Spanish Property Administration – Legal Solutions for Heirs and Property Owners in Spain
Property Administration in Spain: Legal Guidance for Overseas Owners and Heirs Based in the UK, US, Australia, Ireland, New Zealand and Beyond
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Spanish Property Administration Lawyers
Managing property from a distance can be complicated at the best of times but when added to unfamiliarity with the local law in Spain the complexity for heirs and other third parties having to deal with Spanish property can be daunting.
Clients need not just legal advice but also hands-on solutions to help them manage or dispose of property which in some case has become a liability.
The issues that can arise range from bad relations between siblings or with second families, properties being occupied by co-owners and how to finance the payment of taxes, to practical matters such as arranging a house clearance, giving the property a facelift or negotiating a fair commission or market terms with an agent when selling a property.
These situations are encountered by inheritors inheriting property in Spain, by ex-spouses who have to divide up jointly owned property on divorce, trustees in bankruptcy realising a debtor’s assets in Spain or by individuals for whom, with the passing of time, the property in Spain has becomes a burden.
Significant numbers of ex-pats also want to liquidate their property in Spain and return to the UK to avoid the high tax rates on death for their children. Brexit too has acted as a disincentive for many foreign homeowners who find that the new 90 day rule limiting their stay in Spain is excessively restrictive.
The inheritance process in Spain is usually conducted before a notary and requires the agreement of all the heirs. It is not unusual to find that different heirs have disparate aims and expectations. In this situation, it is important that your lawyer is empathetic and able to connect with the different views and sensibilities of the different heirs, usually through presenting a clear picture of the legal position and realities of the situation. Where the heirs are British and Spanish and English law is involved, an understanding of both systems of law is crucial to achieving a consensual outcome.
The Importance of an Expert Understanding of both English and Spanish Law
An expert understanding of both English and Spanish law is also required to achieve the most time- and cost-effective solutions; the opposite is also true. One very frustrated client, a UK charity, came to us after years of delay where it transpired that their previous Spanish lawyer had mistaken the tax applicable by the taxation of a legacy by a non resident charity.
Sometimes, in cross-border cases, where the British testator lived in Spain, clients receive conflicting advice about whether an English Grant of probate is required. This may stem from a narrow orthodox approach taken by the client’s English solicitor or his Spanish lawyer’s stereotyped and inaccurate understanding of English law. Where probate is not necessarily required and we can provide a different legal solution, this obviously represents a considerable saving in time and money for the client.
The same is true in many other cases. For example, in cases involving multiple beneficiaries where ordinarily all of them would be required to have a NIE number and grant a notarial power-of-attorney; costs can be significantly reduced where an alternative solution can be implemented involving fewer NIEs and PoAs. Similarly, unnecessary complications concerning the role and powers of the Executor or Administrator may be avoided and a solution provided which reduces costs when English law is properly expounded and presented to the Spanish notary and land register.
Another example of expert knowledge of Spanish and English law being crucial is the case of an Attorney wishing to exercise powers under an English Lasting Power of Attorney to dispose of a UK owner’s/Grantor’s property in Spain, where a proper understanding and presentation of English law is fundamental to proving the validity and legal effect in Spain of an English LPA.
A Commercial Approach, with Creative Solutions
As well as the ability to bring parties together and negotiate an agreement, we know the importance of taking a commercial approach, shrewd judgment and providing creative solutions for the client. One of our clients, a UK trustee in bankruptcy, expected us to pursue legal action through the courts against the property of a debtor in Spain, which was jointly-owned with his partner. Seeing that the debtor was a hardened fraudster, we recognised that the weak spot was his partner. We contacted the partner making it clear to her that our action would put her home in jeopardy and, as a result of her putting pressure on him, the debtor paid up.
Negotiating skills and sometimes aggressive court action are also required in another frequent area of our work, which is the extinction of joint ownership of property.
Get expert Spanish Property advice
Contact us today for a Free Initial Consultation about how we can help you:
Call UK: +44 20 8059 2079 | Call Spain: +34 915 939 126 | email: mail@scudamorelaw.com
“Wonderful team of professionals. All bilingual in Spanish and English. Understand multiculturalism and have lots of experience. Fully recommend.”
“Expert law firm, providing services in various areas of Spanish and EU law. Excellent advice and guidance provided, especially in immigration matters for non-EU individuals.”
