Archivo de la etiqueta: Timeshare

GLOSARIO: FRACCIONAL (SISTEMAS)

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GLOSARIO DE LOS NUEVOS PRODUCTOS VACACIONALES , APROVECHAMIENTO Y USOS MIXTOS EN LOS  RESORTS TURÍSTICOS:

 

Fraccional (sistema)

Actualmente están en auge los llamados sistemas “fractional ownership”, como producto que combina el derecho de tiempo compartido o aprovechamiento por turno y el de propiedad; en ambos casos sobre una “fracción” o turno amplio de ocupación y una “fracción” o parte indivisa en la propiedad del inmueble sobre el que recae esta ocupación por turno. Estos inmuebles son normalmente apartamentos de gran superficie o alta calidad, villas o grandes residencias, no siempre destinadas al uso turístico, aunque con determinados servicios no necesariamente propios de la industria hotelera.

ón” o turno amplio de ocupación y una “fracción” o parte indivisa en la propAl glosar en el apartado anterior el sistema “fractional”, se ha hecho referencia a la prohibición del art. 23.4 – LAT 4/2012 de vincular el derecho real de aprovechamiento por turno a una cuota indivisa de la propiedad: Pero ese precepto por una parte se refiere al “derecho real de aprovechamiento por turno” y se extiende además a su formulación alternativa de derecho personal arrendaticio, No obstante Actualmente están en auge los llamados sistemas “fractional ownership”, como producto que combina el derecho de tiempo compartido o aprovechamiento por turno y el de propiedad; en ambos casos sobre una “fracciiedad del inmueble sobre el que recae esta ocupación por turno. Estos inmuebles son normalmente apartamentos de gran superficie o alta calidad, villas o grandes residencias, no siempre destinadas al uso turístico, aunque con determinados servicios no el mismo artículo en su número 8 viene a indicar que las demás modalidades contractuales de constitución de derecho de naturaleza personal o de tipo asociativo, a los que se aplicará el Titulo I de esta Ley (por lo tanto no el Titulo II donde consta esa prohibición).

Obviamente la comunidad finalista y “espontánea” de multipropiedad queda fuere del ámbito -y por lo tanto de la prohibición- del artículo 23.4 citado, pero teniendo en cuenta la exclusividad de la “lex rei sitae” en cuanto a derechos reales y arrendaticios se refiere, surge la duda si es posible constituir esa multipropiedad (véase multipropiedad) no de forma espontánea sino con finalidad de su comercialización, ya sea del tipo factional, “privates” residences” o “branded residences”. Posiblemente el elemento esencial para la respuesta a esta pregunta sería determinar si por una parte los inmuebles forman parte de un establecimiento turístico o están destinados a actividad turística o por ley debieran estarlo, no tanto por las características urbanísticas de los inmuebles, sino por el servicio que se preste, que de ser de establecimiento o alojamiento turístico (o que debiera serlo) podría incluirse en esa prohibición.

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FLOATING & FLEXIBLES TIMESHARE SYSTEMS IN SPAIN

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IN RELATION TO JUDGEMENT NO. 830/2015 ISSUED BY THE PLENARY SESSION OF THE CIVIL CHAMBER OF THE SUPREME COURT ON 15 JANUARY 2015

  “In the legal system established by the Spanish Rotational Enjoyment of Tourist Property Act 42/1998 of 15th December, the fact that the accommodation unit to which the contract relates is not specified therein determines the nullity of the contract according to Article 1.7 in relation to Article 9.1.3 of the Act”.

This paragraph summarises the Case Law Doctrine expressly formulated in Supreme Court Judgement 775/2015, which has doubtlessly raised the alarm and a certain degree of confusion among the entrepreneurial operators in the timeshare/rotational enjoyment sector and among those customers who are satisfied with their product (who are a great majority) and now find themselves at risk of losing their right to occupy a “floating” or “flexible” holiday unit with which they are happy. And this has happened, in my opinion, where the interpretation of such a short text has been disassociated from the background which has led to the conclusions of the aforementioned Judgement and the doctrine therein contained.

