Spain Real Estate News

MADRID, Spain (AP) — Spanish real estate developer Promociones Habitat filed for protection from its creditors Friday.

It was the second major Spanish developer to fall victim to the crash of the real estate and construction sector, after Martinsa-Fadesa in July.

Promociones Habitat said in a statement it is still a viable company, but has been hit hard by the real estate crash and the credit crunch at banks.

The company acknowledged it is saddled with 2.3 euros ($3 billion) in debt.

The popular celebrity footballers hangout, La Manga Club resort in Murcia, has been forced into administration

The world famous residential resort, which is owned by the Spanish developer Medgroup, is the highest profile Spanish scheme to fall foul of the economic crisis.

A spokesperson for La Manga Club says: “This decision will not affect La Manga Club, which will continue to run as normal,” a spokesperson told Spanish Property Buff. “The management team is already working to bring the company out of a state of lack of liquidity and operating deficit in order to stabilise and guarantee its continuity.”

Medgroup has run into difficulties after reportedly being unable to refinance their debts which are estimated to be in the region of £83m.

La Manga Club, which includes 3 golf courses, 28 tennis courts, 8 football pitches, a spa, and a 5-star Hyatt Regency hotel, has run into difficulties in the past, most notably in 1978, when it was sold to P&O after going bust.

“The general crisis being suffered by Spain has particularly affected the high-level tourist sector, with significant reductions in bookings and the number of night stays in high-quality resorts such as La Manga Club; this fall in sales has meant that the company has not been able to comply with the business plan expected for 2008,” explains a press release from Medgroup.

Source: Homes Overseas

Madrid Police have arrested two people after a two-year investigation into a €65 million (£54 million) property scam aimed at foreigners.

Prosecutors believe that as many as 200 overseas investors, most of them from Britain, were persuaded to buy into a number of nonexistent property developments along the southern coast of Spain.

The identities and nationalities of the two people being held were not released.

Police said that more than 20 other suspects from a number of countries were still being sought in connection with the fraudulent scheme.

Source: Times online

Aifos, a holiday home developer based in Marbella, has been forced into receivership by one of its creditors , the Spanish press reports.

The company is reported to have 850 million Euros of debt, which would make it one of the biggest developers to date to go into administration, after Martinsa-Fadesa and Tremon. Its biggest creditor is Banco Popular, which it reportedly owes 200 million Euros, followed by Banco Pastor, which it owes 150 million Euros, though Banco Pastor claims its exposure to Aifos is only around 30 million Euros.

Gestión de Obras y Reformas Ltd, one of Aifos’s suppliers and creditors, started bankruptcy proceedings against Aifos last week in a court in Malaga. Press reports speculate that the failure of the Spanish developer Tremon might have prompted the bankruptcy proceedings against Aifos.

Aifos, one of the biggest developers in Andalucia, has been on course for liquidity problems since 2006, when it was caught up in Operation Malaya, a police operation against municipal corruption. Jesús Ruiz Casado, the owner of Aifos, and Jenaro Briales, the then MD, were arrested on the suspicion of paying bribes. Aifos is also accused of unethical conduct by many of its clients, and has serious, unresolved client problems at many of its developments, some of which have been illegally built.

Aifos’s frustrated clients, some of whom made stage payments 7 or more years ago and still have no home to show for their payments, will need to keep a close eye on proceedings if they wish to avoid losing all hope of recovering their money.

Source: Spanish property insight

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Time is running out for Britons affected by the collapse of another Spanish property developer to put forward their claim for recompense, warns law firm DWF.

The firm says that buyers affected by the collapse of Compañía Inmobiliaria Masdevallia should inform the Spanish court as soon as possible, or appoint a lawyer to do so on their behalf.

Masdevallia was the developer behind the ambitious Nueva Ribera and Nueva Ribera Golf Club developments in Murcia. Both Masdevallia and One Properties, which marketed the schemes and which has also filed for insolvency, appear to be linked to Juan Antonio Roca, ex-planning councillor at the Marbella town hall and one of the main people involved in the Malaya Operation, the anti-corruption campaign in Marbella.

Both companies are in a voluntary insolvency arrangement and administrators have been appointed to supervise their management. Antonio Guillen, a Spanish lawyer with DWF who are acting on behalf of British buyers affected, explained: “The administrators will detail the companies’ resources and assets as well as the debts and point out any possible ways of saving them. This procedure takes time and could prove extremely complicated and frustrating for those who are not familiar with Spanish law.

“Creditors of the insolvent company, and that includes purchasers of properties off-plan or owners of properties that have not been fully finished, should inform the administrators and the court of their credit as soon as possible.

“Under the Spanish Insolvency Act all creditors should receive a personal communication from the administrators but this does not always happen. Therefore it is advisable for anyone affected to contact a lawyer versed in Spanish insolvency law and provide them with any documents that can help to prove the payments they have made. These will have to be lodged with the court to ensure they are included in the final list of creditors.

“It is also necessary to ascertain whether the developer has a bank guarantee in place to cover any amounts paid by the purchasers towards the construction. This is a requirement under Spanish law although not all developers comply. This document is extremely important as it could make all the difference between creditors losing all their money and getting a refund. Your lawyer will check this for you.”

Antonio Guillen is also currently representing clients of Martinsa-Fadesa, Spain’s largest property developer and the largest insolvency in the country’s history, as well as another Spanish developer Herrada del Tollo S.L. He adds: “It is vital for purchasers affected by the insolvency of a Spanish developer to appoint a lawyer as soon as possible to make sure they are duly represented in the insolvency procedure, as well as considering alternative solutions such as enforcing the bank guarantee, if there is one.”

Source: kyero.com

Spanish Prime Minister Jose Luis Rodriguez Zapatero announced the relief plan on Monday, which would also provide new job incentive measures to 500,000 unemployed workers.

Zapatero’s announcement came just after the European Union Commission confirmed that Spain is heading for recession next year, with the unemployment rate, currently at 11.3 percent, predicted to increase to 15 percent.