Divorce, Loss of Capacity and Division of Jointly Owned Property in Spain
This can arise upon divorce (where is his important to keep in mind the tax consequences of any unequal division of the property or compensation in cash or for a UK property), or as a result of several heirs inheriting the same assets, or where one spouse develops dementia and the other spouse ends the relationship and seeks to take advantage of the situation.
Where these situations cannot be dealt with amicably, court proceedings have to be taken for the division of the jointly owned property. We are accustomed to dealing with claims in respect of the respective parties’ contributions to the purchase and maintenance of the property and settlement agreements where the release from mortgage obligations by the exiting co-owner is a priority. These proceedings rarely finish in a sale by auction as the parties usually agree before then (if one does not buy the other out) to sell the property through an estate agent for an agreed price.
Making the Legacy Financially Viable
When deciding what to do with a property, financial pressures can be the determining factor, such as where the heir is unrelated to the testator (so no tax reductions apply) and faces an exorbitant inheritance tax bill, or is a family member but cannot afford to pay the inheritance tax or take the property on. In these cases, the client’s priority – if they feel able to accept the inheritance at all – is to know how they can obtain the benefit of the inheritance and pay the tax.
If there is a Spanish bank account with sufficient funds, we can assist by arranging with the bank for payment of the tax out of funds in the account so the property can be put into the names of the heirs and then sold, thus avoiding them having to advance money to pay the tax before receiving their inheritance.
Another option may be, where there is a buyer for the property, to structure the sale so that the parties enter into a private contract of sale whereby the buyer pays an up-front deposit, out of which the heirs can pay the inheritance tax and register the property in their names, thus avoiding them having to advance their own money to pay the tax before receiving the cash form the inheritance.
An analogous situation is where the value, condition and legal situation of the property were such as to make the legacy financially unviable. In one such case, the client’s object was simply to offload the liabilities. These took the form of ongoing legal action by the community of owners for non-payment of service charges and by the town hall for tax arears, and ongoing monthly community payments for structural repair work to the building.
To sell the property they would have had to pay legal fees and other costs, such as house clearance, painting/refurbishment work, estate agent’s fees, etc.. We were able to help by introducing them to an investor who took on all of the liabilities of the property, allowing the client to exit from what was an unworkable situation and cut their costs.
Need Help with Your Spanish Property? Let Our Legal Experts Guide You to the Best Solution.
At Scudamore Law, we seek to provide the best legal advice and most practical solutions for our clients which respond to their needs, whether these be to streamline the sale of the property to a third party, to alleviate liquidity issues or to terminate and dispose of unwanted liabilities.
We aim always to be of help to our clients and, where appropriate, effect introductions to potential buyers, investors or sellers from amongst our contacts and substantial portfolio of clients that we have built up over more than 25 years in business in Spain, whom we know personally and have worked with. Where we can advance our clients’ interests, we go that extra mile to achieve the best possible outcome.
Why choose Scudamore Law?
Expert Spanish legal advice – A British sense of professionalism
Scudamore Law is an established Anglo-Spanish firm providing legal services to foreign investors for over 20 years. Our lawyers are qualified English and Spanish lawyers. We are specialist international corporate lawyers and are experts in both English and Spanish company law. We communicate in native English in language you understand.
20+ experience
We communicate in native English
Reliability
Highly personalised service
Flexible, commercial approach
Price transparency
As such, we are the firm of choice for foreign investors. Although we mainly deal with Spanish and cross-border transactions, we firmly uphold English quality standards akin to what you would expect from a firm based in England.
Our clients are based all over the world, so we are happy to communicate in the ways that are most convenient for you. This could be phone calls and emails, video conferencing, or you are more than welcome to arrange face-to-face meetings at our offices in London, Madrid and Almería.
What our clients say about us
“Expert law firm, providing services in various areas of Spanish and EU law. Excellent advice and guidance provided, especially in immigration matters for non-EU individuals.” – Google reviews
“Wonderful team of professionals. All bilingual in Spanish and English. Understand multiculturalism and have lots of experience. Fully recommend.” – Google reviews
GET EXPERT ADVICE ABOUT SPANISH PROPERTY ADMINISTRATION
Contact us today for a Free Initial Consultation about how we can help you with Spanish Property Administration:
Call UK: +44 207 097 5550 | Call Spain: +34 915 939 126 | email: mail@scudamorelaw.com
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Email: mail@scudamorelaw.com
Tel. UK: +44 207 097 5550
Tel. Spain: +34 915 939 126