In addition, the Judgement contained a dissenting vote by the Judge Mr Antonio Salas Carceller which starts with a partial transcription of Article 9.1.3 of the Rotational Enjoyment Act 42/1998 (hereinafter the REA 42/1998) which demands that certain details must be included in those contracts where a professional marketer participates in the transfer of a rotational enjoyment right; the details to which the transcribed section relates refer to the mandatory inclusion of “an accurate description of the building, its location and the unit to which the right relates, with specific mention of its registration details and the occupation period to which the contract relates, stating the starting and end days and times” (sic), and Judge Mr Salas concludes in his dissenting vote that this must not determine the nullity of the contract as it simply relates to irregularities which may constitute a breach of contract (which can consequently be the subject of an action to terminate the contract within three months thereof =as per the REA 42/1998=) rather than –as the rest of the Court argues– a reason for radical nullity of the contract which, therefore, is not amendable by the passing of time.

Resultado de imagen de imagenes gratis casas flotantes

Such differing views between the position of the majority of the Court and Judge Mr Salas’ dissenting vote is doubtlessly very important but, before commenting on its implications from a legal point of view, an important practical conclusion should be drawn from this to prevent litigation in such a complex –and often misunderstood or misinterpreted– matter, i.e. that the first rule for the commercialisation of this kind of right is that utmost care and maximum precision must be observed in drawing up the contracts and other documents aimed at the client-consumer, without any verbal promises or the clichés or vicious practices of past times, in order to prevent the nullity, annullability or termination of contracts and the imposition of penalties in a Sector which has changed a lot but continues to carry the burden of a bad reputation which still exists today, albeit to a large extent undeservedly.

Let us take as an example the contract which resulted in the court proceeding and Case Law Doctrine mentioned at the beginning. A quick reading of this contract, which is complicated fundamentally because it relates to a “complex subject” whose elements are determinable (flexible) insomuch as they relate to the occupation of various units –one of them not located in Spain– and to weekly periods which are also determinable (flexible), would suffice to understand without much difficulty that it lacks the minimum degree of rigour which would be required irrespective of the omission of certain details.

But the concerns which the Supreme Court Judgement 775/2015 has raised among the entrepreneurial agents of this type of activity, which is the fundamental subject of this article, is that it may have been interpreted or concluded from its considerations that the Doctrine therein contained entails nothing short of a prohibition, by reason of nullity, of the timeshare or rotational enjoyment structures known as “floating or flexible” systems, whether in respect of the determination of the “unit”, of the “annual occupation period” or of both.

If we confine ourselves to the paragraph reproduced at the beginning of this article, which transcribes the strict legal doctrine established by the Plenary Session of the Supreme Court, an initial, rushed conclusion may seem to indicate (obviously with the support of its remaining considerations) that, as an essential and inescapable requirement, “failure to determine the unit” results in the prohibition of rotational enjoyment contracts whose subject has not been determined (that is, perfectly and initially specified) in the contract and in the legal system or structure on which the contract is based.

The above Case Law Doctrine does not expressly contemplate the need, for the same reasons, to “determine the annual occupation period”, although it is reasonable to assume, from the context of the Judgement itself, that such failure to determine the occupation period must also be regarded as the absence of an essential element of the subject of the contract which could also result in nullity of the contract.

The above Judgement, which as explained by Judge Mr Salas cites the REA 42/1998 to state that the subject of the contract has not been “determined” due to the absence of the mentions set forth in Article 7.1 thereof –which in Judge Salas’ opinion are not what constitute the “true subject” of the contract as this should be determined by the rules of the Civil Code which refer to the original absence of such an essential element (the subject of the contract) – ,  has chosen to apply a rule which is not the rule envisaged for any of such cases (sic).

As the majority of the timeshare operators at whom this Blog is aimed are not Spanish and in many cases come from territories with Anglo-Saxon-based legal systems or for any other reason use or are familiar with legal institutions of this tradition, I believe that it is necessary to make some brief –therefore not thorough– clarifications concerning the essential requirements of the contract as briefly, albeit accurately, set forth in Article 1261 of the Civil Code, which states that “No contract exists where the following requirements fail to be met:

1. Consent by the contracting parties;

2. A true subject to which the contract relates; and

3. Reason of the obligation thereby established

”.In Spanish Law, the “true” subject of a contract may be determined at the time consent is given or it may be determinable by the application of objective rules at some later time, whether consent is to be given only once or periodically.

We must once again mention the Anglo-Saxon tradition systems where the existence of subjective rules (undetermined legal concepts as denominated by Spanish Case Law) such as “from time to time”, “as may be reasonably determined” or “as determined by the then market conditions” is contrary to the public order demand of the Spanish legal system which requires that those obligations to which initial consent is given in the contract but need to be specified at a future time must be determined or specified when the moment comes by the application of objective rules which, we could exaggeratedly say, must be “an almost mathematical result of applying the premises agreed in such rules”, so that the determination or specification of the subject is not left up to the will or arbitrary decision of one of the contracting parties.

