Barcelona Fines Two Funds €2.8M for Leaving 24 Flats Empty

4 March 2019 – Eje Prime

The mayor of Barcelona, Ada Colau, has fined two investment funds €2.8 million for leaving two properties empty for more than six years on Calle de Aragó and Calle Pau Claris, in the Eixample district. The fine has been issued under the Right to Housing Act from 2007, which establishes penalties for the poor use of homes that have a social function and which ought to be inhabited.

If a property remains vacant for more than two years, its owner may be fined by between €90,000 and €900,000 per home. In total, the buildings subject to these fines comprise 24 homes.

Colau defended her housing policy and pointed out that the fines form part of a comprehensive approach by her government that includes the construction of 70 new developments, the requirement for private developers to build 30% social housing and conditioning any help for renovations on maintaining rental prices.

The fines could be reduced if the owners agree to let the Town Hall include the flats in their social housing stock.

Original story: Eje Prime

Summary/Translation: Carmel Drake

Santander Matches the Reuben Brothers’ Bid to Acquire the Ciudad Financiera

13 February 2019 – Voz Pópuli

Santander has matched the bid presented by the Reuben brothers for the Ciudad Financiera, in a new attempt to neutralise the offensive by the British investors to acquire its headquarters in Boadilla del Monte (Madrid).

On Tuesday, the bank chaired by Ana Botín presented a preferential acquisition right against the bankruptcy of Marme – the previous owner of the Ciudad Financiera –in the commercial court of Madrid, having set aside €20 million to be able to carry out the acquisition, according to sources familiar with the process. The operation is valued at around €3 billion.

Spain’s largest bank considers that it has the option of resorting to a preferential acquisition right, established in the lease contract for the Ciudad Financiera, signed on 30 December 2008 between Marme and Santander Global Facilities.

Bankruptcy process

Nevertheless, during the bankruptcy process that has resulted in the sale of the Ciudad Financiera, the administration appointed by the judge warned that the aforementioned right could not be exercised in order to “not obstruct the liquidation of the assets any further”.

Judge María Teresa Vázquez Pizarro, from Commercial Court number 9 in Madrid, said that the purpose pursued with the transfer of the Ciudad Financiera determines “that the lessee’s right of preferential acquisition cannot be accepted, given that the interest in the continuity of the business activity prevails over any rights recognised to third parties”.

The deadline for Santander to exercise its preferential acquisition right expires in the middle of this month (…).

Last November, the bankruptcy administration announced that the Reuben brothers had submitted the highest bid for the Ciudad Financiera, exceeding even the offer presented by Santander, a decision ratified this year by the court.

Santander warned that the offer from the British investors – one of the top 100 wealthiest families in the world – should not be accepted, highlighting the corporate network that they had set up for the operation, which includes several companies registered in tax havens.

Moreover, the Spanish bank has agreed the purchase with the main creditor banks of Marme – Caixabank, ING, Natwest Markets (previously The Royal Bank of Scotland), Bayerische Landesbank, and HSH Nordbank- of their debt. Through that, it has managed to obtain the support of those entities for its intentions and they have sent letters to the mercantile court defending the purchase of the Ciudad Financiera by Santander.

The breach of the preferential acquisition right by Marme carries a fine of €500 million, and the retraction of the sale to a third party, according to the terms of the contract signed by Marme and Santander, say the sources consulted.

The same sources indicate that this fine could be supplemented by another penalty amounting to €750 million if the suitability test is not fulfilled; in total, a fine amounting to €1.25 billion that Santander hopes will serve to ensure that the Reuben brothers reconsider their strategy

Original story: Voz Pópuli (by Alberto Ortín)

Translation: Carmel Drake

Ana Botella & 7 of Her Officials Sentenced to Pay €22.7M for the Sale of Flats to Vulture Funds

28 December 2018 – Voz Pópuli

The Court of Auditors has sentenced the former mayor of Madrid, Ana Botella (pictured below) and six high-ranking officials of her municipal Government to pay €22.5 million for the sale of 1,860 publicly owned flats to two companies owned by Blackstone, considered to be a vulture fund, for a price below that stipulated by the market in 2013. Another senior official, Fermín Osle, has been sentenced to pay more than €3 million for his role as the “accountant directly responsible” for the operation.

