Royal Decree-Law 5/2017 of 17 March amending Royal Decree-Law 6/2012 and Law 1/2013 on protection of mortgage debtors without resources

OFFICIAL STATE BULLETIN No. 66 Saturday, March 18, 2017 Sec. I. Page 19786

I. GENERAL PROVISIONS HEAD OF STATE

2985 Royal Decree-Law 5/2017, of March 17, amending Royal Decree-Law 6/2012, of March 9, on urgent measures for the protection of mortgage debtors without resources, and Law 1/2013, of May 14, on measures to strengthen protection for mortgage debtors, debt restructuring, and social housing.

STATEMENT OF MOTIVES

Since 2012, measures have been adopted to address the vulnerability affecting numerous Spanish families as a consequence of factors arising after the economic and financial crisis. The protection of the mortgage debtor has been a constant concern, and the action of public authorities has focused on those debtors without resources who were going through situations of special weakness.

Thus, one of the first measures adopted in this field was the suspension of evictions on primary residences of especially vulnerable groups established in Royal Decree-Law 27/2012, of November 15, on urgent measures to strengthen protection for mortgage debtors. This measure, of an exceptional and temporary nature, affected any judicial process of mortgage execution or extrajudicial sale by which the creditor was awarded the primary residence of persons belonging to certain groups. In these cases, the royal decree-law, without altering the mortgage execution procedure, prevented the eviction that would culminate, if applicable, in the eviction of families.

This royal decree-law was validated and processed as a bill, which led to the approval of Law 1/2013, of May 14, on measures to strengthen protection for mortgage debtors, debt restructuring, and social housing, which maintained the immediate suspension for a period of two years of evictions of families found in a situation of special risk of exclusion.

As a complement to these regulations, Royal Decree-Law 6/2012, of March 9, on urgent measures for the protection of mortgage debtors without resources, established a Code of Good Practices for the viable restructuring of debts secured by a mortgage on the primary residence.

With the two-year period set by Law 1/2013, of May 14, nearing its end, and given that many families were still in a situation of vulnerability, it was considered appropriate to extend the suspension period of evictions by three more years. For this purpose, Article 3 of Royal Decree-Law 1/2015, of February 27, on the second chance mechanism, reduction of financial burden, and other social order measures, amended Law 1/2013, extending the suspension period of evictions until May 15, 2017.

Arriving at the present moment, and despite the important actions aimed at ensuring the restructuring of the mortgage debt of those who suffer extraordinary difficulties in meeting their payments, as well as mechanisms for the flexibility of mortgage execution procedures, there are economic and conjunctural reasons justifying the adoption of three types of measures. First, it is convenient to expand the scope of application of the protection measures for mortgage debtors in a situation of special vulnerability, which involves modifying both the scope of application of the Code of Good Practices and the persons who can benefit from the suspension of evictions on homes. Second, the application of the suspension of eviction is extended by an additional three years from the entry into force of this regulation. Finally, rental mechanisms are established in favor of debtors executed upon the properties whose eviction is subject to suspension.

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OFFICIAL STATE BULLETIN No. 66 Saturday, March 18, 2017 Sec. I. Page 19787 II

Therefore, in the first article, the group of families that can benefit from the measures of the Code of Good Practices is expanded, including families with minor children or where there is a victim of gender violence.

Likewise, Article 1 of this law modifies the Code of Good Practices to give the possibility that those beneficiaries of the suspension of evictions referred to in Article 1 of Law 1/2013, of May 14, who are also clients of entities adhered to the Code of Good Practices, can request the entity to rent their home under preferential conditions for a period of up to five years and five more years if agreed with the entity. This request must be made within a period of six months from, either the entry into force of this royal decree-law, or from when the suspension becomes applicable to them, if this is later than the entry into force.

In the second article, the extension, for an additional period of three years, until May of the year 2020, of the suspension of evictions on primary residences of especially vulnerable groups contained in Law 1/2013 is proposed. Likewise, the subjective scope of application is expanded, in the same line as the Code of Good Practices. In this sense, Law 1/2013, of May 14, is adjusted regarding the definition of situations of special vulnerability, thus enabling a larger number of families to benefit from the suspension.

Additional Provision First provides for the procedure for the adherence of financial entities to this new version of the Code of Good Practices with a more inclusive scope of application and with the right to rent for beneficiaries of the suspension of evictions whose entity is adhered to said Code.

