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Legal report concerning the draft of the Housing Law in the Autonomous Region of the Balearic Islands

28Feb

Derecho Inmobiliario y cuestiones Fiscales

Here in Bufete Frau we are concerned that our clients and collaborators are always up to date on the latest most important legislatives concerning real estate matters and, therefore, we give priority in informing you of a summary of the draft of the new Housing Law in the Balearic Islands that, although not yet published nor in force, we believe will soon be so. It is time to do our homework and at least know how this will affect us on a daily basis.

Due to the important changes in our actions arising from this law, it is necessary as from today to start to study same and, therefore, analyse how this law will affect us that will come into force three months after its publication in the official Bulletin.

Firstly, nine new headings are planned, seven additional regulations, two temporary regulations, one sole repela regulation as well as three final regulations.

In Heading I appear the general regulations applicable, the main guides to understand the law, a Group of definitions are added, as well as the consideration of the policy of dwellings being a service of general interest. Additionally will be added a rule in order to guarantee the presence of dwellings in public politics and, amongst others, in the instruments of urban planning.

In Heading II are to be found the competente of the different public administrations concerning dwellings, guided under the principle of collaboration. Principle that, additionally, will be strengthened in the seven additonal regulations in this law

In Heading III is specified all that relationed with the conditions of the dwellings, accepting a commitment with the quality of life of the inhabitants of the Balearic Islands.

In Heading IV appears all the actions that form a policy of protection and promotion of dwellings. Including a regulation for the protection of the purchasers and users, proceedure to be taken by the Government to attend those of the populations with dificulties in gaining access to a dwelling, a Service of Assistance concerning matters of Dwellings is to be formed, to deal with the problem of unoccupied dwellings as well as the cases of energy poverty.

In Heading V is controlled the Autonomous Board of Dwellings and Heading VI includes the Board of the fight against Energy Poverty.

In Heading VII is controlled the obligation of the deposit of guarantees for rentals (not included in this obligation are the contracts prior to the Entrance in force of this rule) and the Registry of Guarantee Deposits for Rental of Urban Properties will be formed.

In Heading VIII will appear the legal system of the dwellings under public protection and in Heading IX will be established a penality system concerning that appearing in the Law.

It will be established as additional to the state regulation all that not ruled by the regulation itself. What is more, the legal rules or those of less status that are contrary to that foreseen in this Law are revoked. Authorization is also given to the competent Government Board and to the Regional Government to issue any secondary regulation and also to be in charge of revising the Law of Consumption concerning dwellings.

After this brief summary of the rule, we will now analyse the aspects that we consider most important in the practise of real estate movements between purchasers, Sellers and real estate agents:

1) Firstly, the aim of this Law is to bring into force the constitucional right of access to a decent and suitable dwelling, something that we believe has been necessary for years after the years of crisis that we have suffered.

Please take note that at all times we are talking about dwellings and not plots, premises, parkings, etc. According to art. 3, letter a, of this draft, dwelling” is any permanente inhabitable building for use as residency of private persons, as long as proof can be shown of the compliance to the conditions of habitability required by the applicable regulation.

2) On the other hand, there appears the figure of the big dwelling holder”, that is described (art. 3, letter h), as the private people or legal entibies that, themselves, directly or indirectly through their involvement in other companies or groups, hold ten or more dwellings as owners, rental, use or any other legal figure that authorise them to determine their use, and that hold as activity that of construction, real estate promotion, Brokerage, negotiation, investment, purchase/sale, rental or funding of dwellings.

Due to the specific concern of this law with the unoccupied dwellings, the big dwelling Holders will be required, as per art. 33 of this law, to send to the competent board in the matter of dwellings a list of the unoccupied dwellings in order to register same in the Registry [of Unoccupied Dwellings] and will have the “obligation of informing the competent board in the matter of dwellings any change with respect to the situation of these dwellings.

Additionally, as per art. 36, the big Holders included in the Registry will give over the handling to the Balearic Institute of Dwellings (IBAVI) for a minimum periodo of three years.

