Property Deposit Reclaim In Spain

blogs.fco.gov.uk/roller/.../some_encouraging_property_news

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Giles Paxman
Ambassador to Spain, Madrid (RSS feed )

Some encouraging property news
Posted 26 January 2011 by Giles Paxman |

There's some good news recently for British people faced with property
purchases in Spain that have back-fired, building projects that did not meet
the requirements of Spanish law, or constructors who've simply gone bankrupt
and left houses unfinished.

At the end of December, Spain introduced reforms to the Criminal Code which
increase the penalties for town planning crimes and prevent the perpetrators
from profiting from these crimes. They include punishing public officials
who allow illegal properties to be built and stricter penalties for
corruption. Courts can now order the perpetrator to pay the costs of
restoring the land to its original state, without affecting the compensation
owed to purchasers who bought in good faith.

Much as we would like to help, the Embassy cannot get involved in the large
number of individual property cases, all of which are different and often
very complex.  But we do regularly raise the issue in general terms with
Spanish ministers at a national and regional level. We also try to give
British nationals as much advice as we can about how to avoid problems when
buying property and who to turn to if they find themselves in trouble. You
can find this information on our web site.

And there is further encouraging news for purchasers who have bought off
plan and were issued with a bank guarantee.  In December, a court in
Cantabria ruled that a purchaser had the right to demand that the bank which
guaranteed the construction of a property refund the amount paid in advance
by the purchaser when the property was not completed as promised. This may
sound obvious but, surprisingly, many banks had found ways to avoid paying.

The Andalucian regional government has also announced that it is preparing
regulations to deal with the large number of properties in the region that
have been built illegally. This includes legalising properties where
possible, and in some cases issuing a minimum licence allowing the property
to remain even though it is not incorporated into the town plan. We are
working with the regional authorities to get more information on how these
proposals will work and the timeframes involved. We will update our website
with this information in due course.

In addition, a judge in Almeria has this month ruled that although a
property built more than six years ago did not comply with town planning
regulations, the owners have the right to be connected to essential
utilities such as water and electricity. It is not clear whether this ruling
will set any kind of legal precedent for similar cases, but it may be seen
as a glimmer of hope for those who are currently living in illegal
properties without access to water and electricity.

While the above news should bring some comfort to those affected, my advice
for those considering buying in Spain remains very clear: seek independent
legal and financial advice throughout the purchase process and ensure you
have all the correct documentation before signing any contracts.

You can find more information about buying a property in Spain on the
property section of our website.

Giles Paxman