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

High Court Repeals Andalucían Anti-Eviction Law

27 May 2015 – Expansión

The temporary expropriation by banks of homes in the process of eviction is unconstitutional. That was the ruling issued by the High Court (HC) following its in-depth analysis of the controversial decree law governing the Social Function of Housing, approved by the Government of Andalucía in June 2013, which was challenged by the Central Government.

Until the HC suspended this law, as a precautionary measure, 121 expropriation demands were filed, over a three-year period. The law was later reissued, although without any significant changes

According to the ruling, articles 1.3 and 53.1 of the regional law have been annulled. Previously, those articles imposed on the owner of houses “the duty to effectively use property for the residential purposes provided for by the law”, since the essential content of the rights of ownership pervade; an area “prohibited” for the decree law of the autonomous community. This law does not affect individuals.

For the same reason, the ruling issued by the HC declares the imposition of fines on financial entities that own uninhabited homes to be unconstitutional. To date, the Andalucían Government has imposed fines on various banks – including Popular for €5.8 million and BBVA for €1.6 million – for not putting empty subsidised (VPO) homes at the disposal of the municipal registries for claimants.

Encroachment of competencies

Alongside this ruling, the HC considers that the regional legislation deals with the state duties provided for by the Constitution, such as “coordinating the planning of economic activity”, whereby nullifying the second additional provision of the decree law “aimed at ensuring the right to adequate housing”.

The ruling also explains that “it constitutes a significant obstacle for the effectiveness of the measures taken by the central Government”, which issued legislation that provided for the possibility of suspending the introduction and promoting the creation of a social fund containing the properties owned by the entities to facilitate their lease to evicted persons.

In this sense, it is worth noting the agreement of disparate legal figures regarding the same reality – the suspension of the introduction of state legislation and the expropriation of the use under the regional legislation – “makes the joint application difficult”.

The HC also advises all of the regions that the State should determine “the extent of the public intervention” and indicate “certain guidelines in the mortgage market”, and should do so in such a way that “it is compatible with the proper functioning of that sector”.

As a result, this “prevents” the regions from “adopting provisions that affect this market in a more intense way”.

Original story: Expansión (by Lidia Velasco)

Translation: Carmel Drake

New European Setback For Spanish Mortgage Law

14 May 2015 – Cinco Días

The European court considers that the legal period granted to challenge evictions (under Spanish legislation) was illegal.

The ruling is just one of half a dozen negative sentences from the EU regarding mortgages.

The European Justice system has again called into question Spain’s legislation regarding mortgages. A ruling published yesterday by Maciej Spunzar, the attorney general of the European Union’s Court of Justice, considers that (the legislation) “is not reasonable” and that the period and way in which the mortgage reform permitted those affected by evictions to oppose foreclosure on the basis of the application of abusive clauses, contravenes EU regulations.

That possibility, to paralyse eviction proceedings arguing that they are based on an illegal clause, did not exist in Spain and was one of the pillars of the mortgage reform that the Government supported in 2013 when adapting Spanish legislation to EU law.

That is what the European Court demanded in a key ruling, which preceded another preliminary sentence similar to the one published yesterday. These are the basis of the final judgements that, in 80% of cases, the institution issues with the same findings a few months later.

That mortgage reform, which came into effect on 15 May 2013, established that any new people affected by an eviction would have a period of 10 days to oppose it from the date of notification.

However, for mortgage foreclosure processes already underway, the regulation established a transitory provision, which obliged all interested parties to oppose the measure within a period of one month following the publication of the law in the Official State Gazette (BOE), i.e. no later than 15 June 2013.

According to the letter issued by the Court of Justice yesterday, the problem is that the EU directive on abusive clauses “precludes any national provision, like this one in Spain”.

Although it considers the period of one month to be sufficient, “what causes problems is precisely the fact that the period started from the day after the publication of Law 1/2013 in the BOE, when the parties involved in the foreclosure processes had not been notified”, detailed the document.

The European ruling responds to a question raised by the Judge of First Instance nº4 in Martorell, involving two people subject to a mortgage foreclosure by BBVA, who logged their opposition to the eviction on 17 June 2013, i.e. two days after the period expired. The affected parties complain that the aforementioned limit violated their EU rights.

The fact that they were given one month without being notified directly “made it impossible or too difficult to exercise the rights granted to consumers” and generated “a high degree of legal uncertainty, unadmissible in the field of consumer protection”, argued the attorney general of the European Court.

“The period was not sufficient to (allow affected parties to) prepare and lodge an effective appeal”, insists the general attorney, underlining the importance of procedures in which consumers risk losing their properties in an irreversible way.

A definitive decision in this sense would have consequences for the “hundreds of thousands (of people)” affected by the foreclosure procedures resulting from the approval of the mortgage reform. The Court considers that they should have been notified about the period, as well as about the options that they had to oppose (the decision).

Original story: Cinco Días (by J.P.C.)

Translation: Carmel Drake