The ruling, revealed by Cadena Ser, concludes that the eight people now condemned “engaged in serious negligence” by not preventing “damage to public property” by selling the homes for €128.5 million when, according to the calculations of the Court of Auditors, Botella’s Executive could have received proceeds of more than €151 million.

The sentence is based on a claim filed a year ago by the current Government of the Spanish capital, led by Manuela Carmena, through the Municipal Housing and Land Company (EMVS). The ruling determines that the operations carried out by the Municipal Housing Company that reported into the Government “led to an unjustified impairment of public property”, which they estimate amounted to €23 million.

The other condemned officials are Enrique Núñez Guijarro, Diego Sanjuanbenito, Paz González García, Dolores Navarro, Pedro Corral and Concepción Dancausa, former delegate of the Government of Madrid.

They will appeal the sentence

The former mayor and her then municipal government team are going to appeal the sentence, according to sources, after hearing the content of the ruling, since “they do not agree with it”. They also noted that the Prosecutor of the court has already requested the dismissal of this claim “for not having any accounting responsibility”.

In the same way, they have indicated that the previous Governing Board of the Town Hall of Madrid “did not intervene directly or indirectly in the operation to sell the homes” to which the decision by the Court of Auditors refers. “Only, and in its capacity as the General Shareholders’ Meeting of the aforementioned company, did they ratify the feasibility plan that the EMVS’s Board of Directors had already approved”, they highlighted.

Original story: Voz Pópuli (by Carlos Frías)

Translation: Carmel Drake

Fotocasa: The Price of Parking Spaces Soars by 12% in Carmena’s Madrid Central

9 December 2018 – Voz Pópuli

It’s been a week since Madrid implemented the so-called ‘Madrid Central’ project, which restricts the access of the most polluting vehicles into the centre of the city. But some parties have been doing business for several months thanks to the regulatory changes approved by the mayor Manuela Carmena’s team in this regard.

The sales price of parking spaces has soared by 12%, according to data provided by the portal Fotocasa. The price of acquiring a spot in which to park a private vehicle increased from €26,960 to €30,152, on average, between September and October, in other words, a month before the introduction of the measure.

Although rental prices, by contrast, stayed the same at €177/month, so far this year, the district where Madrid Central is located is where prices have risen almost by the most, 9.7%, behind only San Blas, where they increased by 10.8%.

Madrid Central is looking “to ensure that our health is protected against the effects of air pollution, which in Madrid exceeds the protection levels established by European legislation. It will also contribute to the reduction of noise and to the fight against climate change, by reducing the emission of greenhouse gases”, explain sources at the Town Hall of Madrid.

Parking in the centre of Madrid

Parking in the centre of Madrid will be a real headache from now on. The most polluting cars, those that display B and C labels from the DGT, will be able to circulate in the centre to park in the various parking lots, but they may be fined if they cross into the Madrid Central perimeter without entering an underground parking lot, and even more so, if they decide to park in a SER zone (blue or green). In the event that there is no space in any of the parking lots, vehicles cannot be fined and the Town Hall will report that fact.

How can drivers know if there are any spaces available in the city centre’s parking lots? The Town Hall plans to install electronic screens at the 17 access points to Madrid Central, which will inform users about the availability of parking in real time. Nevertheless, those screens are not going to be installed until May next year, as they are currently at the tender contract phase.

The problem arises because the Town Hall has already announced that it will start to fine any drivers of private vehicles who break the new regulations from February onwards, three months before users will have information on the screens.

