Liability and walking away

Clearly many people are considering the option of walking away from their purchase for various reasons.  It is an option that I have considered but my main concern is the liability that may be involved - put simply will I be chased for the remaining 70%?

My independent Spanish solicitor contacted Corvera on my behalf concerning this issue and came to the conclusion that the worst possible outcome would be a loss of the deposited money. 

Has anyone had any advice from their solicitors?  Does it confer or contradict?

Lots of different views on this issue have sprung up in various places and I think a definitive answer would be useful. 

Whilst I can't give you a definative answer Mr. Unhappy, as I understand it you will only lose monies deposited so far. That is what the contract says so I suspect that that is the case.  However, I wouldn't make any decisions until this time next year when things will either be better or much much worse.

Hi all

There appears to be different opinion on liability some are saying that the liability stops with the 30% deposit, others are saying that you will be pursued for 100% ( I certainly hope that it is the former, as bad as losing 30% would be) , does anyone have any more statements from their solicitiors on the subject? I'm in the process of looking for a new solicitor ( as mine, shall we say, is a little slow in responding ). Some one who wrote on another thread suggested (I think) that maybe a number of us should be represented by the same reputable solicitor as this may give us more clout?


kev

The advice from our solicitor is the same as Mr Unhappy's - ie. that worst case scenario is losing the 30% deposit - which is obviously bad enough.

I have talked to two Spanish solicitors and they say that my liability is limited to the deposit monies I have paid. However I think this rumour might have started because I believe there are some "investors " who have made multiple purchases on Roda ,5 or 6 properties, tried to pull out of them all. There may be any number of reasons. 

As for the economic situation , I agree with previous posts about the severity of the downturn, but as I said about 3 months ago the ECB would cut interest rates in the Autumn, and they have, and will again by the year end, possibly by another 1%. Once the credit crunch eases these cuts will filter down to the mortgage market and make it easier to get a mortgage too. The exchange rate has come back in our favour a little since the summer as well. It's impossible to predict however what the score will be next May/June. 

I saw Fizzler's suggestion about employing an independent solicitor. It  seems pointless to me at the moment. The advice he would give is likely to be the same as most people have been given already, and it's premature, especially if you are thinking of "walking away". Calidona will finish the bits they are building now I think, maybe Phase 3 too. I am more concerned about what happens after that like other "posters". I think at THAT stage there might be an argument for getting some help for those who have decided to go ahead and purchase to ensure the facilities are completed.

I am willing to give Calidona the benefit of the doubt for now.. I mean it's not like we are being asked for any more money , is it?. Worrying yourself to death about it now will get you nowhere. Next year when the properties are completed it will be up to each buyer to decide what is best for them. It's not beyond the bounds of possibility that we might be "incentivised" to go ahead and complete if things are still bad in the markets.I'm sorry to hear about the difficulties some people are in, or feel they will be in next year.

Chris

Hi folks,

Just like most other folks, I've been giving all of this a lot of thought and much as it grieves me to voice the thought........ has anyone apart from me (in connection with "walking away") given any thought to the nightmare scenario of being "visited" by debt collectors, worldwide, if you go for that option, wherever you may hide?.................. 
Oh boy!

These are scary people and the stuff which is seen on the TV programmes and films (I say "apparently" because I do not watch that sort of trash TV etc), I know for a fact, via others with first hand experience of such an exposure, is true.

We have placed our home in Oz on the market, which is heartbreaking, because that is the only way in which we are going to be able to come up with the required monies next May - ish.... IF we can sell. That's the very LAST thing that we need but barring some form of Heaven Sent reprieve which will allow us an escape path, and you all can guess what is meant by that, there is very little, if any choice.

It's only because I care about people, and all of us are almost related via Corvera!, .......that I feel obliged to quietly mention this consideration, the rest is up to you.

I am sure that, given a couple of probably very difficult years, we shall come out at the end of it with a lot more sunlight than there is around nowadays.  Let's hope so and let's hope that Corvera/Calidona stand by us.

With my kindest regards and best wishes, Fizzler.

Hi Fizzler - in order to walk away you must make sure that your solicitors are involved in terminating the contract - this would give you the piece of mind and no fear of visits!!  That's the reason why this thread was started ie the more independent confirmations of this (assuming that we don't all use the same solicitor) the better.

