Brief introduction to the new Law 5/2019, of March 15, regulating real estate credit agreements

Abstract

Law 5/2019, of March 15, regulating real estate credit agreements and Royal Decree 309/2019, of April 26 transpose Directive 2014/17 / EU of the European Parliament and of the Council of 4 of February 2014, on the credit agreements entered into with consumers for residential real estate, with such assets being those that constitute the domestic household, that is, the habitual residence of the family. The Law regulates in detail the pre-contractual information that the lender must provide in the event that a real estate loan or loan contract is intended to be celebrated subject to the scope of Law 5/2019, detailed in its artículo 1 and 2. The lender must evaluate the solvency of the potential borrower, not predominantly based on the expectation of the highest value that the real estate given as collateral can reach. Compliance with the principle of material transparency is ensured through the granting prior to the loan deed of a minutes granted equally before a notary accrediting that the consumer has had the real opportunity to know the economic and legal burden of the loan he signs. The Law also imperatively regulates some extremes of the real estate loan contract with mortgage guarantee on habitual housing, as is the case of default interest or early maturity. As for the type of exit for direct judicial execution, although nothing is expressly regulated, it must be interpreted that the rule currently contained in artículo 682.2.1.º LEC (the type of exit cannot be less than 75% of the value at which the property was appraised) has been tacitly repealed so that the type of exit can no longer be less than the value at which the property has been appraised given in guarantee.