Original story: Voz Pópuli (by Carlos Frías)

Translation: Carmel Drake

Salazar Family Sells Gran Hotel Velázquez To Didra Group For €58M

1 June 2017 – Idealista

The Salazar family, the former owner of SOS Cuétara, has just divested the last jewel in its hotel crown in Madrid: it has sold the Gran Hotel Velázquez for €58 million.

The establishment has 142 rooms, is located on the capital’s Golden Mile and its new owner is the Didra Group, famous for constructing residential developments in luxury urbanisations in Madrid. Didra plans to close the hotel in July for 18 months to undertake a comprehensive refurbishment.

The Salazar family, through Corporación Hispana Hotelera, owned four hotels in the capital in its heyday. However, it started to sell off its properties three years ago to finance the fine imposed on it by the courts for the embezzlements at SOS Cuétara, which went on for 10 years.

In this way, the family sold the Ada Palace, an establishment located on Madrid’s Gran Vía, close to Puerta del Sol, to an Asian investment group, for €35 million. In addition, it sold the María Elena Palace Hotel, which is also located in the heart of the capital.

The latest hotel to have been sold has been the Gran Hotel Velázquez. Last year, the Salazar family was about to close the deal with the Didra Group, but it was then thwarted because of the buyer’s lack of liquidity and because the courts suspended the operation. Nevertheless, the family has now received the green light to close the sale and so has just one hotel establishment left in its portfolio: the Hotel Osuna, located on the outskirts of the capital, near the airport.

This agreement is expected to be made public within the next few days.

Original story: Idealista

Translation: Carmel Drake

Record Fines For Airbnb & HomeAway in Barcelona

25 November 2016 – Expansión

Airbnb and HomeAway are going to be fined €600,000 each by the Town Hall of Barcelona. The Town Hall, led by Ada Colau (pictured above), will fine both tourist accommodation platforms for continuing to advertise unlicensed apartments.

The mayoress of the city announced the decision yesterday, explaining that the fines will be imposed because both companies have ignored the Town Hall’s request to stop advertising illegal tourist apartments and provide data about the properties.

The first fine amounted to €30,000 for each technological company, but given that both portals continued their activity, the classification of the infringement has now been upgraded from serious to very serious, and the fine has increased to €600,000 for each firm, the maximum permitted under the Tourism Law.

The files have already been signed and the firms will be notified about the fines shortly. The amount of the sanction will reflect: the number of adverts published – 3,812 in the case of Airbnb and 1,744 in the case of HomeAway, according to the Town Hall –; the economic benefit they obtain; their dominant position in the market; and the recurrence of the infringement.

A fine of €30,000 has been maintained for other portals, including: Fotocasa, Open House, TripAdvisor, OnlyApartments, 9flats, Niumba and Rent4days.

Airbnb’s response

The US platform Airbnb, led in Spain by Arnaldo Muñoz in Barcelona, announced its decision to appeal the fine.

“This is a sad decision and Airbnb is going to appeal; less than a month ago a meeting was held between representatives of the Town Hall and Airbnb, where it was agreed that we would work together to support the city’s interests”, said the portal in a statement. Sources at the platform consider that “Airbnb is part of the solution in Barcelona, we want to be a strong ally in the cities in which we operate and we will continue to seek open dialogue with the Town Hall”.

According to Airbnb, there are contradictions in Barcelona’s tourist policies, which favour commercial operators and apartments dedicated solely to tourism in tourist areas, to the detriment of people who want to open up their own homes.

“We have to differentiate between professionals who operate lots of tourist apartments and individuals who rent out their homes from time to time”, say sources at Airbnb. The portal regrets that “Barcelona is resisting what is happening in most other cities in the world”. The portal has reached agreements with more than 200 cities and regions.

