GIPE Newsletter (Nº 24.147) February, 20th 2025
LEASES:
I MADE A MISTAKE WHEN COMMUNICATING THE RENT INCREASE
If you have informed your tenant about an increase in the rent and subsequently detect an error in the calculation, it is important to rectify the situation appropriately.
If the error has caused the new amount to be lower than the legally corresponding amount, it is enough to issue a new notice to the tenant to correct the amount and collect the difference not paid due to this arithmetic error. If the tenant refuses to pay the correct amount, the landlord may initiate eviction proceedings for non-payment.
On the other hand, if the error has resulted in an increase greater than that permitted by law or agreed in the contract, the tenant has the right to:
- Request reimbursement of the amounts paid in excess.
- Demand the correction of the rent amount.
If the error is detected before making the payment, the tenant may refuse to pay the incorrect amount and formally request rectification.
To avoid potential conflicts, landlords are advised to:
✔ Carefully review the calculations before notifying the rent increase.
✔ Consult official sources, such as the National Institute of Statistics (INE), to calculate the corresponding adjustments.
✔ Keep a documented record of all communications related to the rent update.
SELLING PROPERTIES:
CANCEL THE MORTAGE WITH THE SALE PRICE
If you want to sell a property that still has an outstanding mortgage and you plan to settle the debt with the money from the sale, you may find that the buyer demands that the mortgage be cancelled before completing the transaction.
Coordination of Processes
It is common for properties for sale to have active mortgages that the buyer does not have to assume, so these must be cancelled beforehand. In addition, if the buyer needs to apply for a mortgage loan to finance the purchase, their bank will also require that the mortgage be removed before formalizing the transaction. Therefore, it is essential to coordinate all the steps.
Preparations Before Signing:
Obtaining a Bank Certificate
Since the debt will be paid with the sale amount, it is necessary to request a certificate from the bank with the exact amount owed on the date of signing before a notary. This document must include:
- The loan number.
- The exact amount of the debt.
- The property registration number.
- The registry in which the mortgage is registered.
The bank cannot refuse to issue this certificate, which must be requested once the date has been confirmed with the notary.
Retention of the Amount by the Buyer
Generally, the bank holding the mortgage does not attend on the day of signing, so it is usual for the buyer to retain the amount of the debt from the purchase price, along with an additional amount to cover possible adjustments.
Once the transfer has been made before a notary:
- The buyer will give the bank the amount indicated in the certificate to settle the debt.
- The bank will issue a zero-balance certificate, confirming that the mortgage has been cancelled.
- This certificate will be incorporated into a mortgage cancellation deed.
- The Stamp Duty (generally exempt) will be paid.
- Finally, the cancellation will be registered in the Property Registry.
By following these steps, a safe and burden-free sale is guaranteed for both parties.
GIPE: Together we will be stronger
