By Andrea Carrasco López, Lawyer and activist for the housing movement & Germán M. Teruel Lozano, Doctor of Laws, member of RACSE/ANESC

 

Access to decent housing in Spain is now a serious social issue, currently affecting thousands of families. However, it is difficult to accurately assess the extent of the problem because the available figures are inaccurate or incomplete. According to official figures,  in 2014 28,877 foreclosures led to evictions (an 11.9% increase over 2013)[1]; this figure does not distinguish between eviction from a family home and a notice to quit other types of property. However, according to the Banco de España, there was a 2% increase in the handover of homes arising from legal decisions between 2013 and 2014[2]. All indicators point to the fact that the housing situation in Spain is continuing to deteriorate, but how has this situation come about?

 

There is no single answer to this question. The causes include a long list of factors which together create a fatal mixture: the difficulty of accessing the rental market; growing debt on the part of families as a result of the economic recession and rising unemployment[3] and the cancellation of loans; government cuts to welfare and subsidies because of the economic crisis; corruption and speculation at local government level, which exacerbated the property bubble; dwindling social housing stock (1.1% of the housing stock in Spain)[4] and the high proportion of vacant properties (3.44 million in the 2011 census)[5], among others. Was anybody surprised by the outcomes arising from this toxic blend of ingredients? Not at all. As far back as 2006, the threat to housing in Spain had been described in a report by the United Nations Special Rapporteur in the wake of his visit to the country, warning of a disastrous future for the right to housing[6].

 

Given these facts, have any subsequent governments taken any appropriate measures? The answer is again no. Despite the fact that the number of victims has continued to grow in recent years, the measures adopted by public  authorities have been inadequate, with only very small steps forward[7]. The Code of Best Banking Practice in 2012 (amended in 2013 and 2015)[8] should be mentioned.  It can be applied to the banks and is intended to offer those evicted parties who are able to comply with a rigid set of requirements, the option to restructure their debt, a reduced sum to pay, or, where appropriate, and always assuming the agreement of the bank, the “datio pro soluto” – which means handing the keys back to the bank in return for the cancellation of the mortgage. Another new solution was the possibility of delaying eviction in the case of individuals who were seen to be in a situation of “special vulnerability”[9]. In addition, we are still waiting for clarification about the interpretation of the Spanish stipulations of Directive 93/13/CEE[10], given the inadequate level to which it has been transposed into Spain as regards the revision of unfair terms in mortgage contracts currently under resolution by the European Union Court of Justice.[11]

 

Even so, a great many matters have been left unresolved. For example, according to the current design of the mortgage settlement procedure, debtors must give up their homes to the bank, but are liable to repay the remaining debt , which is usually impossible.  Families are thus condemned to a state of never-ending debt. The legally required “special vulnerability” requirements are so restrictive that many borrowers in danger of social exclusion are unable to meet them. Nor has any solution been reached for the inequality of the parties to mortgage loan agreements[12], given that the financial institution is in a position to choose the nature of the proceedings to be executed against the debtor (out-of-court or otherwise, for example); or the imposition of certain clauses which introduce a clear inequality between the consumer and the bank (transfer of credit without the consent of the borrower, the right to sue after only three non-payments, among others). Are there really any viable alternatives, other than refinancing (extending the payment deadline and the amount of the mortgage), for debtors experiencing financial difficulties? Can there be outcomes other than eviction for families in Spain?

 

Proposals currently under review to deal with the situation include: expanding the social housing stock and prohibiting the sale of social housing to vulture funds; improved access to social rentals, such that they become a genuine alternative to ownership; sanctioning banking institutions which keep properties empty for long periods of time, or compulsorily purchasing the properties, as in some laws already passed by some of the regional governments[13]; certain legal reforms which provide viable, accessible solutions, tending to establish a better balance in the currently unfair position between consumer and bank, plus measures designed to clarify liabilities in the case of debt securitisation undertaken by many banking institutions and with regard to the so-called junk or subprime mortgages.

 

It is beyond dispute that a home is an essential good, a basic need, and its absence prevents personal and family development, inhibits privacy and hinders the exercise of other human rights. According to General Comment Nº4 of the United Nations’ Committee on Economic, Social and Cultural Rights the right to housing should not be interpreted in a narrow or restrictive sense which equates it with, for example, the shelter provided by merely having a roof over one's head or views shelter exclusively as a commodity. Rather it should be seen as the right to live somewhere in security, peace and dignity.[14] Among the various features it should possess are some level of security of tenure, “in order that a suitable lifestyle may be enjoyed”.[15] Also conclusive is the Spanish Constitution (CE), which, in article 47, acknowledges the right to a decent home and directly orders the public authorities to promote “the necessary conditions and establish appropriate standards in order to make this right effective, regulating land use in accordance with the general interest in order to prevent speculation”. Many international treaties also exist[16] expressing this essential social right, to be interpreted in the light of article 10.2 CE.