In this regard, the subject of the contract may take the form of future things (e.g. an unbuilt house whose determination or specification would be set in the “architectonic project” which would from the start constitute a part of the contract) or future services which are not contrary to Law or to proper conduct (Article 1272 of the Civil Code).

Focusing on the title of this Article and the concerns expressed by entrepreneurial operators in this Sector, I believe it is right to say that Judgement 775/2015 does not in any way regard the systems colloquially and commonly known as floating or flexible (determinable) as being prohibited. And such an assertion is made despite the fact that the Court deems the contract null and void by reason of lack of subject as it considers that Article 7.1 of the REA 42/1998 is applicable when its states that “where the contract whereby any other in-rem or personal right is created or transferred […] regarding the use of one or more real properties during a determinable period each year, outside the scope of this Act, shall be fully null and void”.

The conclusions which, in my judgement, can be drawn from the foregoing, are as follows:

            First.– It is expressly acknowledged that the constitution and transfer of rotational enjoyment rights, as far as the unit and the occupation period are concerned, can be determinable by the application of objective rules (flexible or floating unit and/or period).

The omission from the contract of the requirements demanded by Article 9 of the REA 42/1998 to which Judgement 775/2015 refers, whether it be regarded as a reason for nullity (as the Court argues) or a reason for termination on the grounds of breach of contract (as maintained by Judge Mr Salas in his dissenting vote), does not entail the prohibition of systems involving flexible units and/or occupation periods,  although it does confine the latter to the restricted formulation thereof as set forth by the now repealed REA 42/1998.

            Second.– The Court’s interpretation, including that of Judge Mr Salas’ dissenting vote, does restrict the constitution and transfer of such rotational enjoyment rights, whether determined or determinable by objective rules (flexible systems), to their only formulation as set forth by the REA 42/1998.

Such a restrictive interpretation was to be fully reviewed as a result of the coming into force of the new rotational enjoyment regulations of 2012, if not upon the coming into force of the Rome I Regulation in late 2009.

              Third.- Contrary to the Supreme Court doctrine established by the Judgement now under discussion and that established by its earlier Judgement of 15 January 2015 and its later Judgement of 5 July 2015, it is my view that flexible systems of personal rights constituted or transferred –including points systems – with subjection to non-Spanish law are lawful in our country and legally valid before, during and after the validity of the now repealed REA 42/1998.

Having reached the above conclusions, I believe it is now necessary to address how and in what way flexible/floating systems of rotational enjoyment of holiday accommodation have been, or can now be, constituted.

A.- SYSTEM OF RIGHTS IN REM OF ROTATIONAL ENJOYMENT.

This is the system specifically regulated by the REA 42/1998 and the current Rotational Enjoyment of Real Property for Tourist Use Act (REA 4/20129), the provisions of which are also applicable on a subsidiary basis to the other system of personal leasehold rights contemplated by the same Act (Article 1.6 REA 42/1998 and Article 23.6 REA 4/2012).

I understand that these in-rem rights, structurally by reason of their own real nature (as stated in Judgement 775/2015), must specifically refer to:

  • Predetermined units (independent registered properties where there is a horizontal division or, in default thereof, units which are described and “registered” at the Land Registry as if they were independent properties).
  • Predetermined occupation periods.
  • In predetermined holiday accommodation resorts.

That is, what has come to be known as “fixed triple” in tourism jargon: fixed building, fixed unit and fixed occupation period.

This does not prevent, in my opinion, the existence of internal fexibilisation rules by way of what we could improperly call an “internal exchange” within the same resort.

B.- SYSTEM OF PERSONAL RIGHTS OF ROTATIONAL ENJOYMENT – SEASONAL LEASEHOLD CONTRACT.

In my opinion, this is the only system of “flexible units and occupation periods” contemplated by the REA 42/1998 (Art. 1.6), albeit not expressly contemplated as such by the current REA 4/2012 (Art. 23.6).

Indeed, the above-mentioned Article of the REA 42/1998, which was in force at the time of conclusion of the contract to which Supreme Court Judgement 775/2015 relates, which is expressly mentioned therein, states that:

“Such contracts shall refer to a predetermined annual season which relates to a predetermined or determinable occupation period within that season and to a predetermined accommodation unit or one which can be determined on the basis of its general conditions, provided that the resort where the right is to be enjoyed has been specified” (sic).

