GUIDE LINE TO DEED´S MORTGAGE
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NOTARY´S NAME, PLACE WHERE A DEED IS SIGNED ACCORDING TO NOTARY
COMPETENCE, DATE AND, IF POSSIBLE, THE NUMBER THAT IDENTIFIES THE
DOCUMENT IN ITS ARCHIVE.
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PARTIES IDENTIFICATION AND JUDGEMENT ABOUT THEIR NATURAL/JURIDIC
CAPACITY.
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SPECIFIC SUBMISSION AGREEMENT TO SPANISH LAW, AS LEX REI SITAE LEGISLATION
APLICABLE. ART. 10 CC AND 684 CPA.
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PLOT´S DESCRIPTION AND IDENTIFICATION ACCORDING TO SIMPLE NOTE (NOTA
SIMPLE, FLOTI).
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MORTGAGER´S ENTITLEMENT AND CORRESPONDENCE WITH THE CONTENT OF THE
LAND REGISTER.
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ENCUMBRANCES. CORRESPONDENCE WITH THE CONTENT OF THE NOTA SIMPLE HAS
TO BE VERIFIED. IN ANY CASE THE CONTENT OF THE LAND REGISTER PREVAILS AT THE
MOMENT OF THE RECEPTION OF THE ELECTRONIC DOCUMENT. THE RANKING IS
GUARANTEED BY A TIME STAMP.
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ASSERTION ABOUT LEASES.
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LOAN OR CREDIT ACCOUNT GUARANTEED BY MORTGAGE MUST BE SPECIFIED.
Mortgage in Spain is accessory, and that is the reason why the first clause of the deed
should be the determination of the loan: capital received or limits established for the
borrower disposal. This is the first obligation and specialty principle requests its clear
definition because is not possible to change it during the term of the mortgage.
Deadline and time table for repayment. When a loan has not been still received, the
process to get it has to be indicated. Event future obligations request to define the
loan, fixing maximum amount and a deadline.
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ORDINARY INTEREST RATE AND METHOD TO CALCULATE IT. The rate of interest
ordinary or simple, may be fix or movable; when it may be changed, the rules for
variation have to include a maximum rate, spread, that is a fixed percentage to be
added to the initial interest, period for change, (3, 6, 12 months) an objective and
official index for it, which cannot be influenced directly or indirectly by the bank,
settlement periods, method to calculate the interest, including mathematic formula,
and effective interest rate.
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DELAY INTEREST AND METHOD TO CALCULATE IT. The delay interest requires as well a
method to be calculated, and all these general observations made for ordinary interest
rate have to be fulfilled. Normally a higher rate is added. Anatocism clause cannot be
registered.
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EARLY MATURITY CLAUSES. When we speak about mortgages, it is not correct to refer
to dissolving clauses, because the real right develops its own effects. What happens is
that the deadline scheduled for repayment is brought forward; consistently it is better
to define them as an early maturity clause, those which are connected with them but
they are not the same.
The early maturity clauses must be directly linked with the main debtor obligation:
loan´s repayment or interest. Of course other questions related to the maintenance of
the mortgage guarantee might be included. Ownership´s transfer or lease faculty
cannot be banned in general terms.
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MORTGAGE SET UP AGREEMENT. The specialty principle obliges to split the total
amount guaranteed between capital, ordinary interest, delay interest, judicial costs,
and others concepts that maybe included, as insurance, community costs, tax
connected with property or set up of mortgage, commission, etc. being necessary to
fix an individual amount for each one of them. It is not admitted to request a global
amount. These concepts are reckoned and operate in separate way. With these
premises, mortgagee and mortgager agree that mortgage guarantees against thirds
parties until:
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Amount for capital
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Amount for ordinary interest, which cannot exceed five years, should be calculated
according to the rate; if it is variable, then it must be mindful the maximum stop
predicted for changing.
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Amount for delay interest, which cannot as well, exceed five years; liability for this
concept follows the same rules. Both concepts have to be a clearly differentiated
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Amount for judicial costs.
