Tag: law

Tourist Rental Homes Generate Almost €14,000M In 2 Years

10 July 2017 – Expansión

HomeAway, one of the main tourist rental home companies, estimates that the economic impact generated by this activity in Spain during the period from June 2015 until June 2017 amounted to almost €14,000 million. That amount exceeded the impact generated during the previous two-year period by €2,824 million, when it amounted to €11,120 million, according to the IV Holiday Rental Barometer in Spain, compiled by HomeAway.

The use of tourist homes has increased by 25% in the last two years, given that they were used for more than 22 million visits.

On Thursday, the professor of Marketing at the University of Salamanca and author of the study, Pablo Muñoz, highlighted the consolidation in the sector amongst clients, given that 32.6% of those surveyed use both hotels and tourist apartments, depending on their requirements. 61% of the people surveyed only ever stay in hotels.

The report reveals that the users who stay in these types of homes spend more during their stay (€477) than guests who sleep in hotels (€331). The Director General of HomeAway in Spain, Juan Carlos Fernández, underlined that this economic impact is reflected, in particular, in those businesses located close to tourist homes.

On the other hand, HomeAway confirmed that its legal team is analysing a draft bill that is being promoted by the Ministry of Finance to analyse “the extent to which a national Administration has the power to request data about users” and to establish its position before communicating it to the Tax Authority.

Collaboration

The Communications Director at HomeAway, Joseba Cortázar, said that “HomeAway is open to collaborating with the Tax Authority to provide greater transparency in terms of tax collections”. And he reiterated that the veto of neighbouring communities is a possibility that is already reflected in the Horizontal Property Law: “This activity cannot be carried out if the community bylaws prohibit it”.

Original story: Expansión (by Miriam Vázquez)

Translation: Carmel Drake

Gov’t Extends Eviction Moratorium Until 2020

21 March 2017 – Rtve

On Friday, the Government approved the extension of the anti-eviction moratorium for vulnerable families from their normal homes until 2020 – the initiative had been in force since 2013 and was due to expire in May of this year. From now on, the measure will include families with dependent children aged under 18. That is according the Ministry of the Economy, Industry and Competitivity, Luis de Guindos (pictured above), following the Council of Ministers meeting. He said that the aforementioned law “would be expanded and deepened” in order to protect the most vulnerable groups following the crisis.

De Guindos said that the Royal Decree Law will now cover other (new) cases so that more families can benefit from these measures. It will include vulnerable families with dependent children aged under 18 (not only those aged under 3 years old, like until now); single-parent families with dependent children (removing the need for there to be two children in single-parent families); unemployed people (without having used up the benefit); disabled people; dependent people; those with a serious illness; and cases where there is a victim of gender violence in the family unit.

The Minister for the Economy also explained that the Code of Good Practice – which financial institutions can voluntarily sign up to – includes the option of renting foreclosed normal homes at a discounted price. (…).

Agreement with the opposition parties

The text in the Royal Decree Law has been prepared with a “broad consensus” according to the Minister in a statement. De Guindos said at a press conference that all of the main parliamentary groups have been involved in the negotiations, and so he has ensured that there is a “very strong consensus to approve it”.

In fact, the Government had initially announced the extension of the moratorium on evictions of vulnerable families from their usual homes until 15 May 2019, although it was in favour of extending it for another year, as reflected in a non-legislative motion, approved by the Congress of Deputies, and that is what it has done in the end.

Socialist sources cited by Europa Press have indicated that the PSOE and the Government have agreed this decree and have also reached an agreement to submit a plan, within eight months, containing measures directed at facilitating the recovery of home ownership from people in situations of economic vulnerability that are immersed in eviction processes, unable to pay their mortgages. (…)

In any case, De Guindos confirmed that “the most important things are not the palliative measures. Instead, in order to put an end to the drama of evictions, the economic recovery needs to continue”. In his opinion, the main reasons for the 30% decrease in the number of evictions in the last year have been economic growth and the creation of employment.

Original story: Rtve

Translation: Carmel Drake

Constitutional Court Suspends Tax On Empty Homes

4 May 2016 – Expansión

The Constitutional Court (TC) has suspended three laws approved by the Catalan Parliament, after they were appealed by the Government at the end of April. The laws in question are: the law that taxes empty homes, the local government law and the law for equality between men and women. The appeals have been accepted for processing, which means that the laws themselves have been temporarily suspended. Nevertheless, the acceptance for processing and the temporary suspension do not represent a ruling of any kind regarding the outcome of the appeal.

According to the acting Justice Minister, Rafael Catalá, who spoke at a press conference following the Council of Ministers meeting held on 22 April, the Government is challenging the law that establishes a tax on empty homes because that taxable event is already taxed under the current system for financing local governments, which provides for surcharges of up to 50% under IBI. (…)

The appeal against this Catalan law is surprising if we consider the fact that the Stability Program, which the Government has just submitted to Brussels, praises this law as one of the measures that the regional Governments are using to try to guarantee revenues “such as the tax on empty homes and the tax on tourist accommodation”, it says.

Original story: Expansión

Translation: Carmel Drake

Moody’s: Cataluña’s Anti-Eviction Law Will Deter Investment

2 February 2016 – Expansión

The ratings agency Moody’s considers that the Law for urgent measures against evictions and energy poverty carries a serious risk of affecting real estate investment and the mortgage market in both the autonomous region, as well as across Spain. In its report, to which Expansión has had access, the entity says that the legislation, approved by the Catalan Parliament in July 2015, “has a negative impact” on the mortgage funds in the Spanish residential market.

