The new regulation of property loan
agreements and the handling
of personal data by political parties

Recognition of economic and social development

Article in Caja Siete Blog, 27 june 2019

Leopoldo Cólogan

Banana plantations in Buenavista del Norte, Tenerife

The first impression counts, and as Oscar Wilde put it, there is no second chance for the first impression. “In this era, in which things are judged so easily just by appearances, for a lack of better documentation,” said María Luisa Alonso Duro in her book Las tres Cocinas, involving a modern cook, a countryside cook and a dietary cook, written in 1933, when women in Spain voted for the first time and the third anarchist rebellion took place.

This first impression in the world of gastronomy is determined by presentation. For this reason, the first part of her book is dedicated to the organisation of food, the presentation of the table and the composition of the menu, and it ends with the etiquette to be kept at the table. The rest of the book, a large part of it, is dedicated to a large number of wonderful recipes, i.e. to the substance, which is even more important.

If we transpose the above to the new Act 5/2019 of 15 March, which regulates property loan contracts and came into force on 16 June 2019, the first impression is one of confusion and it has been met with multiple reactions.

These include the apparent recovery of the real estate development sector, which is not a luxury one, being slowed down, because it is feared that access to financing will be more restricted, as it is the strictest standard for financial institutions, establishing more responsibility in their behaviour towards the borrower.

The substance of Act 5/2019 introduces provisions that seek to promote legal certainty, transparency and comprehension of the contracts and the clauses they include, as well as a fair balance between the parties in order to prevent what Directive 2014/17/UE of the European Parliament and Council of 4 February 2014 terms irresponsibility in the granting and procuring of loans.

The following is also established: New training requirements for the staff of banking institutions; restrictions on their remuneration and incentive policies; prohibition of sales related to product packages; restrictions on commissions or compensations of creditors due to partial or full cancellations of the loan; favouring of subrogation and modifying novation of loans and currency exchange.

One of the most relevant issues of Act 5/2019 is that it extends its legal framework to all natural persons, irrespective of whether they are consumers or not, unlike the Directive. It therefore extends the scope of protection to groups such as self-employed workers, who are debtors, bondsmen or guarantors of loans that are secured through a mortgage or other security right pertaining to immovable property used for residential purposes or the purpose of which is to acquire or retain property rights on land or buildings built or to be built.

It also establishes a detailed regulation of the pre-contractual phase ensuring that the borrower can assess and understand the necessary information and assigning the notary the role of providing him/her with impartial advice, who must verify compliance with the principle of material transparency at the time of authorising the loan contract or mortgage loan in a public deed. It also sets out employer obligations at the time of transferring the mortgaged property, as well as obligations for notaries and registrars at the time of authorising or registering the mortgage loan, and a valuation system for immovable property and interest on arrears.

The explanation of grounds for the regulation is careful to note that new projections will generally not apply retroactively, even though the new regulation regarding the early termination of the loan contract will apply to contracts that pre-date entry into force if they include early termination clauses, unless the debtor claims that the included projection is more favourable to him and the early termination has not occurred beforehand.

Another relevant development is that, in certain cases, the possibility for mortgagors to have an extended period of ten days to file an opposition due to the potential existence of unfair terms has been established, in accordance with the judgements of 29 October 2015 and 26 January 2017 passed down by the Court of Justice of the European Union.

“In this era, in which things are judged so easily just by appearances, for a lack of better documentation".

Oscar Wilde

On the other hand, as is the case with necessity, which sharpens the mind, creativity has a connection with melancholy and depression, as shown on the hot evening of 7 June 2019 on the 18th anniversary of Centro Mencey, which is a specialist centre for psychology, psychiatry and speech therapy.

I never imagined the emotional charge of the messages of Charles Chaplin until that day, when the highly technical and masterful event took place, which was beyond my understanding but captivated me. It took place within the framework of summertime Italian film screenings and was followed by a colloquium outside in the centre of Santa Cruz de Tenerife, which included a presentation of the excellent work carried out by internationally renowned psychologist David Trujillo.

There is no doubt that the search for oneself, and being oneself, has an impact on relationships with others. The same can be seen in the professional and business world, where the first impression is the cover letter sent to potential clients, in job interviews and to potential partners or collaborators.

With that in mind, there is the need for management and to assess whether the message conveyed in that first impression is in line with the message to be conveyed, given the consequences, and lessons must be learned from any mistakes made.

In a society where we don’t have time nor are we interested in delving into all the news around us, the first impression is the one that sticks, and in general public opinion, we can all be manipulated, both collectively and individually. Therefore, the decalogues for manipulation include, within the framework of the strategy, creating a problem that does not exist, to later propose and implement solutions to the problem, with short, concise and repetitive messages.

The importance of handling information and personal data correctly is clear because a manipulation strategy is more effective if the profile and mentality of the group to which it is addressed is known beforehand.

This echoes the judgement of 22 May 2019 of the Plenum of the Constitutional Tribunal, motion 1405/2019, which ruled that political parties may not collect data relating to the political opinions of citizens and unanimously declared that Paragraph 1 of Article 58 bis of the Organic Law on the General Electoral System is unconstitutional, declaring it null and void. The Plenum of the Court states that political opinions constitute sensitive personal data, which has a greater need for protection than other personal data.

Going back to the importance of the first impression, on 25 and 26 April 2019 at the fourth edition of Futurismo Canarias, which was organised by its Director Guacimara Magdaleno, the award-winning Santiago Puig reminded us that the airport in the south forms tourists’ first impression of Tenerife, and that we should have an airport that gives the first impression we want to make.

The essence, which is even more important, is the contribution of Santiago Puig to the development of what now represents the south of Tenerife, and the contribution of companies such as the CIO group, Compañía de las Islas Occidentales, a family-led company currently directed by Francisco Javier Zamorano, which has reinvented itself, making diversification and excellence its seal of identity. The group dates back to 1902 in the tobacco industry, which was emblematic in the Canary Islands, and with Hotel Bahía del Duque, which currently represents quality tourism in the Canary Islands.

On 10 June 2019, this corporate group was awarded the Gold Medal of the Island of Tenerife by the Island Council for its contribution towards economic and social development, as was Sociedad Agraria de Transformación FAST, which received the same recognition and is currently presided over by Melchor Bravo de Laguna.

SAT FAST is a company with a history dating back to 1914, engaging in agricultural activity, as well as the production and marketing of bananas, which prides itself on unity and innovation and has a great capacity for adaptation. This enabled it to survive the sinking of a ship by a submarine during the First World War, a civil war, after which bananas were declared a staple product, and the isolation of Spain after the Second World War. With all this, it promoted and contributed, together with other producers, towards the creation of COPLACA in 1970 and the EUROBANAN Group in 1993, a leading company in the fruit and vegetable distribution sector in Spain.

This history should remind us that the agricultural and livestock sector produces basic necessities, which are essential for facing situations of extreme crisis, whether caused by nature or by human beings. It should also remind us that it is not only a strategic sector in this regard, but it also helps our economy to be more resilient, thanks to the income generated from the sale of its products and from the aid derived from the European Union’s agricultural policy, with this income being invested in our economy and the relevant taxes being paid.

This was evident in the educational talk held on 14 June 2019, organised by ASAGA Canarias, chaired by Ángela Delgado, with the participation of experts in fiscal law Santiago Vega, Lawyer and Professor at ULPGC, and César Acosta, Partner at Garrigues and Professor at UEC, as a result of the issue caused by the Tax Agency in relation to applying the allowance for tangible property in the agricultural sector in the Canary Islands.

Now, as Oscar Wilde put it, let’s stop writing about life and dedicate ourselves to living it.