Lastly, they have the obligation (First and Second Temporary Regulation) within three months to provide an inventory of the protected dwellings in their balance sheet in the Balearic territory, as well as those that are in the situation of being unoccupied.

3) The art. 12 is very important in the sense of it being compulsory in any sale, rental or transfer of use, to provide a copy of a valid housing certificate or, if applicable the final certificate. Should neither one nor the other be available, this will be stated in the contract or public deed.

4) Another key article of this draft is the 17, whose first section states the offer, promotion and publicity aimed to the sale or the rental of dwellings will adjust to the principles of truthfulness, insomuch as no Basic facts will be hidden of the objects in the matter nor that the other party can be lead to any type of mistake with economic repercussions.

5) Additionally (section three), the details, the characteristics and the conditions concerning the construction, the situation, the services, the installations, the purchase, the use and the payment of the dwellings included in the offer, promotion and the publicity can be demanded later by the purchaser, even though these do not sepcifically appear in the contract of sale.

In other words, that the information in the publicity, offer and promotion will be binding and can be demanded by the purchaser, it must also be truthful, transparent, clear and without indistinctness. Whereby not only will it respond in a civil manner but also are planned administrative sanctions from the moment this law is approved as well as without underestimating the possible sanctions in matters of consumption.

6) In the art. 18 is foreseen the application of the Law of Consumption also in cases of the purchase of dwellings although this is already in force for private purchasers.

7) In Chapter III of Heading IV is created the Service of Assistance in matters of Dwellings (art. 27) whose function is (art. 28) offer voluntary and free advice to people and familias in the process of access to a dwelling and the defence of same and it is planned the collaboration with different professional colleges, amongst which we understand that possibly will be that of the Lawyers College of the Balearic Islands.

8) Chapter IV of the same Heading will be dedicated to the unoccupied dwellings, which we have stressed in some points concerning the big holders. It is understood that an unoccupied dwelling is that that remains empty in a continuous manner for more than two years for unjustified reasons. A means of proving that the property is empty would be (art. 35) through the low consumptions that can be proved with the invoices of water, gas and electricity.

9) As we have mentioned previously, there will be an obligation of a guarantee deposit and, in fact, art. 54 specifically forces to also prove the payment of the guarantee legally established in order to notarise a rental contract.

10) In the Heading dedicated to the Sanction System the agent of authority is considered as being the civil servant to whom is entrusted the Works of inspection of all that appearing in this Law.

11) The Additional Second Regulation is particularly important, in the sense that it foresees that “the notaries, the property registrars, the Banks, the real estate property agents and the remainder of people taking part in the process of sale of the dwellings will keep watch on the application of the regulations of this Law.

In other words, they are all inforced to keep watch that this Law is complied with and therefore we understand that all corresponding responsabilities will be placed in the case of non compliance or the lack of transparency in the operations that take place.

12) Additionally, it defines the administrador of buildings and the estate agent, although it does not state real estate agent, therefore there is the doubt as to if this refers to registered real estate agents or not. As it is a draft we will have to see the final text to know what the legislator wishes to be understood.

In any case, perhaps it will have to be the development of the regulation that states the requirements to carry out the activity of real estate agent and in particular their entry in the mentioned public registry of real estate agents. The Regulation that we believe will not be long in developing after the entrance in force of the law.

13) It is foreseen as compulsory the necessity to sign a commission form between the professional and the user of the service. Special attention must be made to this document, as it must be remembered that the offer will be binding (art. 17) and the purchaser will be able to demand the details, characteristics, conditions, etc, of the offer.

14) Lastly, the real estate agents or agencies must be listed in the administrative registry that will be created for this means as we have mentioned previously.

As you can see, new changes in the rules are approaching that should be immediately taken into account in order to not come up against any problem. In Bufete Frau it would be our pleasure to offer you our best legal advice in this matter although we will have to wait until the publication of the legal order in order to see the final text of the Law.

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