Finally, Additional Provision Second urges the Government to propose, within a period of eight months, measures aimed at facilitating the recovery of ownership by mortgage debtors included in the scope of application of Article 1.1 of Law 1/2013, of May 14, of their primary residence, when this had been the object of a mortgage execution procedure. These measures will take into account the award price of the home and the possibility that certain amounts are deducted from it to determine the sale price to the debtor.

In this regulation, the circumstances of extraordinary and urgent necessity required by Article 86 of the Spanish Constitution for the approval of royal decree-laws concur. At the present moment, it remains necessary to address the situation of those families that continue to suffer economic adversity, which justifies expanding the subjective scope of the Code of Good Practices. The extension of the suspension period of evictions, whose end is imminent, is equally necessary. The scheduled period will end on May 15, 2017, so resorting to the royal decree-law as a normative vehicle to extend this period by another three years is fully justified. It is for this reason that the adoption of such measures requires resorting to the royal decree-law procedure.

In virtue thereof, making use of the authorization contained in Article 86 of the Spanish Constitution, on the proposal of the Minister of Economy, Industry and Competitiveness and after deliberation of the Council of Ministers in its meeting of March 17, 2017,

I ORDER:

Article 1. Modification of Royal Decree-Law 6/2012, of March 9, on urgent measures for the protection of mortgage debtors without resources.

One. Article 3.1.b) of Royal Decree-Law 6/2012, of March 9, on urgent measures for the protection of mortgage debtors without resources, is drafted as follows:

“b) That, in the four years prior to the moment of the request, the family unit has suffered a significant alteration of its economic circumstances, in terms of effort to access housing, or that family circumstances of special vulnerability have arisen during said period.

For these purposes, a significant alteration of economic circumstances shall be understood to have occurred when the burden represented by the mortgage load on family income has multiplied by at least 1.5; unless the entity proves that the mortgage load at the time of granting the loan was equal to or greater than the mortgage load at the time of the request for the application of the Code of Good Practices.

Likewise, the following are understood to be in a family circumstance of special vulnerability:

1.º The large family, in accordance with current legislation.

2.º The single-parent family unit with dependent children.

3.º The family unit in which a minor is included.

4.º The family unit in which any of its members has a recognized disability greater than 33 percent, a situation of dependency, or an illness that incapacitates them credibly and permanently from carrying out a labor activity.

5.º The family unit with which one or more persons live in the same home, who are related to the holder of the mortgage or their spouse by a bond of kinship up to the third degree of consanguinity or affinity, and who are in a personal situation of disability, dependency, or serious illness that incapacitates them credibly and temporarily or permanently from carrying out a labor activity.

6.º The family unit in which there is a victim of gender violence.

7.º The debtor over 60 years of age, even if they do not meet the requirements to be considered a family unit as provided in letter a) of this number.”

Two. Paragraphs 4 and 5 of the annex of the Code of Good Practices for the viable restructuring of debts secured by a mortgage on the primary residence, approved by Royal Decree-Law 6/2012, of March 9, on urgent measures for the protection of mortgage debtors without resources, are modified, and are drafted in the following terms:

“4. Right to rent in case of execution of the primary residence. The executed mortgage debtor whose eviction has been suspended in accordance with the provisions of Article 1.1 of Law 1/2013, of May 14, on measures to strengthen protection for mortgage debtors, debt restructuring, and social housing, may request and obtain from the executing creditor of the home, or person acting on their behalf, the rental of the same for an annual rent maximum of 3 percent of its value at the time of the approval of the auction, determined according to an appraisal, provided by the executed party and certified by a homologated appraiser in accordance with what is provided in Law 2/1981, of March 25, on the Regulation of the Mortgage Market.

The request referred to in the previous paragraph may be made within a period of six months from the entry into force of Royal Decree-Law 5/2017, amending Royal Decree-Law 6/2012, of March 9, on urgent measures for the protection of mortgage debtors without resources and Law 1/2013, of May 14, on measures to strengthen protection for mortgage debtors, debt restructuring, and social housing, for those executed who were already beneficiaries of the suspension and from when the suspension occurs for those who benefit subsequently.

Such lease shall have an annual duration, extendable at the will of the tenant, to complete the period of five years. By mutual agreement between the executed party and the awardee, it may be extended annually for five additional years.

