage is constitutive, which means that, until the moment
of its registration, the mortgage is not effective or enforceable.
8.5
How is a real estate lender protected from claims against
the borrower or the real estate asset by other creditors?
In Spain, the principle of earliest registration applies, which means
that the mortgage registered with the land registry has priority over
the other encumbrances registered subsequently. Therefore, the
lender that has secured the loan by a mortgage as a first right duly
registered in the land registry cannot be affected by any later claims
against the same borrower.
Also, it should be noted that in the event of bankruptcy of the
borrower, the credit secured by a mortgage has a preferential right
over other creditors.
The main method for the lender to protect himself from default by
the borrower is to constitute a mortgage over the real estate
property. Apart from the mortgage, some of the most used
warranties are personal warranties or pledges of shares.
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9 Tax
Spain
9.1
Are transfers of real estate subject to a transfer tax? How
much? Who is liable?
Transfers of real estate that are not subject to VAT or IGIC (i.e. the
Canary Islands “VAT”), or are subject to but exempt from
VAT/IGIC, are subject to Transfer Tax at rates ranging from 6 to 11
percent, depending on the region where the asset is located and its
value.
9.5
What other tax or taxes (if any) are payable by the seller
on the disposal of a property?
Transfers of real estate assets qualifying as, or located on, urban
land are subject to the Municipal Tax on Appreciation of Urban
Land (“Impuesto sobre el Incremento de Valor de los Terrenos de
Naturaleza Urbana”).
9.6
Is taxation different if ownership of a company (or other
entity) owning real estate is transferred?
Transfer Tax is levied on the market value of the asset (i.e. the debt
that cannot be reduced, even if secured by a mortgage) and the
taxpayer is the buyer.
Yes. In principle, no VAT, Transfer Tax or Stamp Duty is levied
upon the transfer of the shares of a company.
9.2
However, Article 108 of the Spanish Securities Law, which has
recently been significantly amended, includes an anti-abuse rule in
the event that the share deal is mainly aimed at avoiding VAT or
Transfer Tax that the underlying real estate asset deal would have
triggered.
When is the transfer tax paid?
Transfer Tax must be paid within the month or thirty working days
(depending on the region) following the date of the transfer.
9.3
Are transfers of real estate by individuals subject to
income tax?
Yes, capital gains from transfers of real estate are taxable income
for the purposes of the Personal Income Tax. This kind of income
is taxed at progressive rates: 21 percent (up to €6,000); 25 percent
(from €6,001 to €24,000); and 27 percent (above €24,000). These
rates are expected to be lowered to 19 percent (for the first €6,000)
and 21 percent (above €6,000) as of 2014. Transfers of residence
by persons over 65 years of age are not taxed.
9.4
Are transfers of real estate subject to VAT? How much?
Who is liable? Are there any exemptions?
In order for transfers of real estate assets to be subject to VAT, the
seller must qualify as a VAT entrepreneur and the assets must be
used for the running of the economic activities of the seller.
Notwithstanding the above, transfers not qualifying as a first
transfer of buildings (i.e. second or subsequent transfers) and
transfers of rural land (e.g. the development works have not been
physically initiated or the relevant construction licence has not been
granted) are exempt from VAT. This exemption can be waived if
the buyer is entitled to full VAT recovery.
If the transfer is not exempt from VAT or should the exemption be
waived, the transfer would be taxed at a rate of 10 percent (4
percent until 31 December 2012) for residential assets and 21
percent for other types of real estate assets. The taxpayer is
generally the seller, who is entitled to charge the buyer for VAT.
However, recently approved rules establish that the taxpayer is the
buyer in the following scenarios: (i) when the VAT exemption is
waived; (ii) when the transfer takes place upon the enforcement of
a guarantee; or, finally, (iii) if the transfer takes place within the
framework of bankruptcy proceedings.
If the transfer is subject to and not exempt from VAT (i.e. the VAT
exemption does not apply or is waived), the public deed by means
of which the transaction is documented would be subject to Stamp
Duty at rates ranging from 0.5 percent to 2 percent (depending on
the region and on whether the VAT exemption had been waived).
The Stamp Duty taxpayer is the buyer. Should the transfer be
subject to but exempt from VAT (i.e. subject to Transfer Tax), no
Stamp Duty would be triggered as Stamp Duty and Transfer Tax are
incompatible.
