On this page you can consult the various rules of law that are applicable in Spain and that affect the valuation sector, especially the appraisal of immovable property. The following should be highlighted:
- Royal Decree-Law 24/2021, of 2 November, on the transposition of European Union Directives in the area of covered bonds which repeals and replaces Law 2/1981, of 25 March, on Regulation of the Mortgage Market, which established the bases for creating the figure of officially approved appraisal companies.
- Royal Decree 775/1997, on the legal scheme for the official approval of appraisal services and companies, which sets forth the requirements for officially approving companies engaged in the appraisal of immovable properties in the mortgage market.
- Ministerial Order ECO 805/2003, of 27 March, on the valuation standards of immovable property and on specific rights for certain financial purposes, which regulates the methodologies and procedures for drafting appraisals for the mortgage market.
Other specialized, legislative databases in the financial system include that of the Confederación Española de Cajas de Ahorro (Spanish Confederation of Savings Banks), which also presents the original standards and the various updates thereof, in addition to the database of the Spanish Mortgage Association and that of the Bank of Spain.
Links to Legislation are structured as follows:
1. Basic legislation on the Spanish mortgage market
2. Regulation of appraisal companies
3. Valuation standards
4. Valuation obligations that affect credit institutions and Sareb
5. Other applicable standards in Spain
6. Standards under the process of Consultation
1.- Basic legislation of the Spanish mortgage market
1.1. Royal Decree-Law 24/2021 of 2 November on the transposition of European Union Directives in the area of covered bonds.
Act 2/1981, of 25 March, on Regulation of the Mortgage Market (BOE [Official State Gazette] of 15 March 1981) has been rescinded.
1.2. Royal Decree 716/2009, thereby implementing certain aspects of Act 2/1981, on regulation of the mortgage market and other standards of the mortgage and financial system (BOE of 2 May 2009). Article 8(3) of the Royal Decree was amended by Royal Decree 1817/2009. The updated text of the Royal Decree can be found in the following PDF of Financial Legislation of the Bank of Spain.
1.3. Order EHA/2899/2011, of 28 October, on transparency and the protection of customers of banking services (BOE of 29 October 2011).
1.4. Circular 5/2012, of 27 June, on transparency in banking services and liability in the granting of loans (BOE of 6 July 2012).
1.5. Act 1/2013, of 14 May, on measures for strengthening the protection of mortgage debtors, debt restructuring and subsidized leasing.
1.6. Circular 7/2010, of 30 November, to Credit Institutions, implementing certain aspects of the mortgage market.
2.- Rules for Regulated Valuation Companies
2.1. Particulars of the current text of Act 2/1981, on regulation of the mortgage market, referring to appraisal companies.
2.2. Royal Decree 775/1997, on the legal scheme for the official approval of appraisal services and companies (BOE of 13 June 1997).
Article 3(2) thereof was amended by Royal Decree 1332/2005, Article 3(1)(f) and final provision three thereof were amended by Royal Decree 716/2009. The updated text can be found in the following PDF of Financial Legislation of the Bank of Spain.
2.3. Royal Decree 256/2013, of 13 April, thereby incorporating – into the legislation of credit institutions – the criteria of the European Banking Authority of 22 November 2012, on evaluation of the suitability of members of the administrative body and of holders of key functions. This Royal Decree amends the rules of good repute that are applicable at appraisal companies (Final Provision One).
2.4. Circular 3/1998, of 27 January. Officially approved appraisal companies and services. Information to be reported to the Bank of Spain (BOE of 13 February). The current text thereof (amended by Circulars 5/2003 and 2/2009 of the Bank of Spain) can be consulted below.
2.5. Circular 1/2009, of 18 December, to credit institutions and other supervised institutions (BOE of 31 December 2009), which records the obligations of appraisal companies regarding their shareholders and senior executives.
3.- Valuation rules
3.1. Order ECO 805/2003, of 27 March, on the valuation standards of immovable property and on specific rights for certain financial purposes (BOE of 9 April 2003).
3.1.4. Amendment of Order ECO 805/2003 contained in Final Provision Six of Royal Decree 1060/2015, on the Organization, Supervision and Solvency of Insurance Companies.
4.- Valuation obligations affecting credit institutions and SAREB
4.1. Circular 4/2017, of 27 November, of the Bank of Spain, to credit institutions, on public and confidential reporting rules and financial statement formats (B.O.E. of 6 December 2017). SEE ANNEX 9 AND STANDARD 14
4.2. Circular 4/2016, of 27 April, of the Bank of Spain, thereby amending Circular 4/2004, of 22 December, to credit institutions, on public and confidential reporting rules and financial statement formats; and Circular 1/2013, of 24 May, on the Risk Information Centre. (BOE of 6 May 2016)
4.3. Standard 26 of Circular 4/2004, of 22 December, of the Bank of Spain, to credit institutions, on public and confidential reporting rules and financial statement formats.
4.4. Resolution of 1 March 2013, of the Institute of Accounting and Account Auditing, thereby issuing the registration and valuation standards of tangible fixed assets and real estate investments (BOE of 8 March 2013).
4.5. Standard 43.4 of Circular 3/2008 of the Bank of Spain, to credit institutions, on the determination and control of minimum own funds.
4.6. Regulation No 575/2013 of the European Union on prudential requirements for credit institutions: a) Articles 124,125 and 126 pertaining to mortgage risks; b) Article 208 on property valuation; and c) Article 229 on valuation principles for other eligible collateral.
4.7. Annex 9 of Circular 4/2004 of the Bank of Spain, whose sections 17(b) and 32 et seq set forth the obligations on the provision of credits with eligible collateral and awarded assets, and Annex 10, Special Accounting Records of the Mortgage Activity. (REPEALED)
4.8. Standard Sixty of Circular 4/2004, whose section S.5 sets forth the content of the accounting records that banks must have regarding immovable property that constitutes mortgage-backed security.
5.- Other applicable rules in Spain
6.- Rules under consultation
Link to the web page of the Bank of Spain: Circulars and guides in the consultation process