Mortgage Advice… Double-Checking the Small Print
In recent years Spain’s banks have come under much closer scrutiny when it comes to mortgages and other client contract agreements, all of which has benefited property buyers – both Spaniards and foreign residents. The infamous “cláusula suelo” (“floor clause” or minimum mortgage interest rate), for example, has been declared illegal by the courts, and bank customers are starting to be reimbursed for over-payments.
Going forward, legislation is being drafted to further protect the rights of consumers, and “notarios” (“public notaries”) will have an even more significant role than they have had to date.
This week it was announced that the proposed reform of the “Mortgage Law” will oblige notaries to have two meetings with clients negotiating a mortgage with their bank. On the first occasion (a free consultation and not requiring the presence of a bank representative), to enable the notary to check that the bank has provided its client with all the necessary documentation (including clarifying the full costs and fees) and to verify that the client fully understands the contract conditions; and the second time, to formally sign the mortgage contract with the bank – as occurs now.
Under the new law, clients will also not be obliged to accept a “mortgage pack” including such additional products as insurance and credit cards, unless the bank offers a reduction in the interest rate in compensation.
So what exactly is a notary in Spain? According to their official website, Notariado.org, “Highly skilled, notaries are approachable and impartial professionals who are there to help you, advise you and guarantee that your contract or transaction complies with the strictest legality. Notaries guarantee legitimacy and security for both private individuals and for the state.
“There are almost 3,000 notaries in Spain distributed throughout the country so as to guarantee service availability, even in very small towns, which means you will have no difficulty in finding one close to your home in whom to place your trust. Notaries are organised into colleges, which support them in their functions and also oversee their actions.”
At a European level, the 22 countries with notarial systems are grouped in the Council of Notaries of the European Union (CNUE). They are responsible for ensuring legal security for citizens and businesses, and are contributing to the development of a Europe of Justice that is being created in parallel with Europe’s economic set up, ”to guarantee that the EU law is respected in member states”.
Spanish notaries have released a leaflet (in Spanish and English – and available on their website) that provides useful information and advice on the initial steps usually required before buying a property, and on the benefits of doing so before a notary and through a public document.
They note that, “The purchase of a home is the most important investment in the life of most European citizens. If you are thinking of acquiring a property, the notaries will be able to explain to you the steps you should take. Do not hesitate to consult us. Above all, don’t sign any documents without getting some good advice, especially before handing over money, even if it is only a token deposit.”
And also remember, they stress…
- The buyer has the right to choose any notary he or she wishes for the drafting and legitimising of the authentic notarial instrument.
- The notary will give impartial advice while he safeguards the interests of the weaker party at all times, and that is usually the buyer.
- Do not sign anything you don’t understand or about which you don’t have absolute certainty. Once the authentic notarial instrument is signed you cannot renege on it. In case you have any doubts do not hesitate to consult the notary.
Luxury Living
Showcasing both Spanish galleries and international exhibitors, the third edition of Art Marbella begins today (28 July) and continues until next Wednesday, at the Palacio de Congresos y Exposiciones in the town centre. Not far from the Palacio is our featured home this week: an off-plan townhouse due to be completed in June 2018 and priced at an excellent €950,000.
Outstanding Homes
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