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5. Publicity of the Code of Good Practices. Entities shall guarantee the maximum dissemination of the content of the Code of Good Practices, in particular, among their clients.”

Article 2. Modification of Law 1/2013, of May 14, on measures to strengthen protection for mortgage debtors, debt restructuring, and social housing.

Paragraphs 1 and 2 of Article 1 of Law 1/2013, of May 14, on measures to strengthen protection for mortgage debtors, debt restructuring, and social housing, are drafted as follows:

“1. Until seven years have passed since the entry into force of this Law, eviction shall not proceed when in a judicial or extrajudicial process of mortgage execution the primary residence of persons found in situations of special vulnerability and in the economic circumstances provided in this article has been awarded to the creditor, or to a person acting on their behalf.

During that period, the executed party situated at the threshold of exclusion may request and obtain from the executing creditor of the home adhered to the Code of Good Practices for the viable restructuring of debts secured by a mortgage on the primary residence, approved by Royal Decree-Law 6/2012, of March 9, on urgent measures for the protection of mortgage debtors without resources, or a person acting on their behalf, the rental of the same under the conditions established in paragraph 5 of the annex of said Code.

2. The situations of special vulnerability referred to in the previous paragraph are:

a) Large family, in accordance with current legislation.

b) Single-parent family unit with dependent children.

c) Family unit in which a minor is included.

d) Family unit in which any of its members has a recognized disability degree equal to or greater than 33 percent, a situation of dependency, or an illness that incapacitates them credibly and permanently from carrying out a labor activity.

e) Family unit in which the mortgage debtor is in a situation of unemployment.

f) Family unit with which one or more persons live in the same home, who are related to the holder of the mortgage or their spouse by a bond of kinship up to the third degree of consanguinity or affinity, and who are in a personal situation of disability, dependency, or serious illness that incapacitates them credibly and temporarily or permanently from carrying out a labor activity.

g) Family unit in which there is a victim of gender violence.

h) The debtor over 60 years of age.”

Additional Provision First. Adherence to the “Code of Good Practices for the viable restructuring of debts secured by a mortgage on the primary residence”.

1. All entities that at the entry into force of this royal decree-law were adhered to the “Code of Good Practices for the viable restructuring of debts secured by a mortgage on the primary residence”, regulated in the annex of Royal Decree-Law 6/2012, of March 9, in accordance with the wording in force at the moment of their adherence, shall be considered adhered to said Code in the wording given in this royal decree-law, unless within a period of one month from its entry into force they expressly communicate to the General Secretariat of Treasury and Financial Policy the agreement of their administration body by which they request to remain within the scope of application of the corresponding previous versions.

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2. In the ten days following the expiration of the one-month period established in the previous paragraph, the Secretary of State for Economy and Business Support, by resolution, shall order the publication of the list of adhered entities on the electronic headquarters of the General Secretariat of Treasury and Financial Policy and in the “Official State Bulletin”. Subsequent communications shall be published quarterly on the electronic headquarters of the General Secretariat of Treasury and Financial Policy and in the “Official State Bulletin”, unless there has been no modification.

Additional Provision Second. Complementary Measures.

The Government, within a period of eight months from the entry into force of this royal decree-law, shall propose measures aimed at facilitating the recovery of ownership by mortgage debtors included in the scope of application of Article 1.1 of Law 1/2013, of May 14, of their primary residence, when this had been the object of a mortgage execution procedure.

These measures will take into account the award price of the home itself, the possibility that a part of the amounts paid by the executed party for the amortization of the loan or credit originating the execution and improvements carried out at their expense during the period in which the eviction was suspended are deducted from it, as well as other factors that guarantee an equitable price in the recovery of the home, avoiding situations of asymmetry in this process.

Final Provision First. Competence Titles.

This royal decree-law is issued under the provisions of rules 6th, 8th, 11th, 13th, and 14th of Article 149.1 of the Spanish Constitution, which attribute to the State exclusive competence over commercial and procedural legislation, civil legislation, regulation of registers and public instruments, bases of the organization of credit, banking, and insurance, bases and coordination of the general planning of economic activity, and general treasury and State Debt, respectively.

Final Provision Second. Entry into Force.

This royal decree-law shall enter into force the day following its publication in the “Official State Bulletin”.

Given in Madrid, on March 17, 2017.

FELIPE R.

The President of the Government, MARIANO RAJOY BREY

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