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However, no VAT or Transfer Tax accrues upon acquisitions of
controlling stakes in companies which mainly own real estate
located in Spain, or real estate subsidiaries, if the real estate assets
are assigned to entrepreneurial activities of the companies, which
leaves out of the anti-abuse rule numerous scenarios in which the
former rule was unreasonably applied, such as the transfer of
companies owning wind parks or solar plants for instance.
10
Leases of Business Premises
10.1 Please briefly describe the main laws that regulate leases
of business premises.
The main laws that regulate leases of business premises are the Law
on Urban Leases and the Civil Code.
10.2 What types of business lease exist?
The types of business lease that exist in the Spanish legal system are
(i) the lease of business premises, and (ii) lease of industry. The
object of the lease of business premises is a property while the
object of the lease of industry, apart from the real estate, includes
other rights and assets of a running business like licences,
intellectual property, and other goods necessary to continue with the
activity.
10.3 What are the typical provisions for leases of business
premises in Spain regarding: (a) length of term; (b) rent
increases; (c) tenant’s right to sell or sub-lease; (d)
insurance; (e) (i) change of control of the tenant; and (ii)
transfer of lease as a result of a corporate restructuring
(e.g. merger); and (f) repairs?
The general rule for leases of business premises is that the parties
are entitled to set forth the provisions of a lease agreement with no
limitations, except for certain aspects of the law that are
compulsory such as the rent guarantee.
The typical provisions for leases of business premises are the
following:
a)
Length of term
There are no general rules. It depends on each individual case but
it is market practice that the parties agree on (i) a compulsory term
for both parties in which the agreement cannot be terminated, and
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b)
Rent increases
Rent is usually updated every year according to the Consumer Price
Index. Additionally, the parties may agree to update the rent to
market price at certain points, which typically occurs every 5 years.
c)
Tenant’s right to sell or sublease
Except when otherwise agreed by the parties, the tenant has the
right to transfer his position in the contract or sublease and the
landlord has the right to increase the rent. However, the parties
usually restrict the tenant’s right to assign or sublease.
d)
Insurance
Normally, the parties agree that the tenant insures the public
liability of the activity while the landlord insures the premises.
e)
(i) Change of control of the tenant
Although nothing is stated in the law in this regard, in general, the
Spanish courts consider that the change of control of a tenant -a
transfer of more than 50 percent of the shares of the tenant
(company)- is considered an assignment of the contract.
e)
(ii) Transfer of lease as a result of a corporate
restructuring (e.g. merger)
Neither the transformation nor the merger or division of the tenant’s
company is considered as a lease assignment. However, in any of
these cases the landlord has the right to increase the rent.
f)
Repairs
Repairs to be borne by the landlord: preservation of the main
structure of the premises.
Repairs to be borne by the tenant: repairs or works due to the
ordinary use of the premises.
10.4 What taxes are payable on rent either by the landlord or
tenant of a business lease?
The rent of a business lease is subject to VAT at the general rate of
21 percent.
Additionally, should the lease agreement be documented in a public
deed, it would be subject to Stamp Duty at rates ranging from 1 to
1.5 percent (depending on the region). The Stamp Duty taxpayer is
the tenant.
A withholding tax of 18 percent of the rent must be made by the
tenant unless certain specific conditions are met by the landlord.
10.5 In what circumstances are business leases usually
terminated (e.g. at expiry, on default, by either party
etc.)? Are there any special provisions allowing a tenant
to extend or renew the lease or for either party to be
compensated by the other for any reason on termination?
Unless otherwise agreed by the parties, according to law, business
leases are terminated for the following reasons:
Expiry of the term agreed in the contract.
Failure to pay rent.
Failure to pay the rent guarantee or its update.
In the event that the tenant carries out any unhealthy or
damaging activities in the premises.
10.6 Does the landlord and/or the tenant of a business lease
cease to be liable for their respective obligations under
the lease once they have sold their interest? Can they be
responsible after the sale in respect of pre-sale non
compliance?
Although the lease agreement has been terminated, both parties
could be liable for any damages caused to the other party during the
term of the lease.
Spain
(ii) another period that is normally voluntary for the tenant and
compulsory for the landlord.
Spain
10.7 Green leases seek to impose obligations on landlords
and tenants designed to promote greater sustainable use
of buildings and in the reduction of the “environmental
footprint” of a building. Please briefly describe any “green
obligations” commonly found in leases stating whether
these are clearly defined, enforceable legal obligations or
something not amounting to enforceable legal obligations
(for example aspirational objectives).