Therefore, they can relate to a flexible occupation period, within the same season, in a flexible accommodation unit of a “predetermined type” in the specified building or resort.

Certainly, the 2nd paragraph of the Ruling contained in the Judgement transcribed at the beginning seems to contradict that set forth in this Article 1.6 of the REA 42/1998 when it states that there is no subject of the contract where the “contract does not specify the unit to which it relates”, but I think that this must be understood as referring to the specific contract to which the Judgement relates and that the legal rule is observed in any case where the units are determined by objective rules for each specific season from among those of the same type included in the same building which, on the other hand, are all specifically and individually  described in the public Deed of constitution of the system which, in addition, must be mandatorily registered at the Land Registry.

Article 23.6 of the current REA 4/2012 also refers to the seasonal leasehold right of rotational enjoyment and, in a wider and more general sense, so to speak, it refers to seasons contracted for whose purpose is the use of one or several accommodation units for overnight stay during more than one occupation period…

In any case, this being a system of a leasehold nature, it must be constituted by public Deed and registered with the Land Registry according to the applicable Spanish regulations.

C.- SYSTEMS OF PERSONAL RIGHTS SUBJECT TO NON-SPANISH LAW

1.- CURRENT SITUATION SINCE THE COMING INTO FORCE OF THE ROME I (EC) REGULATION.

All structures or systems of personal rights subject to non-Spanish law, whether of an EU country or otherwise, provided that they do not contravene any rules of the “laws of public order of the Spanish legal system” or any rules relating to matters of mandatory application in Spain (such as consumer protection rules), are valid in our country, as it is so provided by the Rome I (EC) Regulation which came into force on 17 December 2009.

Such systems of personal rights can be configured with fixed or flexible occupation periods, which can be annual or biennial and can relate to flexible units and can also refer to various buildings in Spain or in several countries, including the so-called “points clubs”; it must be noted, however, that  such freedom of contract also has its limitations, particularly as regards consumers’ rights, not only according to the domestic law to which the system is subject, but also according to the law of the country where the rights are commercialised if any of the properties is located in territory of an EU or EEA Member or if the contract, while not directly related to a real property, relates to the activities carried out by a Member State or projected from or within a Member State.

2.- SITUATION BEFORE THE COMING INTO FORCE OF THE ROME I (EC) REGULATION.

Supreme Court Judgement 775/2015, to which this commentary relates, refers to a contract entered into before the coming into force of the new regulations on rotational enjoyment of 2012 and even before the coming force of the aforementioned Rome I Regulation, so it only takes into account the provisions of the REA 42/1998 which was in full force at that time.

That contract, at that time, was neither formulated as a right in rem nor as a personal leasehold right of rotational enjoyment in the form provided for by the REA 42/1998, but as a confusing personal right which does not only relate to buildings located in Spain but also to a building in another country, and without any express or tacit subjection to foreign law but clearly subject to Spanish Law.

For this reason, I believe that the contract is in contravention of mandatory rules of the Spanish regulations then in force generally, and it would also be in contravention thereof at the present date by virtue of the Rome I Regulation.

But this leads me once more to assert that those contracts relating to “flexible” units, occupation periods and resorts which were entered into before the coming into force of the Rome I Regulation and were tacitly or expressly subjected to non-Spanish law were (without prejudice to the application of public order laws of the Spanish legal system or of consumer protection laws) perfectly valid in Spain, as it was so allowed by the 1980 Rome Convention.

In this sense, we must refer the reader to the article entitled “The Validity of the Club-Trustee System in Spain”, published in this Blog on 21 August 2015.

Once more, as mentioned in the aforementioned Article, this is an opinion article written without prejudice to a more knowledgeable or better informed opinion.

Francisco J. Lizarza

Lizarza Abogados

TIMESHARE, A KEY TO THE FUTURE OF THE HOTEL BUSINESS

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ADAPTATION OF PRE-EXISTING TIMESHARE SYSTEMS AND THE NEW SPANISH ACT 4/2012 OF 6th JULY.

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1.- The second transitory provision of the former Spanish Act of 1998 on Timeshare or Rotational Enjoyment (Act 42/1998 of 15th December) established the obligation for all timeshare systems in existence prior to its coming into force to be adapted to its own provisions “insofar as such an adaptation is consistent with the legal nature of the rights previously created”.

