Friday, 14 October 2011

Notaries charge up to six times the legal fee for cancelling a mortgage

SPAIN According to OCU (Organización de Consumidores y Usuarios), the consumers organization, Spanish consumers overpaid €93 million to notaries and property registrars in 2010, for the last bureacratic hurdle in cancelling a mortgage: its cancellation. 92% of bills examined by the organization showed some irregularity. As an average, notaries charged up to six times the fees established by new regulations that came into effect in 2007, which at the time was supposed to see a considerable decrease in the costs of cancelling a mortgage. In the case of property registrars, excesses in billing was over ten times the official tariffs. Extrapolating the data in OCU's report, the 372,042 mortgage cancellations that took place in 2010, it would seem that notaries and property registrars overcharged their clients by up to €93 million in a single year. According to OCU, since the changes in 2007, notaries should be charging only>>>€30.05 as a fixed fee for the mortgage cancellation document. Add other details, and a ten page document shouldn't cost more than €70. However, the average charge in the notaries' invoices studied by OCU is €260. Property registrars, who should apply the tariffs to the part of the mortgage to be returned (which is zero if the mortgage to be cancelled has been paid off) and reduce it by 90%. The maths result in a maximum of €2.40, which, added to the rest of the chargeable details, adds up to a maximum of €24, not the average €144 OCU found to be charged.

OCU has sent the information to the Ministry of Justice, to Directory General of Registrars and Notaries and the Public Prosecutor so that the authorities can officially request Notaries and Property Registrars to examine all the invoices for mortgage cancellations dated from December 2007 and to return, if shown, the monies overcharged to the clients.

OCU's National Director,  José María Múgica, says that the organization has two objectives: "We are asking the DPP to order the return of the amounts overcharged to all those who cancelled their mortgages last year; and we ask consumers to check their invoices before paying." As to charges from notaries and registrars organization that the report is 'lacking in clarity', he points out that "this is untrue but it's in their interest to create confusion." He adds that a sentence from Madrid's Supreme Court agrees with OCU's interpretation of the maximum charges involved.

Stung by OCU's accusations, The National Council of Notaries is requesting the Ministries of Justice and Treasury for an update in the fees charged by notaries, which hasn't changed since 1989. A note from this organization says, "We want to allviate the downturn in invoicing and losses at some Notarías as a result of the crisis." This from Manuel López Pardiñas, the notaries' new President.

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