Hello again Mr. Unhappy,

Thanks for that.

I have received another reply from a respondent and I truly value his input and feedback.

However, he feels that the urgency is not there but that is a matter of perspective:  One man can afford to sit back and take the longer course and wait as long as it takes for the distant but inevitable catching up in the Spanish property market to materialise but others (like myself) who are desperately overstretched since the failure of the original concept to have matured by now and borne financial fruit, cannot take the same line.

That's why I suggested that perhaps we should all agree to enlist the services of ONE eminent expert to fight our case NOW and get the full answer NOW, one way or the other because the fragmented approach of all of us, or only some of us, asking our own chosen legal representatives, and at all different levels of inclination, vested interest and aptitude, will result in the same fragmented cross section as we have at present.

My own Abogada and her opinions as listed a day or so back, are a case in point. Many of the opinions which we have read, as submitted by others, clearly state that we can just "walk away" : Diametrically opposed and that is supposed to be a verifiable and accurate legal opinion. It just goes to prove the point, I think?  What do we do if we all pool our different opinions thus gained, only to find ourselves right back where we are today.?

Would it not be better for someone to represent us all, NOW, obtain the result, whatever that may be and if, as we hope in principle, we have a case in our favour, to openly, honestly and completely legally advise us on open forum, with published results (in the form of a legally valid notice plus attendant references, dates etc) and advice and then for him/her, or her/him if you prefer, to proceed to the next step, acting for us and to make the declaration and to achieve a  legal severance FOR us , without our becoming involved as individuals apart from the completion of documentation?

However, even though it's been the weekend, it's interesting to note that there have only been two responses!

I don't know how many "owners" at Corvera frequent this forum out of the total number of sales involved but where are they all... do they frequent different sites, is it complacency and apathy or are they all in the former category of lucky folks who don't need to be bothered by all of this?

I am about the last person to advocate any form of unrest (in addition to the fact that all this sort of thing is way beyond my scope) but it appears to me that we either get on and do something as a group NOW, or, as in my case, sell up and shut up and accept our respective lots.

Procrastination and fragmentation will get us nowhere.

I've already said more than I meant to and have become embroiled and so, forgive me please, in the light of my own circumstances, if I withdraw until perhaps I am asked to subscribe to the joint effort, if it ever happens. Thank you for your understanding.

With best regards, Fizzler.

I can understand people's concerns and financial problems. I have a few now that I didn't have when I bought into Corvera. However, I think the option of walking away at this stage is permature. (Perhaps Fizzler and Anita are right and we should as a group and employ someone to assist us Im just not sure how it would work but I am willing to contribute to working out some process)

My thoughts are as follows:
 I firmly believe that the market will improve but it will be more likely in  2011 rather 2010 so I'm saving like hell to make sure I have enough put by to service the mortgage for 2 years. (Servicing the mortgage for two years,  assuming no rentals is still cheaper than walking away). 
I am confident that the Spanish market will recover by then because the slow down in construction means that the gap between the current over-supply and demand (which will improve again)  will narrow - eventually! 
In addition the situation in the UK should also improve as will sterling I believe, and other Northern European markets will improve  which will help the market too.
People with quality developments like Corvera should do OK - if not well. A big point people seem to miss when they talk about the housing over-supply in Spain is the amount of junk that's out there. Small apartments in poor locations, derelict houses in the country etc etc. Therefore if the market does recover I think we would get our money back at least.
We chose Corvera because of its proximity to Murcia, the new airport, the investment in infrastructure and the growing popularity of the Murcia region both as a holiday/retirement region and because of major businesses relocating there. All these reasons are valid albeit in a longer time frame.