 

This means that a greater commitment can be demanded of the public authorities to recognise and guarantee the right to a home as a genuinely effective right, with a view to preventing speculation. Furthermore, when this social right is in question, the courts must settle matters on the basis of the most favourable interpretation of such right, in compliance with internationally recognised standards. Despite the difficulties, as illuminated by the claim established by the Platform for People Affected by Mortgages[17] “Yes, they can but they are unwilling”, in the final analysis, everything is a matter of political will.

 

 




[2] Banco de España: Datasheet on residential mortgage property settlement  (July 30 2015) http://www.bde.es/f/webbde/GAP/Secciones/SalaPrensa/NotasInformativas/Briefing_notes/es/notabe300715.pdf

[3] National Institute of Statistics data (2008–2015): http://www.ine.es/daco/daco42/daco4211/epa0115.pdf

[4] Data and figures supplied by Amnesty International ( 2015): https://www.es.amnesty.org/paises/espana/derecho-a-la-vivienda/

[5] Population and housing figures for 2011 from the National Institute of Statistics: http://www.ine.es/censos2011_datos/cen11_datos_inicio.htm

[6] Report by the Special Rapporteur on adequate housing during the visit to Spain (2006): 

http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=7769&LangID=E

[7] Report of The Observatory of ESCR (Economic, Social, and Cultural Rights) and the Platform for People Affected by Mortgages (2013): “Housing Emergency in the |Spanish |State: the mortgage settlement crisis and evictions from the human rights perspective”: http://afectadosporlahipoteca.com/2013/12/17/informe-emergencia-habitacional/

[8] Royal Decree/Law  6/2012, of March 9, regarding urgent measures for the protection of destitute mortgage borrowers: https://www.boe.es/buscar/act.php?id=BOE-A-2012-3394

[9] Royal Decree/Law 27/2012, of November 15, regarding urgent measures to strengthen the protection of destitute mortgage borrowers (http://www.boe.es/buscar/act.php?id=BOE-A-2012-14115 ); Law 1/2013, of May 14, regarding urgent measures to strengthen the protection of destitute mortgage borrowers, and the restructuring of debt and social rentals (http://www.boe.es/buscar/act.php?id=BOE-A-2013-5073 ) and Royal Decree/Law 1/2015, of February 27, regarding a mechanism for a second chance, financial burden reduction and other measures of a social nature (http://www.boe.es/buscar/act.php?id=BOE-A-2015-2109 ).

[10] Council Directive 93/13/CEE, of April 5 1993, on unfair terms in consumer contracts.

[11] SSTJUE, Case C-415/11, Mohamed Aziz c. Catalunyacaixa, March 14 2013; Case C‑226/12 Constructora Principado SA c. José Ignacio Menéndez Álvarez, January 16 2014 and Case C-169/14, Sánchez Morcillo c. BBVA, of July 17 2014.

[12] Report by Amnesty International Spain: “The rights of the evicted. The right to a home and mortgage evictions in Spain” (June 19 2015).

[13] Among other Regional laws: Law 18/2007, of December 28, on the right to a home, Parliament of Catalonia https://www.boe.es/diario_boe/txt.php?id=BOE-A-2008-3657; Law 1/2010, of March 8, on regulating the right to housing in Andalusia http://www.boe.es/diario_boe/txt.php?id=BOE-A-2010-5218 and Law 4/2013, of October 1, regarding measures to guarantee the social purpose of the home http://www.boe.es/diario_boe/txt.php?id=BOE-A-2013-11497 (amended by the ruling of the Spanish Constitutional Court  93/2015, of May 14). 

[14] CESCR General Comment Nº4 (1991): “The right to adequate housing: Art.11 (1) of the Covenant”.  http://www.unhchr.ch/tbs/doc.nsf/(Symbol)/469f4d91a9378221c12563ed0053547e?Opendocument

[15] Resolution A/HRC/25/L.18/Rev.1 Council of Human Rights (March 26 2014): “Adequate housing as an integral part of a satisfactory standard of living” http://ap.ohchr.org/documents/dpage_e.aspx?si=A/HRC/25/L.18/Rev.1

[16] Among others, see the Compact on Economic, Social and Cultural Rights (art. 11); the Universal Declaration of Human Rights (art. 25) and the EU Charter of Fundamental Rights (art. 32.3).

[17] Official webpage of the Platform for People Affected by Mortgages: http://afectadosporlahipoteca.com/

 

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