The Rights Group asks: Why would you buy in Spain?

By Mark Wilkins, 31 October 2006

Please note that the information provided in this article is of a general interest nature and intended as a basic outline only. You are well advised to contact a professional for advice specific to your circumstances. Nothing contained in this article should be seen or taken as the writer or publisher providing legal or financial advice.

For most people the dictionary definition of the words “relax”, “retire” or “leisure property” embrace a number of distinct and altogether gentler notions of “peace”, “escape” and “tranquillity”. Such notions are entirely at odds with nerve-jangling words such as “stress”, “nightmare”, “demolition” or “fraud”.

However, in Spain, it seems that in certain quarters there’s a desire to reduce the ability of would-be expats to achieve their goal. So much so that I am forced to ask, “Why would you buy in Spain?”

A report today carried on the excellent Expatica service noted that Spain’s new environmental tsar, Antonio Vercher, is quoted as saying in the Spanish daily El País that buyers of illegally-built homes are to be considered as guilty of playing a part in the scam.

What?

A quick check of the date on my daily newspaper expecting to see a flurry of “spaghetti tree harvest” and “driving test for dogs” stories to coincide with the 1 April dateline confirms that it is actually the penultimate day of October 2006.

It is argued that such a step by Sr Vercher is aimed at halting the property speculation which is believed to be the root cause of the building of an estimated 100,000 illegal homes across Spain. Apparently, Vercher has further indicated that whilst some – yet to be specified – compensation will be paid to those owners who lose their properties, he will knock down their homes.

Isn’t that like blaming turkeys for Christmas?

Does this mean that owners who discover their properties have been built without the correct licences could now actually face demolition? Are both the illegal developer and the owner to be punished for the fraud clearly not perpetrated by the latter? The answer to both of these questions appears to be “yes”.

There was a collective exhalation of breath following Operation Malaya – which exposed the corruption in Marbella – in the expectation that finally the local county council in Seville could rectify the planning position on several thousand properties in its autonomous region. It seems that the rug may have been well and truly pulled on the long-expected plans of the Junta and the Management Committee which currently runs Marbella.

The Spanish administration appears to be taking the unusual step of saying that unfortunate or hoodwinked buyers are simply not innocent parties. However, there is no suggestion that their culpability has the effect of exonerating the developer or promoter?

This news comes on the same day that Overseas Property Professional weekly news (opp.org.uk) reports, that Spain’s government has launched a policy of zero tolerance towards the ever-increasing number of senior officials in Spain’s major resorts who have been removed from office as a result of being implicated in cases of planning irregularities. This invariably means that land which broadly equates to “green belt” in the UK, has been converted into “urban” land and built on.

Sorry? Doesn’t that sound as if someone is eating the same piece of cake twice? The logic being: “If we are going to blame someone, then what’s the harm in blaming everyone?”

Expect a flurry of “Land Grab”-type law cases being referred to the European Court by purchasers anxious not to see their life savings junked in a pile of rubble as a result of this monumentally ill-conceived action by the Spanish government.

As Kevin Costner is told in Field of Dreams, “If you build it, they will come.” The same is true of the willingness and desire of Northern Europeans for leisure or relocation property in Spain.

Those familiar with my jottings over the years – and it’s been five years since my family sought and found a new life in Spain – will know that I have a virtually limitless list of reasons for living or spending the lion’s share of your year in Spain. Are the quality of life, the healthcare, the transportation links, the infrastructure, the sport, the food, and the wine to be compromised by this sinister little piece of buck-passing?

The arguments will rumble on but to my mind there are a handful of very basic lessons that the new would-be purchaser simply must learn from this saga:

1. We will never tire of telling clients that they must not under any circumstances appoint their lawyer as a result of a recommendation from the estate agent who is selling to them. Contrary to popular opinion, not all agents are fire-breathing egocentrics who are only interested in their commission; there are many sensible agents who see the potential for conflict of interests and would prefer not to see themselves in problems later on.
2. Your local lawyer needs to be “driven” to ensure that they turn over as many stones as may be required to ensure that all your questions are thoroughly answered and that your interests are properly protected.
3. The agreement you sign must comprehensively detail the specifics of the property being purchased. This is particularly relevant to an off-plan purchase, where the specification of the property – its internal and external m², views, gardens, configuration of rooms, qualities of bathroom and kitchen fittings and equipment, floor and wardrobe finishes etc – must be specified in as much detail as possible.
4. Ensure that the Bank Guarantees that each developer is required by law to offer a purchaser are in place. They need to be completed to cover the entire amount that you are paying – which will mean they will need amending over the course of your build out to reflect the further payments that you have made. Finally, they should expire only after the formal and legally possible completion by you – meaning that the property is delivered to you free from defective title, wholly in conformity with the specification contained in the purchase contract and in a sound condition.
5. Ensure that the decennial – or 10-year – post-build insurance is properly in place. If you are purchasing from the initial purchaser, then ensure that this insurance  – or more importantly the benefit of it – is assigned to you, thereby protecting your interests should you need to make a subsequent claim under it.

© Mark F R Wilkins 2006 (Marbella)