In regard to Corvera I'm in the same boat as many of you and another few months delay would actually help me. My completion is May/June next. I'm sure Calidona will meet this because it is a legel requirement. However, there is the snagging process which adds a month. Then there is the habitation license which will probably take three. You may remember that credit of €3000 they gave us last year? This was to encourage us to complete within three months so there must be some corelation between the two. BAsed on that I expect to complete sometime in September next at the earliest because my solicitor has strongly advised not to complete without the license. That gives me another year to see how things develop before making a decision.
I know people have different financial circumstances and perspectives and indeed some people have bought here as a lifestyle choice and some for an investment - mine is for investment so some delay is good. 
I thought about the walking away option but I have concluded based on all the above that I probably wont unless things are as bad or worse than they are now. I am sure people living through the depression thought it would never end but it did. I can't imagine what is was like then to have to suffer through four years of that - day after day. We will also have a tough couple of years with more bad news than good but  I still think the fundamentals are there to make recovery a real probability and that I will get my money back (probably no profit but in these circumstances thats ok).
 I just think that servicing the mortgage for a year or two after completion should give me that chance, if I walk away there is no chance and the cost to serve for 2 years is much less than the 65k I put in. 
At least I have nearly another year to decide - no point in jumping to panic reactions just yet. I'll decide when I see the circumstances nearer completion date. For those of you whose completion is December 2009 the likelihood is that between snagging and the habitation license you will have until Feb/MArch 2010 before you complete. The world will be a different place by then - better I hope!
Hope this helps - keep the faith!
Best regards
Sean Curtis 
PS
If we do progress Fizzlers idea I am happy to help and contribute. Keep in mind though that less than 50 owners contribute to the forum so we will have a heel of a job contacting the other 950!

G'day Sean (Curtis),

Many thanks for your valued response to my earlier inputs.

I only suggested the case for a united and co-ordinated approach to "walking away", if representation by a supremely well qualified Barrister acting for us all, resulted in a full, clean and healthy (with personal integrity intact), legal severance from our contracts PLUS the return of our deposits. I've got TWO lots of 30% on this and I simply cannot contemplate walking away empty handed AND to be haunted by the spectre of "the knock on the door" at 03:00, even though I don't know yet how we are going to fund our purchases.

Before I forget, may I clarify a point, which I think I've omitted and that is that just as Sean observes, COMPLETING is cheaper than walking away, even on a no-rental, worse case scenario (Heaven forbid!) and, to reiterate my own viewpoint, I'm bordering on broke and I'm not sure how we are going to manage it but if we can somehow do so and survive, I'm sure that in a couple of years, things will have improved no end.

I couldn't agree more about the amount of poor quality mass-produced property which is still giving us all a bad name and swamping the market but as I wrote to Justin, our Webmaster recently, I used the analogy of the kitchen paper towels being used to mop up the spilled milk on the kitchen worktop and I hope that's what is going on right now.

Many of these little villas and so on would still make lovely homes for folks who aspire to living in Spain either permanently or as visitors but we have to endure the pain while the process evolves. It MUST come to an end, PROVIDED that the local and national governments clamp down on the further construction of such projects.

Quality and not quantity are the keywords. Surely the Spanish government and people cannot afford to stand by with an apparent idle arrogance any longer and just watch their whole economy disintegrate?  Why do we not read well founded and publicised statements of such policies?  It's beyond me how they, at least on the face of it, seem to distance themselves from it, as if they don't care or as if nothing is happening? They need to be seen to be doing their bit to restore confidence and rebuild their economy and tourist  trade.

Sadly, because the housing market here (in Oz) is heading, albeit temporarily I feel, the same way as UK, we would like to delay putting our house on the market, pending some kind of miracle(!) or at least saving six months extra rental but seeing that the only way in which we are going to be able to pay for Corvera IS by selling our lovely home here, we are putting it on the open market this week..... Oh Yukko.... all that carry on again and the renting... MORE dead/lost money.

But as you say, the longer they take to complete, the better, as it takes us nearer to Recovery Day.

As I've mentioned and Sean has observed too, we only have about 50 "owners" active on this site.... WHERE are all the rest?, what do they know that we do not?  Are they blissfully ignorant of the issues which seem to plague us?

Anyway folks, it's good to receive realistically placed comments which neither artificially sweeten nor sour unnecessarily, what appears to be the status quo.

If we all voice our balanced thoughts on open forum, we should be able to retain the voice of moderation and common sense AND be able to keep our fingers on the pulse..... and don't forget that the developers will be keeping their beady eyes on this site too..... "Hello again guys and gals!"

Best regards, John/Fizzler.

