Valuation of properties for lending purposes: the Spanish system in the European context.

Abstract

The aim of this paper is to review, in three different aspects, the current legal framework governing appraisal companies and their activity valuing properties for lending purposes in the Spanish system. Firstly, it analyses the impact the pandemic has had on the sector and what negative consequences could remain, proposing the reinterpretation of the law to neutralise the risk of destabilization that is always present in the mortgage market. Secondly it analyses if the transposition of the Directive 2014/17/EU, through the Law 5/2019, has been fully completed, by contrasting it with the transposition of the same directive in other European countries whose legislations are functionally comparable with Spanish law. Thirdly, the paper reviews the international standards for appraisal companies that the Directive considered reliable standards for the valuation of residential immovable property for mortgage lending purposes and are part of the internal law through the transposition of this Directive. Finally, the paper revises those peculiar characteristics of Spanish law that distinguish it from other legal systems, as well as its integration with the international standards of reference.