Regulatory Alerts2019-03-16
Law 5/2019, of 15 March, regulating real estate credit contracts.
Issued by the Head of State of Spain, Law 5/2019 transposes EU Directive 2014/17/EU and establishes a comprehensive legal framework for real estate credit contracts, extending consumer protections to all natural persons. The legislation mandates strict transparency and conduct rules for lenders and intermediaries, introduces notarial advisory duties, prohibits tied sales, and grants borrowers the right to convert foreign-currency loans to their income currency while limiting early repayment penalties. Furthermore, it standardizes contract termination and default interest criteria, regulates credit intermediaries and lenders through mandatory registration and supervision, and outlines a proportional sanctioning regime to safeguard borrowers and ensure financial stability.