In Spain, the Law on Urban Leases does not directly impose any
obligation on landlords or tenants to promote greater sustainable
use of buildings. However, Law 19/2009 of November 23 on
measures for the promotion and procedural facilitation of leasing
and energy efficiency of buildings has introduced a series of
amendments to the Law on Urban Leases, the Code of Civil
Procedure and the Condominium Property Law. One of the main
amendments introduced by this law is to facilitate the procedure
required in order to carry out works that improve the sustainability
of the building.
11
Public Law Permits and Obligations
11.1 What are the main laws which govern zoning and related
matters concerning the use and occupation of land?
Please briefly describe them and include environmental
laws.
The main laws governing zoning and related matters concerning use
and occupation of land in Spain are the following:
Land Law (“Ley del Suelo”): This law establishes the classification
of the land, its development and uses.
Law on Compulsory Expropriation (“Ley de Expropiación
Forzosa”): This law establishes the occupation of land proceedings
by the public authorities.
Urban Management Regulations (“Reglamento de Gestión
Urbanística”): This law develops the Land Law, and in particular
the development and uses of the land.
Coastal Law (“Ley de Costas”): This law regulates the occupation
and use of public hydraulic domain and coastal waters.
Environmental Liability Law (“Ley de Responsabilidad
Medioambiental”): Establishes the liability for land contamination.
Waste and Soil Pollution Law (“Ley de Residuos y Suelos
Contaminados”): Sets out the regulations to avoid contamination of
land and decontamination measures.
It is important to note that urban planning and environmental
matters are the competence of regional and local governments,
which means that these governments also legislate on these matters.
In general, in the event of any breach of contract.
The tenant is entitled to ask for compensation if a business has been
run on the premises for more than 5 years and the landlord has
denied the renewal of the term to the tenant at the end of the term.
11.2 Can the state force land owners to sell land to it? If so
please briefly describe including price mechanism.
The government has the authority to force owners to sell their
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property for environmental or urban planning reasons or
obligations.
regulations on their specific cultural heritage. Said laws aim to
preserve, enrich and properly exhibit national cultural heritage.
This proceeding is regulated by the Law on Compulsory
Expropriation and gives the owner the right to compensation, which
is calculated according to the value of the land and, in some cases,
it is negotiated between the government and the owner.
In Spain, protected property must not be altered and often building
work carried out on them must be authorised by the authorities
under special protection. This, however, depends on the level of
protection the property has. Logically, less building work can be
carried out on property that is more highly protected.
11.3 Which bodies control land/building use and/or occupation
and environmental regulation? How do buyers obtain
reliable information on these matters?
In general, protected property can be transferred with no
restrictions, although, depending on the applicable regulation, the
authorities may have a right of first refusal on the properties.
In general, it is the Town Halls who exercise control over land or
building use and occupation. However, in Spain, regional
governments can also exercise powers of inspection and control.
Buyers can obtain reliable information by requesting it from the
corresponding Town Hall. Usually, this information should be
requested in writing by means of an official request form.
11.4 What main permits or licences are required for building
works and/or the use of real estate?
Building works: in order to execute building works it is necessary
to obtain a “Works Licence”. Once the works are finished, a “First
Occupation Licence” is required, which certifies that the works
have been carried out in accordance with the prior licence obtained.
In some regions of Spain, a First Occupation Licence is substituted
by the certificate of habitability.
Use of real estate: in order to carry out an activity on a premise it
is necessary to obtain the corresponding “Activity Licence”, in
order for the authorities to be able to verify that the particular
activity will meet administrative requirements. Once the
refurbishment and adaptation works of the premises have been
terminated and before starting the activity, it is compulsory to
obtain an “Opening and Functioning Licence” so that the authorities
can verify that the premises meet the requirements of the activity
licence granted.
Also, if owners fail to comply with the obligations arising from the
protection, the property can be expropriated for reasons of public
interest.
11.8 How can e.g. a potential buyer obtain reliable information
on contamination and pollution of real estate? Is there a
public register of contaminated land in Spain?