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Amount for others debts associated as insurance, commission, community costs, etc.
with a maximum limitation.
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It is essential to understand that all these liability limits develop their effects ONLY
against third parties that have got the entry of their property rights after the
mortgage. (Art 114 Mortgage Act). The difference between this maximum and total
amount obtained in the auction must be deposited in favour of these thirds interested,
of course, as long as mortgagee wants to enforce the collateral through the special
procedure instead of one ordinary, because in this last case there is not any limit on
the amount that can be enforced, but the priority of execution against these thirds
parties is determined by seizure ordered in it by a judge. For this reason in practice
only the special procedure is used. In any case, legal action for enforcement has to
specify separately all concepts, calculating each one according to their own rules. This
is the overriding principle according to art 114 Mortgage Act and 692 Civil Process Act.
When mortgage is the unique encumbrance over the property, enforcement can
spread out the total amount owed.
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DOMICILE TO NOTIFICATIONS AND APRAISSAL. Art 682, 683, 686 CPA. To enforce the
mortgage through the special procedure of articles 681 and following of the Civil
Process Act require fixing a domicile for procedural notifications and appraisal.
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This topic is critical according to Spanish law if the mortgage is going to be enforced
through the special procedure, and it is necessary to have it in the deed. Debtor only
can fix one, which later on may be changed according to Civil Process Act. Although it
has been studied the possibility to fix the Notary as a domicile, as long as a neutral
position is insured, in my opinion it is advisable to fix one in Spain; and what could
never be designated as domicile is the own bank or other person related to it. This
double condition is easy to detect by the Notary.
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Appraisal: deed must include an appraisal in order to avoid any controversy about it in
case of judicial execution of mortgage.
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USE OF PROPERTY MORTGAGED. The usse of the plot cannot be changed without the
written authorization of the bank. Mortgager is obliged to maintain in good condition
the property or similar.
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ADITIONS AND IMPROVEMENTS. Agreement about mortgage extension to additions,
improvements and others mobile things that have been incorporated to the plot,
house or flat. Articles 109 to 112 Spanish Mortgage Act.
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CLAUSE ABOUT HAND OVER OF MORTGAGEE RIGHTS. According to 149 Spanish
Mortgage Act we have to distinguish between credit and mortgage.
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DRAWING UP BANK´S GENERAL CONDITIONS. General conditions declared illegal by
case la cannot make an entry. Regarding this matter we remember the important
sentence issued by Spanish Supreme Court last December.
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CLAUSE ABOUT MORTGAGE´S ENFORCEMENT. Forclosure must be ruled according to
Spanish law and related to it is critical to take under account some basics principles.
Special enforce procedure. Arts 681 and following of the Civil Process Act.
1. Once payment default has occurred, the bank may enforce the mortgage
choosing between the different procedures established in CPA, specially
the direct execution procedure of art 681.
2. Authorization to obtain second copies of deed.
3. Agreement about the plot administration and possession in favour of the
bank, art 690
4. Total debt´s liquidation must be certified by the bank according to the
deed clauses, which should be verified with Notary intervention.
Method to settle the account is a critical requirement of mortgage deed.
572,573 AND 685 CPA.
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PERSONAL DATA TREATMENT CLAUSE ACCORDING TO DUTCH LAW.
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SPANISH JURISDICTION CLAUSE .ART 10CC AND 684 CPA.
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AUTHORIZATION AND SIGNATURE.
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TAXATION AND CONTRADICTORY TITLES WARNING.
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SPECIALY WARNINGS ACCORDING EXCHEQUER MINISTRY ORDER 5TH MAY 1994
ABOUT THE CONTENT OF CONSUMER MORTGAGE LOANS.
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CROBECO STATEMENT.
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E-SIGNATURE AUTHENTICITY AND CONVEYANCER ATTRIBUTES.
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SPECIAL CLAUSE AUTHORIZING TO NOTARY THE SUBMISSION OF DEED TO SPANISH
REGISTER TROUGH DUTCH CADASTER SYSTEM