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The Spanish consumers association OCU (Organización de Consumidores y Usarios) has made a formal complaint on behalf of its members to the Spanish government and the attorney-general regarding the fees that are charged by notaries and registrars for the administration of the cancellation of mortgages.
In Spain, once a mortgage is discharged it is highly recommended to have the charge removed from the property registry so that the registry provides an accurate reflection of the current status of the property. This involves having a deed drawn-up by a notary which is then inscribed on the property register.
OCU carried-out an investigation using its own members’ information as data and discovered an alarming discrepancy between supposed fees and those that were in fact being charged. In the opinion of OCU this discrepancy could amount to consumers having being overcharged by more than €93 million Euros in 2010 alone, a figure reached by extrapolating the results of its survey to the 372,042 mortgages that were cancelled.
According to OCU, since new legislation reducing the fees was introduced in 2007, notaries should charge a flat fee of €30,05 regardless of the size of the mortgage being cancelled and an additional €70 for a typical ten page deed. However, the study by OCU found an average charge of €260 from the notaries in the cases analyzed.
As far as the registrars were concerned, OCU determined that the average payment was for €144 when there should have been a typical charge of €24. If the mortgage had been paid off completely then that charge should be reduced by 90% leaving a charge of €2.40 payable for this service.
The notaries and registrars have defended the charges on the basis that the legislation of 2007 is confusing insofar as it does not specify with sufficient clarity the classes of mortgage that should have the tariffs reduced. While some of the provincial Societies of Notaries and the Societies of Registrars have condemned such actions with disciplinary cases pending in some regions against notaries for the practice, others have been aware of the practice and done nothing to stop it. This may have something to do with the fact that the fees generated in the cancellation of mortgages amounts to 15% of the total income of a typical registrar in a regional capital.