Original story: Expansión (by Tina Díaz)

Translation: Carmel Drake

Colau Fines BBVA, Sareb & Santander €1.2M For Empty Flats

22 November 2016 – Expansión

The government team of the Town Hall of Barcelona, led by Ada Colau (pictured above), announced yesterday that it has fined Santander, BBVA and Sareb for letting four homes stand empty for two years or more. Each fine amounts to €315,000. The Town Hall also announced that it will reform the regulations (governing the sector), with the aim of simplifying the administrative procedures. Until now, each case has been completed in several phases, with a series of fines being imposed (amounting to €5,000, €10,000 and €15,000, respectively) before the final sanction.

The fines only affect legal entities and not small home owners. From now on, the two intermediate phases of the process will be eliminated, which means that the preliminary fine of €5,000 will still apply and then the final sanction will be imposed.

According to the council member for housing, Josep Maria Montaner, these changes should allow cases to be processed within five months, rather than within a year and a half, as is currently the case.

The sanctions imposed yesterday relate to cases opened in September 2015, three months after Colau was elected as the mayoress of the city. Twelve cases were opened at that time, and given that four of them are still in the same situation, the maximum fine has been imposed.

The fines announced yesterday affect two flats owned by Sareb, one owned by Santander and another one owned by BBVA. In the case of the latter, the entity chaired by Francisco González said that the property was made available for the Generalitat’s social rental housing stock last July, along with 1,800 other properties.

207 cases

Montaner also took stock of the cases that have been processed so far. In total, 207 cases are currently open, of which 13 have been fined the first amount (€5,000); eight the second amount (€10,000); and two the third amount (€15,000). The council member stressed that the purpose is not “to raise funds”, but rather to ensure that empty homes are made available for the social rental housing stock, which is being managed by the Catalan capital’s Town Hall.

Original story: Expansión (by D. Casals)

Translation: Carmel Drake

Barcelona’s Town Hall Closes 615 Illegal Tourist Flats

22 September 2016 – Inmodiario

The first two months of the shock action plan carried out by the Town Hall of Barcelona to fight against the problem of illegal apartments continues to bear fruit, with the cessation of activity at 615 illegal apartments and the opening of 1,290 new files as a result of the inspector’s work.

The objective is to minimise the black market supply of tourist accommodation, which is particularly high in some of the more central districts of the city. The aim is also to restrict such properties from taking up roots in the city, given that they are economically unsustainable and disrespectful of the governing legislation; moreover, critics argue that they lead to the eviction of neighbours from the most affected neighbourhoods.

One of the new features of the plan is the team of twenty people that is responsible for checking in situ whether illegal activity is being undertaken in specific tourist flats. The team also interviews tourists and neighbours with the aim of obtaining the addresses of possible tourist flats operating without a licence. In the last two months, 1,222 online searches have been performed for tourist flats without a licence number, and as a result 1,045 street visits have been undertaken, which have allowed the team to identify 766 illegal homes.

The Town Hall has already issued cessation orders and sanction files (€30,000) to 418 of those apartments operating without a licence, and in terms of the others, the corresponding administrative checks are being performed to be able to open the files.

Meanwhile, the new municipal website, which visitors can use to find out whether a tourist home is legal or not, has received 825 reports.

In the field of inspection, the Town Hall works not only to detect the illegal supply of homes being let out without any kind of licence, but also works with other types of unusual tourist accommodation published online.

In this sense, 32 establishments have been identified to be operating as B&Bs without the corresponding licence. Soon, all of these places will receive the corresponding disciplinary procedures – in the form of an order to cease activity and a sanction file.

Original story: Inmodiario

Translation: Carmel Drake

Colau Closes 256 Tourist Apartments In 1 Month

11 August 2016 – Expansión

One month ago, the mayoress of Barcelona, Ada Colau, announced the launch of an emergency plan against unlicensed tourist apartments in operation in the city. Since then, the Town Hall has ordered the closure of 256 flats in total; in 2015, 400 orders were issued during the whole of the year. Nevertheless, for the trade association Apartur, which represents legal suppliers (of tourist accommodation), that figure is insufficient, and so it has called for the municipal government to make more effort.