 The way in which the verb “to adapt” was used in this Act was, in my view, inevitably confusing as to the legal implications of such an obligation. If the first meaning of the verb to adapt in Spanish is to “accommodate, adjust to something else”, we  have to conclude that any pre-existing system should by virtue of the said adaptation have accommodated its legal structure to the new right of “rotational enjoyment”.

 However, such an adaptation, which in a literal sense involved changing the nature of the pre-existing right into the new right of “rotational enjoyment” created ex novo by the Act itself, was only one of the possibilities which the word adaptation includes, as it also included the possibility of:

 –          not changing anything with regard to the legal nature of the pre-existing right albeit an obligation existed to “make it public” by execution of a public deed which should explain the kind of right involved, the legal nature which the said right preserved and an express choice for its duration to continue to be the same for which it had been originally created or shorter. Such a deed of adaptation was then registered at the Land Registry, to which all interested parties have public access, thus providing the protection before third parties which such a registration involves according to Spanish Law; or

–          adopting a mixed solution: to adapt some rights (generally those not yet marketed) to the new legal definition and simply make the pre-existing system public with regard to those already marketed.

 The deadline for such an adaptation to be carried out was TWO YEARS from the coming into force of the Act. Nothing prevented the adaptation from being carried out after the said deadline, provided that evidence of its pre-existence was furnished by any means admitted in Law, albeit this involved the imposition of legal sanctions including the possibility of demanding adaptation through the Courts (final paragraph of 2nd Transitory Provision).

 Experience regarding such a mandatory “adaptation” tells us that only in very few cases were pre-existing systems adapted and therefore changed from a legal point of view into the new rights of “rotational enjoyment”. The same experience leads us to conclude that the adaptation merely consisted of giving public status to the nature and rules of the pre-existing legal system by way of a public deed and that, in most cases, a decision was made to “expressly maintain” its original duration, whether it was over 50 years or indefinite in the case of a Club membership which had been established without any time limitation or it related to multi-ownership or to full ownership by shares of a unit which, by definition, is a perpetual right.

F. Lizarza

 2.- The new Act 4/2012, whereby Directive 2008/122/EC was incorporated into Spanish Law, also has a transitory provision which contemplates numerous rules and different possibilities for adaptation, which in this sense entailed a continuation of the possibilities offered or, where applicable, demanded, by the former Act 42/1998.

 But what Act 42/1997 contemplated as an obligation is only an option in the new Act 4/2012 and, while there were three adaptation rules in the former (adaptation as the transformation of a pre-existing right into a right of “rotational enjoyment” defined by Spanish Law, as the mere publication of the pre-existing right without altering its legal nature or as a combination of the two, i.e. with the transformation of the non-marketed rights and the mere publication of those already marketed), the regulations currently in force offer a wider range which, in summary and stressing the fact that this is the undersigned’s interpretation of the current regulations, is as follows:

  • The rights which existed prior to Act 42/1998 (and, therefore, the legal scheme by which they were created) and were by the transformation of their very nature adapted to the rights of rotational enjoyment (whether they were limited rights in rem or leasehold rights) may, if considered suitable, be adapted again to any of the modalities recognised by the new Act 4/2012.
  1. Similarly, the pre-existing rights which were merely made public can be so published again, if considered suitable (as this is not mandatory as aforesaid), in order to be adapted to any one of the said modalities.
  2. Special mention should be made to the possibility similarly to adapt to the new Act 4/2012 the contracts and legal systems which, although in existence before the 1998 Act, were never adapted to Act 42/1998, although a time limitation is established on the duration of these rights whereby their lifetime may not exceed that established as non-adaptation penalty in the former Act, i.e. their lifetime may not be in excess of fifty years from the date on which the said rule came into force (5th January 1999) even if they had been originally constituted for a longer period or their duration was indefinite.

 It is interesting at this point to analyse what will happen after the elapse of the maximum 50-year period with the legal systems which existed  before, and were never adapted to, Act 42/1998, even if only in respect of the two majority systems – i.e. the personal rights system subject to non-Spanish Law called Club/Trustee and the functional community of property system subject to Spanish Law called “multi-ownership”.

 My view is that, in the first case, the Club (and, therefore, the system) must be dissolved or liquidated unless an extension thereof is agreed by its members, although this would not be binding on the dissenting members who may always choose to leave the Club, obviously also in this case with the possibility of the relevant civil sanctions being applied.

