Real Estate 2024

ANDORRA Law and Practice Contributed by: Elena Redondo, Albert Hinojosa and Marc Ambrós, Cases & Lacambra

certain categories of foreign persons” and that such criteria shall take into consideration “how a foreign person is connected to a foreign country or foreign government”. FIRRMA does not single out any specific country. CFIUS’s authorities may be applied to address the national security risks posed by foreign investment in the US, regardless of where the investments originate. Therefore, FIRRMA will also apply to investments made from Andorra to the US. 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security Notary fees are generated concerning the grant - ing and enforcement of security over real estate (usually a mortgage or a pledge) to benefit from a priority over other creditors in an insolvency scenario. No documentary taxes or registration fees are generated in connection with the granting and enforcement of security over real estate assets. 3.5 Legal Requirements Before an Entity Can Give Valid Security Other than the limits on financial assistance out - lined in 3.1 Financing Acquisitions of Commer- cial Real Estate , no legal rules or requirements must be complied with for an entity to give valid security over its real estate assets. However, such a decision authorising the creation of valid security over specific asset(s) must be adopted according to the generic legal and statutory requirements that apply to the company. 3.6 Formalities When a Borrower Is in Default No specific formalities or obstacles need to be overcome to enforce a security over real estate against a defaulting borrower, although the

granting of security over real estate by public deed before a notary is mandatory in the case of creating a mortgage and advisable regarding the granting of pledges. Priority of the lender’s security interest is deter - mined by strict order of creation ( prior tempore potior iure ). In a scenario of borrower default, legal action must be taken by the lender by means of the following. • A declarative procedure to ascertain the existence and quantification of the debt. • Filing a payment demand before the compe - tent courts after such declarative procedure. A notarial enforcement proceeding is also available if the parties have previously agreed to this proceeding and its terms and condi - tions. According to Andorran case law, the enforce - ment procedure cannot be started unless the defaulted amount corresponds to at least three defaulted instalments. The typical range of time needed to successfully enforce and realise on real property security, if such is security is a mortgage, is from six to 12 months. 3.7 Subordinating Existing Debt to Newly Created Debt As there is no land registry in Andorra, secured debt priority is ranked by means of recording in the Andorran Notary Chamber ( Cambra de Notaris del Principat d’Andorra ). The subordination of a secured mortgage to a newly created one requires express agreement between creditors and the raising of such con - sent into the status of a public deed before a public notary.

CHAMBERS.COM