The Council of Ministers today analyzed a report on the Draft Regulatory Law (APL) of Real Estate Credit Contracts whose objective is to reinforce consumer protection and improve transparency in real estate loans. The preliminary draft establishes, among other measures, the obligation to deliver to the consumer a standard form with the characteristics of the contract, the prohibition of related sales and limits the commissions for early cancellation. There will also be an obligation to report on certain clauses and the associated risks, the possible scenarios in contracts at variable interest rates and the itemized expenses associated with signing the contract. In a subsequent regulation, a standard model contract for voluntary use will be approved. Lastly, the control of legality exercised by notaries and registrars in the contracting phase is strengthened for broader consumer advice.

The APL aims to transpose Directive 2014/17 / EU of February 14 into Spanish law, the objective of which is to deepen the creation of a European market for retail financial products. For this, harmonized conditions are established with respect to credits and loans with a mortgage guarantee or intended for residential use. The Spanish standard extends the level of protection of the Directive to the self-employed.

In a first block, the norm analyzed by the Council of Ministers sets the guidelines for conduct to be followed in the process of preparing, promoting, marketing and contracting real estate loans. Specifically, it establishes the obligation of the lender to deliver to the borrower a standardized sheet with all the characteristics of the loan before contracting it (European Standardized Information Sheet or FEIN), which will have the character of a binding offer for a period of seven days. Staff who assess creditworthiness and market real estate loans should have a level of training that ensures that the borrower receives adequate information tailored to their needs by the lender.

Linked sales are also prohibited although combined sales are permitted; that is, those in which the loan is offered separately or in a package. It also establishes the right of the borrower to reimburse, in general, all or part of the loan without more commissions or compensation to the lender than the financial loss during a period and the maximum percentages legally provided.

On the other hand, for the first time in our legal system, the consumer's right to convert the loan denominated in foreign currency to the currency in which the borrower receives his income or that of the Member State in which he resides is regulated, as a coverage mechanism. and protection against exchange risk. And finally, the figure of real estate loan intermediaries, who can operate the freedom to provide services in the EU, or real estate lenders other than financial institutions is regulated.

In a second block, the APL introduces transparency measures in the contracting phase. Thus, together with the standardized pre-contractual information sheet (FEIN), the borrower will be provided with a Standardized Warning Sheet (FiAE) in which the existence of the relevant clauses or elements will be reported (floor clauses, possibility of early expiration, distribution of expenses associated with the granting of the loan and foreign currency loans) and the risks associated with them. In addition, in the case of a variable interest rate loan, the lender is required by law to deliver to the borrower a separate document with a special reference to the periodic installments to be paid by the client in different scenarios of evolution of interest rates.

In the draft contract, the borrower will have disaggregated information on all the expenses associated with signing the contract and there will be a model of a real estate loan contract, regulated by regulatory regulation, that entities and consumers may use on a voluntary basis.

A third block refers to the recruitment phase and the role notaries and registrars play in it. The control of legality carried out by notaries and registrars on the content of the contract is reinforced, so that the deed will not be authorized if the lender does not prove, in particular, that the pre-contractual information has been delivered seven days before to the borrower. In these seven days, the notary will advise the borrower on the draft real estate loan contract and, in particular, on the contractual clauses contained therein. Said advice, together with the handwritten expression of the borrower stating that the pre-contractual documentation has been sent to him and that he understands and accepts its content, will be documented in a notarized document that will have no cost to the borrower.

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