According to the ratings agency, the Catalan law, processed through a Popular Legislative Initiative (ILP), promoted by the Platform for those Affected by Mortgages (PAH), contains an additional provision that may seriously harm transactions involving mortgage portfolios. Specifically, the law establishes that if, for example, a bank sells a mortgage to a third party, then the debtor may be freed from the loan originally contracted and will only have to repay the third party the amount that said third party has paid to acquire the debt.

Many investment funds have entered the Spanish market (in recent years) to buy mortgage portfolios from the banks at significant discounts. They typically buy risky mortgages, overdue mortgages, and those that are at risk of default, but the investors entering into these operations focus on the yield that they may be able to obtain for the difference between the loan value originally contracted and the price that they have effectively paid to acquire the debt. But that difference may now disappear. “The new law is likely to discourage potential buyers from acquiring delinquent mortgage loans”, say Moody’s in their report. The reason is that “the law potentially deprives the buyer from receiving any kind of profit from these types of transactions”.

The ratings agency says that if an operation is completed at a price below the contracted price, then this “situation may result in part of the mortgage effectively being subject to a discount”.

Moreover, the agency says that a similar measure already exists in the Spanish Civil Code, although there are “significant differences”. According to the state law, the debtor may only exercise this right if he/she pursues it through a judicial dispute and he/she may only exercise this right during the first nine days immediately following the operation. In the Catalan case, although it applies only to primary residences, no legal action is required and no term is established for settling the debt.

The Housing Minister for the Generalitat in Cataluña, Carles Sala, said to this newspaper that he understands the position of the ratings agency, but he highlights that the solution chosen by the Catalan Parliament is based on the fact “that a problem exists that must be addressed”.

When the law was approved, the Government announced that it expected to submit the bill to the Constitutional Court, although that has not happened yet and the law “is now being deployed”, say sources at the Generalitat. The law was passed unanimously, including by the PP.

Nevertheless, its backers consider that the regional Government, led by Carles Puigdemont, is not making enough effort to implement it. The group, which presented the ILP on the housing crisis, has recently demanded another meeting with the new regional president to force the application of the legislative initiative.

In a letter sent to Puigdemont, the backers of the bill, namely, the Platform for those Affected by Mortgages (PAH), the Alliance against Energy Poverty and the DESC Observatory, claim that the right to housing is still being violated and energy poverty is still growing.

After the “historical milestone”, namely, the unanimous approval of the housing ILP in July, the backers say that Puigdemont now seems “vague” and “confused” about the “importance of the legislation”; they demand that he progresses with its implementation.

Original story: Expansión (by Bernat García)

Translation: Carmel Drake

Fortress Dismisses Most Of The Lico Staff After The Failed Sale To Apollo

4 September 2015 – El Confidencial

Fortress dismisses most of the Lico staff after the failed sale to Apollo.

The American fund has announced the third record of employment regulation in the financial holding company which it bought from the savings banks to compete in granting credits.

Fortress admits defeat in Spain in its attempt to compete with banks in lending to small and medium enterprises. US fund, which requested a license from the Bank of Spain to operate as a credit institution, following the purchase of the financial holding company from the savings banks, announced this Thursday its plans to dismiss most of the staff in the face of inability to make Lico Leasing Division profitable.

Several sources have confirmed the announcement made by Fortress to about 130 employees  still working in this subsidiary, which was part of Lico Corporation, the financial group controlled by the Spanish Confederation of Savings Banks (CECA) until its demise due to bankruptcy and absorption of these entities left this company in the hands of banks.

Opportunistic fund bought the holding in 2013 for about 220 million euros, keeping all business and staff, in order to take advantage of economic recovery and the new demand for credit. But the investment has not gone as expected, that is why Fortress commissioned N + 1 to search for a buyer among others of the distressed funds who also had landed in Spain looking for bargains.

Opportunistic fund bought the holding in 2013 for about 220 million with the objective of taking advantage of economic recovery and of the new demand for credit.

In July, Fortress and Apollo reached a preliminary agreement for the transfer of the business. But at the time of the final signing, the entity that manages the NPLs of Banco Santander, Bankia’s Finanmadrid and part of the office network Abanca (renamed to Evo Bank), backed down. Apollo’s refusal has led to the start of the extinguishment of employment procedure, which will now begin negotiating with the workers.

Other sources indicate that this decision means the prelude to the liquidation of this subsidiary, an extreme step denied by those close to the fund. At the same time they assure that Fortress will continue in Spain with its business recovery of Geslico, which already applied for another record of employment regulation earlier this year, real estate and alternative investments.

The recent history of Lico Leasing demonstrates how these opportunistic funds work. Fortress bought it in 2013 for about 220 million euros after its shareholders – BBVA, La Caixa, Bankia, Unicaja, Sabadell, BMN and Kutxabank, among others – put it on sale after inheriting it from CECA (Confederation of Spanish Savings Banks). Soon, the fund presented a record of employment regulation (ERE) for 174 of the 450 employees of Lico Corporation.

Subsequently, it sold the credit portfolio to Goldman Sachs, which it had bought for a knockdown price, and handed over the local landmark office in Barcelona, located in the Windsor building on Avenida Diagonal, to Miguel Durán, the former president of the ONCE .

 

Original story: El Confidencial

Translation: Lee La