According to Royal Decree 9/2005, of 14 January, sellers must declare
this circumstance on the sale and purchase deeds of properties where
potentially pollutant activities have taken place. The declaration of
the possible contamination of the land must be registered with the
Land Registry. Since the information in the Land Registry is public,
any potential buyer can obtain information about the contamination of
real estate. However, in practice, the information in the land registry
in this regard is not usually updated or reliable.
According to the Waste and Soil Pollution Law, governments must
produce a register of contaminated soils. The regional governments
are responsible for maintaining this registry but it is not currently
updated by every regional government in Spain.
11.9 In what circumstances (if any) is environmental clean up
ever mandatory?
11.5 Are building/use permits and licences commonly obtained
in Spain? Can implied permission be obtained in any way
(e.g. by long use)?
According to Royal Decree 9/2005 on Waste and Soil Pollution
Law, when the land is declared to be polluted, all necessary
measures in order to restore the environment and clean up the land
are obligatory. The authorities will establish the terms and
conditions under which said measures must be carried out on a
case-by-case basis.
Licences are generally obtained in Spain. Implied permissions
cannot be obtained under any circumstances. Licences must be
expressly granted by the Town Hall or the regional government.
11.10 Please briefly outline any regulatory requirements for the
assessment and management of the energy performance
of buildings in Spain.
11.6 What is the appropriate cost of building/use permits and
the time involved in obtaining them?
The cost and timing involved in obtaining permits depends on the
Town Hall in question. The most significant cost of a building
permit is a municipal tax that can be up to 4 percent of the total cost
of the construction. It can take from approximately 3 to 6 months
to obtain the licence.
11.7 Are there any regulations on the protection of historic
monuments in Spain? If any, when and how are they
likely to affect the transfer of rights in real estate?
In Spain, both central and regional legislation contain requirements
regarding the energy performance of buildings. In this regard, the
main laws in which said requirements are contained are the
Building Planning Act and the Technical Building Code. Basically,
these laws establish the minimum criteria that buildings must meet
regarding security, functionality and habitability, as well as several
aspects for saving energy in buildings.
In this respect, there are further sector-specific regulations such as
the Electric Sector Law or the Law for Energy Efficiency, which
aim to improve buildings in order to make them more sustainable
and respectful of the environment, including measures for saving
energy, reducing gas emissions, and improving energy efficiency,
among others.
Historic monuments in Spain are legally protected, by the state, by
Law 16/1985 of Spanish Historical Heritage (“Ley de Patrimonio
Histórico Español”) and by Royal Decree 111/1986, which partially
developed the Law. Some regions also have their own particular
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Climate Change
12.1 Please briefly explain the nature and extent of any
regulatory measures for reducing carbon dioxide
emissions (including any mandatory emissions trading
scheme).
The objective of reducing the emission of carbon dioxide in the
atmosphere is established in several laws and regulations in Spain,
such as the following:
Law 26/2007 on Environmental Liability, implemented
into Spanish law by Directive 2004/35/CE of the European
Parliament and Council on environmental liability with
regard to the prevention and remedying of environmental
damage. It is worth stressing that this Law aims to make
corporations responsible for the damage they cause to certain
natural resources.
Law 40/2010 on Geological Disposal of Carbon Dioxide,
which aims to comply with a European Directive from 2009
on this matter. Through this Directive, countries can fulfil
the agreement reached by the Member States in March 2007,
in order to reduce greenhouse gas emissions.
12.2 Are there any national greenhouse gas emissions
reduction targets?
In this regard, the Spanish Government, through the Ministry of
Environment, issued the Spanish Strategy on Climate Change and
Clean Energy in 2007 that included several measures for the periods
2007-2012-2020.
The measures for the abovementioned period aim to reduce the
emissions of carbon dioxide by 238,130 Mt (which means 47,626
Mt per year).
In the measures for the period until 2020, the Strategy itself
anticipated the elaboration of a new plan, which focused on the
consumption of renewable and alternative energies. This plan was
issued as the “Plan for renewable sources of energy for the period
2011-2020” and its main target is that at the end of 2020, 20 percent
of the total energy consumption will come from renewable sources
of energy.
Spain
12
Spain
12.3 Are there any other regulatory measures (not already
mentioned) which aim to improve the sustainability of
both newly constructed and existing buildings?
Aside from those mentioned in the previous questions, it is
important to highlight the following regulations:
Royal Decree 315/2006, of 17 March, by virtue of which a
Council for sustainability, innovation and quality in the
construction of buildings has been constituted. This Council
belongs to the Ministry of Housing, as this is the organism
which seeks to meet the quality objectives of the buildings of
the Building Planning Act.