A month ago, the town hall reinforced the number of agents making on-site inspections or verifying offers advertised on the internet. The sanctioned owners will receive a court order requiring them to cease their activity and they must pay a fine of €30,000. If they reoffend, the amount of the fine will increase.

One of the initiatives that Colau had announced a year ago was that unlicensed homes that joined the program for homes to be used as social housing would not be sanctioned, but for the time being, no property has joined that plan.

The town hall has also continued to process the files that it opened against the platforms Airbnb and Homeaway one year ago for reporting unlicensed flats.

Over the next few weeks, both operators will receive notifications and must pay a fine of €60,000 each. If they reoffend, the sanctions may reach €600,000.

The trade association Apartur celebrated the municipal initiative, but stressed that it is still a long way from eradicating the illegal offer that exists in the city. It also questioned the moratorium underway, which is affecting both the opening of hotels and the granting of new licences for tourist apartments, given that it is making the eradication of this activity more difficult. Its commitment, it said, is to a “responsible”, “sustainable” and civic tourist model.

Web site and letters

The municipal government defended itself against the critics and said that proof that it is giving priority to this issue is the creation of a website that allows neighbours to report illegal tourist apartments. During the course of one month, it has received 375 notifications. It has also started to send 800,000 letters this week, in which it calls on citizens to “collaborate”.

Nevertheless, the discomfort of several neighbourhood organisations against illegal tourist apartments is continuing to grow, and this summer it has extended further beyond the centre to reach neighbourhoods such as Poblenou.

Original story: Expansión (by David Casals)

Translation: Carmel Drake

Podemos Positions Itself Against Socimis & The RE Recovery

26 April 2016 – Negocios.com

The political party led by Pablo Iglesias (pictured above) wants to put a stop to these investment companies, which are responsible for investing billions of euros each year.

Podemos has proposed an attack on the Socimis (listed real estate investment companies), whose appearance has helped the recovery of the real estate sector in recent times. Pablo Iglesias has put the tax structures of Socimis, private equity firms and entities holding foreign securities (ETVE) in the firing line; he says that he wants to “ensure productive investment and tax equity”. And it is true that the tax treatment of Socimis is different to the rules that apply to other companies, but the Socimis also have to comply with certain requirements, such as holding share capital of €5 million, and not €3,000 like an SL, and listing on the stock exchange, such as the MAB, IBEX 35 or Main Market.

– Tax rate of 0%. Socimis are taxed at a rate of 0% for Corporation Tax purposes.

– Special rules need to be taken into account for entities that have been taxed under a general regime that start paying tax under the Socimi regime: if ownership of a property is transferred prior to the application of the Socimi regime, then the rental income shall be understood to be generated on a linear basis (unless proven otherwise) during the holding period, and so the previous tax regime and the Socimi regime will be applied to the rental income on a proportional basis.

In addition, Podemos also wants to axe Sicavs, control the shareholders and the money in cash, limit the maximum percentages per shareholder and have them monitored by the Tax Authorities and not by the CNMV like now.

Encourage “informers” and allow tax inspectors to work under cover in order to combat tax fraud. The informer would be rewarded with some of the economic fine imposed on the offender, whilst a fund would be created for paying tax confidants.

This is part of the Comprehensive Plan to Combat Fraud that will be presented to the Economic Committee on Wednesday. According to the text, tax revenues would increase by between 1% and 1.5%.

Moreover, Podemos considers that it would be worthwhile to integrate all of the networks of the Tax Authorities and the regional and state Social Security departments for greater coordination.

Meanwhile, Podemos’s proposals also include lowering the criminal liability threshold for tax offences to €50,000, as well as increasing, in general, the “prescription period” to ten years, applying the penalties currently provided for when the defrauded amount exceeds €120,000.

Original story: Negocios.com

Translation: Carmel Drake