Good grief I'm not surprised by what I've read but I am amazed at the panic that's setting in by some owners. 
I've just returned from Roda and Corvera.. street lighting and pathways being worked on at Corvera while I was there.
To put things into perspective my friend has tried to sell his UK 2 bed/2 bed apartment with garden 3-4 times in the last 2 years and it hasn't sold. 
He's also put it up for rent and in 6 months it hasn't rented. 
He's an interior designer and the place is affordable £150,000, lovely, and I live in a lovely town!! 
Similar friends with similar stories.
A friend with a small house in Milton Keynes that's lost £40,000 in value in the last 2 years.
There's a new Persimmon development on the outskirts of my town... the land was cleared and now nothing all year.
A Barratt development... looked great... a new marina... now..... no work.
Please calm down and look at what's happening in the world.
I've seen for sale signs up at houses where I live for the past year and they haven't sold. 
Don't freak out over Spain it's happening on our own door steps and all over the world at the moment and a lot of it is due to people wanting lifestyles and material things they simply don't have the money for but want anyway.
The banks are in a mess because they've lent to people that don't have the securities they have for such loans.
If you're honest are you really surprised at the situations people find themselves in.
Spain is no different to the UK, Germany, France, Japan at the moment.
Adjustments will need to be made but panic is not the way forward.
I have concerns over the facilities not being added to the development that were described to us... that will affect the value for sure and I would want pressure legally put on the developer if necessary for that but lets ask the questions and get a written position from Calidona on this.
I met Esther this week and she was very helpful.
I will personally be asking her to look at this website today to see the fear that is around and the legal threats that are brewing.
I think Calidona needs to be contacting ...I'll be contacting Esther and finding out who the senior people are at Calidona. Does anyone know.
Worried about Calidona? Has anyone checked their financial status. Why not do some research. Don't panic when you don't have all the facts it's pointless.
Lets ask direct questions to Calidona and of course to our agents who have probably done mostly nothing since selling to us.
The owners forum or association is a great idea but lets all collect hard facts before we panic ourselves to death please!!

Hear , Hear Lisa!

At last a sensible look at whats happening, i totally agree with mona lisa's comments, for sure we are all concerned regarding finishing off all the promised phases and amenities at corvera, but we must get real to the global situation, mona lisa is spot on to what is happening to the uk building sector, developers would be totally irresponsible to carry on building emtpy shells knowing there no market to sell.
It is unfortunate for all of us tied up in the present financial crisis but hopefully things may improve when confidence is restored.
dave

Fizzler asked earlier where all the other Corvera owners were, as we have not seen "posts" from more than 50 people. Two reasons for this I think. Firstly a number of people, including myself have bought 2 properties,  and secondly, when we bought were told that 45% of buyers were SPANISH. So I guess they aren't interested in THIS site at all. I wonder if they have the same view from where they are sitting?

Chris

Hi Fizzler - Just to say I agree with your comments.


Hi Lisa 

You say that you are not overly concerned about Calidona because the economic downturn has hit the UK and people there can not sell them or rent them out, I'm sure it is of great concern to those that can not sell or rent them. Unfortunately, the fact that the recession has hit the UK is not making me feel any better.

We have bought at Corvera and how the economic recession effects it, is of concern to us (or should be) especially those who have bought on Corvera for investment purposes ( and I believe many of those investors did not buy for the long term). When the properties  appear to have dropped massively in value, will not sell, and will probably not rent out ( at least in the short term), mortgages may be more difficult to get, and due to the devaluation we may not get as much from the mortgage, will all the facilities be completed? and if so when?  these issues and others are a  concern to to us and rightly so ( these are problems for many people and we should not hide them away or pretend they do not exist). If these problems do not effect you directly I would suggest that you just ignored them.

 I do not belive there is a 'panic' but the economic downturn has caused problems, and these problems should be discussed,   people  are just trying to figure out how to solve these problems as best they can. Depending on individual circumstances this may be to walk away ( there may be no other option), granted this decision will not need to be made for a while, but it is best to mull over the options now rather than leave it to the last minute before looking into it. It should be remembered that some peoples life savings are invested in this development and they do not wish to lose them, and to remember that all the investors are not rich millionaires but are just trying to make what money they have work for them. I find it difficult to understand the constant critisim of those who wish to discuss the problems that the economic downturn has caused.