 In the second case, the functional multi-ownership community would be terminated by operation of Law and it would become an ordinary community of property, which would entail the application of the regulation provided for by the Civil Code whereby the allocation of annual occupation periods inherent in each owner’s undivided share would disappear. It is questionable whether each member would be entitled to a preferential right of purchase in the event that any owner decided to transfer their share, or that each member would be entitled to apply for the division of the communal thing (if capable of being divided) or the sale thereof for the proceeds to be distributed in proportion to the share owned by each member, as this would be a functional community which is characterised by the purpose of the property. I understand that, on the basis of this interpretation, such rights of division (which on the other hand is physically impossible) or pre-emption would not apply, but this is open to debate.

 From the foregoing and the literal wording of the Sole Transitory Provision of Act 4/2012 can be inferred that all systems in existence before the enactment of the new Act 4/2012 can be adapted to it, whether by its mere publication or by transforming its very legal nature “in any one of the forms” recognised by the said Act.

 Therefore, in order to study the content of the adaptation to the new Act where the legal nature of the pre-existing right is transformed, the various forms of adaptation admitted by the said Act need to be specified.

 The modalities expressly admitted in Title II of the Act are obviously two: the limited right in rem of rotational enjoyment defined by Spanish Law and the personal-leasehold right of rotational enjoyment.

 But also, in my opinion, Section 23.8 recognises the validity of any other contractual modality of creation of personal rights or rights of an associative nature with the same objective scope, constituted under and on the terms provided for by the regulations of the EU and, particularly, in accordance with the Rome I Regulation, i.e. personal rights subject to non-Spanish Law.

This rule, therefore, would indicate that voluntary adaptation to Act 4/2012 of systems constituted before its coming into force (whether or not before the 1998 Act) may transform the pre-existing system in one of the following ways:

 –          Personal right in rem systems, whether or not subject to Spanish Law, in existence before the enactment of Act 42/1998, or personal right systems subject to non-Spanish Law constituted before or after the said Act under the 1980 Rome Convention (and, where applicable, the EU Regulation ROME I), can be transformed into legally-defined right of rotational enjoyment systems, of an in-rem or a leasehold nature, but may in no event become personal rights subject to Spanish Law (due to their lack of legal recognition) which, on the other hand, seems incomprehensible.

  • Thus, the predominant pre-existing Club-Trustee system or any other system created under international rules may be transformed into a right of rotational enjoyment system as defined by Spanish Law, in the form of a limited right in rem or seasonal leasehold, or into any other kind of legal system subject to non-Spanish law if so allowed by the latter.
  • It is more questionable to determine whether the system that was usual in Spain before the 1998 Act (i.e. multi-ownership or functional community), in existence before Act 42/1998, can be adapted following the same transformation as aforesaid, that is, even becoming a personal right subject to non-Spanish law. I understand that it cannot as, owing to its in-rem nature, the Spanish rule applies (lex rei sitae – law of the place where the property is situated) and neither 1980’s Rome Convention nor the Rome I Regulation are applicable.

 –          The right in rem of rotational enjoyment defined by Spanish Law, whether created as a new right following the coming into force of Act 42/1998 or by modification of existing rights in accordance with the latter, may also be transformed into the personal-leasehold right of rotational enjoyment defined by Law, and vice versa.

 But such legally-defined rights of rotational enjoyment, where they are of a personal nature, may also be changed into any “personal” right subject to non-Spanish law. The most controversial issue will be the position of those who dissent from such an agreement or fail to attend: The rules and regulations of the modified system will apply in any event.

 I am aware that my interpretation of the latter possibility, which I believe the legal regulation allows, may not be shared, but I must stress that its literal wording does allow it as there is no express or tacit prohibition to do so and, more importantly, there does not seem to be any valid reason to prohibit it.

 –          There is one final possibility, i.e. adapting the “marketed” rights only to the extent that they are made public or not to making them public at all while the legal nature of the “non-marketed” rights is transformed in the manner allowed by the former Act 42/1998. The latter Act having been repealed, there is no specific legal coverage to do this, but I consider that it is not in contravention of any law either.

 All of the above, as has been pointed out, is without prejudice to the mandatory observance of the legal regulations applicable to each system and of its own rules in passing the transformation resolutions and without prejudice to the limits set by the respect of the rights acquired by each holder of a specific right.

Francsco J. Lizarza