ANDORRA Law and Practice Contributed by: Elena Redondo, Albert Hinojosa and Marc Ambrós, Cases & Lacambra
The subordination of a pledge to a newly created one requires express agreement by the parties; its documentation through a notarial deed is highly recommended. 3.8 Lenders’ Liability Under Environmental Laws Overall, Andorran environmental regulations fol - low the “polluter pays principle” and are config - ured as a strict liability system. Therefore, in an enforcement scenario, the new owner of the land corresponding to a real estate asset may be liable for any environmental dam- age caused to that specific plot of land or deriv - ing from it, even if that new owner did not cause any pollution of the real estate, irrespective of the new owner (lender) demanding liability from the prior owner (borrower) on the grounds of latent defects. 3.9 Effects of a Borrower Becoming Insolvent From a general perspective, security interests created by a borrower in favour of a lender are not made void upon the borrower’s declaration of insolvency, as the protection granted to the lender in rem guarantees and its faculties against the guaranteed asset are not affected by the declaration of insolvency or the development of the insolvency procedure, due to their ranking as privileged claims. Nevertheless, the claw-back regime provided for under the Insolvency Decree of 4 October 1969 ( Decret de suspensió de pagaments i fal- lida ) states that the insolvency judge can declare any mortgage or pledge granted over the debtor assets after the cessation-of-payments day in merits of outstanding debts prior to the cessa - tion of payments as unenforceable against the insolvent estate. The insolvency judge can also
declare it unenforceable if the granting of such mortgage or pledge occurred six months prior to the cessation-of-payments day as a gratuitous act. Lastly, the insolvency judge can set the dec - laration of the cessation-of-payments date up to 18 months prior to such an effective declaration. 3.10 Taxes on Loans There are no rules requiring lenders or borrowers to pay registration or similar taxes in connection with real estate mortgage loans. 4. Planning and Zoning 4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning Legislative and governmental controls applica - ble to strategic planning and zoning principally correspond to regional authorities (town halls) of each administrative unit (parish – Parròquia ), even though the Andorran government set out the general boundaries in respect of its development. In this vein, the regional authorities are the com - petent authorities to do the following: • draft, pass and publish the general master plans ( plans d’ordenació i urbanisme parro- quials ) and special plans ( plans especials ), the regulatory state ordinances ( ordenances regu- ladores de la normativa subsidiària ), reform ordinances ( ordenances de rehabilitació ) and protection, sanitation and internal reform programmes ( programes de reforma interior, de protecció i de sanejament ); • advise owners and collaborate with them in drafting and passing town plans ( plans par- cials ); and • issue building licences ( llicències d’obra ).
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