SPAIN Law and Practice Contributed by: Marta González-Llera, Toni Barios, Jorge del Castillo and Rafael Baena, Cases & Lacambra
Spanish legislation stipulates the order of prefer - ence of certain kinds of credits and establishes those which have special privileges (ie, proper - ties secured by a mortgage). 3.8 Lenders’ Liability Under Environmental Laws A lender may not be liable for the borrower’s breach of the environmental regulations unless it acquires the property where the environmen - tal infringement has been committed due to the enforcement of the security. In such a scenario, the lender could be deemed liable for the envi - ronmental damage. 3.9 Effects of a Borrower Becoming Insolvent In principle, the validity of security interests cre - ated by the borrower shall not be affected by the declaration of insolvency of the borrower. Nevertheless, Royal Legislative-Decree 1/2020, of 5 May, approving the Restated Insolvency Act provides that the special privilege of secured creditors shall be restricted to the fair value of the property or right over which the security has been created, subject to certain deductions, understood in this case as the value resulting from a valuation report issued by an approved appraisal company registered in the Bank of Spain’s Special Register. If the borrower becomes insolvent, certain effects related to security interests are created. Secured claims on assets or rights that are used in the insolvent debtor’s business or required to continue the running of the business may not be initiated or continued until the earlier of: • the date a settlement agreement becomes effective, which does not prevent the right of
separate enforcement over those assets or rights; and • a year from the date of the declaration of bankruptcy without the liquidation phase being opened. 3.10 Taxes on Loans The constitution of a mortgage loan involves a series of necessary expenses, among which are: • fees for the Property Registry, derived from the Inscription in the Registry of the mortgage – these will be determined according to the price of the property and the amount of the mortgage; and • stamp duty. 4. Planning and Zoning 4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning Regional governments hold the territorial and urban planning competence, whilst the Span - ish central government has the competence to set out the basic and general rules and liaise with the regional planning regulation through its sectorial competences (such as ports, roads, coastline and coasts, water planning and energy networks). Town halls are competent in drafting and approv - ing the general municipal urban development plans (PGOU) and other planning and devel - opment instruments, as well as in granting the building licences and permits.
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