Royal Decree 47/2007 on Building Energy Efficiency
Certification, which implemented the obligations provided
in Directive 2002/91/CE. This certification assigns each
building with a level of efficiency (an “energy efficiency
class”), ranging from class A for the most energy efficient
buildings to class G for the least efficient.
For the period 2008-2012, the Strategy establishes the specific
measures, the entities responsible for its implementation, the
timings, the cost and the aimed reductions in the emissions, which
have greatly increased in the past few years.
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Sergio Agüera
Adriana Martín
Pérez-Llorca
Diputació 260, 4º
08007 Barcelona
Spain
Pérez-Llorca
Diputació 260, 4º
08007 Barcelona
Spain
Tel:
Fax:
Email:
URL:
Tel:
Fax:
Email:
URL:
+34 93 481 3075
+34 93 481 3076
[email protected]
www.perezllorca.com
Sergio Agüera is a legal expert in real estate and M&A
transactions. He joined PEREZ-LLORCA in 2001 and was made
partner in January 2011. His working languages are Spanish,
Catalan and English.
Based in Barcelona, Sergio has acquired extensive professional
experience providing legal advice to Spanish and international
clients on all kinds of real estate and M&A transactions. Sergio
works with various agents in the investment, development and
construction sectors and advises businesses in the area of real
estate intermediaries.
His clients’ activities include the
development of office buildings, business parks, commercial and
leisure centres and residential buildings.
Furthermore, Sergio has extensive experience in real estate
transactions involving the divestment of various real estate
portfolios, formalising not only individual transactions, but also
joint transactions of entire portfolios composed of housing, offices
and car parks. Sergio also has additional experience in the real
estate market advising clients on joint-ventures, commercial
leases, real estate financing, sale and lease backs, forward
funding transactions, restructuring and dispute resolution.
+34 93 481 3075
+34 93 481 3076
[email protected]
www.perezllorca.com
Adriana Martín joined PEREZ-LLORCA in 2008, after completing
an internship at the Catalonian High Court of Justice in 2007. In
the summer of 2009, she undertook a secondment at Vueling
Airlines. Her working languages are Spanish, Catalan and
English.
Based in Barcelona, Adriana is part of Pérez-Llorca’s Real Estate
and Corporate department. She has worked on the sale and
purchase of real estate assets and their structuring, as well as on
project finance, the leasing and development of office complexes,
business parks and residential complexes.
She regularly takes part in commercial law transactions of
companies in the real estate sector, drafting documents,
contracts and reports in relation to companies integrated in
different sectors. She has participated in several transactions,
including the due diligence process in national transactions.
She has also collaborated with the public law department,
working on (i) the implementation of housing and commercial
projects, (ii) the management of licences and authorisations, and
(iii) the preparation of administrative appeals and litigation.
Established in 1983, Pérez-Llorca is one of the leading independent Spanish law firms due to the solid legal background,
experience and continuous training of its members, as well as their dedication to quality and efficiency. The firm advises both
international and domestic clients, including major banks, major international real estate developers and investors, national and
regional government authorities, public and private companies and prestigious foreign law firms.
The corporate department, of which the real estate practice is part, has been a fundamental pillar of Pérez-Llorca since its
foundation and is considered to be one of the strongest legal teams in Spain. The team has considerable experience in all areas
of real estate, including real estate development, construction, transfers and acquisitions of real estate assets in all their forms,
leasing, sale & leaseback, regularisation and transfer of large portfolios, restructuring and real estate financing. The experience
of the team is particularly noteworthy in the tertiary sector assets (business parks, offices, shopping centres and retails parks,
hotels and logistics centres). Among Pérez-Llorca’s main national and foreign clients are well-known real estate investment funds,
banks, insurance companies, final operators, industrial and service companies, as well as a large number of the most important
real estate companies and developers in the sector.
Firm practice areas: Administrative Law; Antitrust; Arbitration; Banking & Finance; Capital Markets; Corporate; Energy;
Inspections; Intellectual Property; Labour; Land Planning; Litigation; Mergers & Acquisitions; Private Equity; Projects; Real Estate;
Regulated Sectors; Restructuring & Insolvency; Tax; and White Collar Crime.
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