GIPE Newsletter 12 March 2024

MORTGAGES:

Mortgage expenses and their claim

On January 24, 2019, a ruling was issued in Spain that established the doctrine on the distribution of mortgage expenses between banks and consumers.

From then on, it was known what could be claimed and the deadline to do so: five years (ten in Catalonia). However, the doubt arose about when said period should begin to count: from the specific annulment of the clause or from the establishment of the doctrine? To resolve this, the Court of Justice of the European Union was consulted.

The European courts have determined that the period should not begin from the establishment of the doctrine, since consumers do not necessarily know the applicable jurisprudence in this matter. Therefore, they establish that the limitation period must begin when the consumer knows that the clause in his contract is abusive. This will occur at the time a court resolution is issued declaring the nullity of the expense clause of your particular mortgage.

If you have already submitted an extrajudicial claim to your bank (or decide to do so now) requesting the nullity of the clause that establishes the distribution of expenses in your mortgage and the restitution of amounts paid improperly, please take into account the following:

• The calculation of the five or ten year period begins again. If the bank does not respond to your request, you still have that period to continue claiming, even through a lawsuit.
• Since you make the extrajudicial claim, it is understood that you know that the clause is abusive. Therefore, there is no discussion about the beginning of the calculation of the period, since this will be the day on which you formulated your claim.

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LEASES:

Reimbursement of rent in a rental contract

In the case of a tenant who resigned from the rental contract, demanding reimbursement of a part of the last rent, the Court has rejected her request. Although the tenant vacated the apartment before the end of the month, he/she must pay the full monthly payment. The reason is that the rent payment is accrued in advance at the beginning of each month.

Furthermore, it was not found that they had reached any agreement to discount that period. It is important to remember that, according to the Urban Leasing Law (LAU) and unless otherwise agreed, rent payment is monthly and must be made in the first seven days of the month.

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Endorse a contract and extensions

When a third party guarantees a rental contract, it is important to determine the scope of his/her responsibility and define what he/she guarantees. Specifically, the concept and deadline must be considered.

According to the law, the extension granted to the debtor without the consent of the guarantor extinguishes the bond. Most courts understand that the bond is limited to the duration of the original contract, excluding voluntary extensions. However, mandatory extensions are not excluded (up to five years if the landlord is a natural person or seven if it is a legal entity). Furthermore, it is established that the guarantee must be express.

Here are the scenarios:

• If the contract does not specify anything: The deposit extends to mandatory legal extensions. For example, if the contract has a duration of two years, the deposit will cover five or seven years, depending on the lessor. However, it does not extend to voluntary extensions or tacit renewal, which the guarantor must expressly sign.
• If the contract specifies the extension of the bond to all voluntary extensions and tacit renewal: The guarantor is also obligated during these extensions.

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TAXES:

Tax reduction on rentals in stressed areas

Starting in 2024, if you own a home located in a stressed residential market area and formalize a rental (for use as a home), you can enjoy important advantages on your personal income tax. Several autonomous communities have already published the localities that meet the requirements to be a stressed zone, although the Ministry of Transport, Mobility and Urban Agenda must issue a resolution with the final list.

Specifically, the rents of homes located in these areas can enjoy a reduction of more than 50%, generally applicable to home rentals:

• The reduction is 90% if in the new rental contract the initial rent is reduced by more than 5% in relation to the last rent of the previous contract.
• The reduction is 70% if the rent reduction requirement is not met, but it is rented to certain people or entities.

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Exemption for reinvestment in rentals

When you sell your primary home, the profit obtained may be exempt from personal income tax if it is reinvested in the acquisition of a new primary home. However, to consolidate this incentive, it is mandatory that the new property acquired be your habitual residence for three consecutive years.

This means that you cannot rent it, even occasionally (for example, one month each year during the holidays). If you do so, you will lose the exemption and must submit a complementary self-assessment for the period in which you obtained the profit, including the corresponding late payment interest.