It appears that people have been implying that there has been a lot of  critisisms directed at Corvera recently, I do not believe there has been any significant critisism lately. The communications have improved and the development is proceeding nicely. The problem is the economic downturn.

kev

Thanks Kev - I agree with your sentiments.  I started this thread as an attempt to gather information that may be of use to a few people.  Although it seems that by doing so, accusations of scare-mongering have arisen.  Moreover, I am very concerned that  any comments that have been made could be construed as "legal threats".  This is not the case - I see no problem with exploring our legal rights given the present and future economic climate. 


The economist magazine is due to produce a special report on Spain on the 8th November - this may be of interest to some people.

Lisa

I do admire your positive attitude and agree that we should neither panic nor criticise Calidona. But as Kev says it's the global economic disaster which has caused everything to turn sour. I have not bought a Barrett or Persimmon house in your town so can't really see what relevance that has to this forum. I did however agree to spend nearly £300k on a villa on a golf development with a 5 star hotel and equestrian centre etc etc etc. A villa which is now virtually worthless. If you really think that Corvera will end up as the fantastic resort we all visualized then I fear you are in for a big shock.

Dave

Not panicking but skint !! 

Hi all, Not sure this is the right theme to reply to but the theme seems to have changed, so here goes.

I have just got back from Corvera, (sunday 12th oct) yesterday.

Got a first look at our Menta ph2 apt. 
That was the good news.

The bad news is that the peolple in the sales office seems pretty tight lipped about all the "leisure" facilities that are currently NOT under much construction.

It would be pretty easy in my humble opinion now that the land has been flattened to build the small "urban" development of bars, tennis, stables etc. But not much has happened in that area for a while. I think most of it was done early on, with maybe some of the access roads,drainage and sewage looking like the main reason for work in that area.
The calidona people did answer my questions but were lacking in details and guarantees.
When I asked how long would it be before work started on the leisure facilities, I was told "nothing is being built at the present time as not enough property has been sold and not enough people will live here". When I asked, "when did they think it could be started" it was met with a raised eyebrow and a shrug. When pushed they muttered along the lines of "something would be done eventually" , "tennis, paddle courts" but "until then we would have to use the town for facilities/shops etc". I did say that "Roda was still awaiting there services too and its been several years since most of the buildings were built". no reply, then get told "how superb the clubhouse will be". 
In short I got nowhere, it did not calm my nerves.
I have sent the lady we spoke with, an email today to clarify in writting what she said to us, I await her reply.
At the end of the day we all "bought into the whole lifestyle" yet there is nothing in our contracts to state that.
Why we did not see this before we signed is beyond me.

We stayed at La Torre (Polaris World) during this visit, I have stayed there before too.
I am not sure why it gets a slagging off by some folks but its 99% built and the hotel is just being finished off as we speak. It looks superb, 5star, very grand.

The resort was almost empty of people, not many playing golf either.
They have at least 6/7 bars/resaurants plus many other facilities, the town centre looks good.

I dropped into EL Valle, PW'S top resort, its like a ghost town, the 5star hotel has not been started, there are huge sheets of metal fencing surrounding the area where the hotel/bars/resaurants/tennis courts/laundry etc should be.
All they have is a small combined clubhouse/snack bar/supermarket.
There is a small grill house too nearby.

My point is without the hotel and its attractions and all the other additional services, the resort is pointless and not nice to stay at.

Although much malingned, at least PW have kept building at LT. Shame for the residents of EV. 
It could be a carbon copy of what will happen at Corvera, certainly for the short term.

Rick

Thanks for the feedback Rick

I wish it was not the case but again from the feedback Rick has had from Staff at Corvera, there would appear to be some doubt  as to whether many of the facilities may be completed in a reasonable time or completed at all. Unfortunately we were only told about them verbally , they  were stated in brochures and the internet site but they were not explicitly stated in the contract ( but surely this must count for something, otherwise people could make up any lies thay like outside the contract). 

Does anyone know where we stand if they were to decide not to build them? Or if they were to say something to the effect that they will get around to building them 'one day'. Again I feel this is a genuine concern that should be looked into before signing contracts, rather than sign them and assume they will be.

As you said Rick PW may get a bad press but at least they get on with completing their development within a reasonable timeframe, lets hope Calidona do the same.

kev

(Without Prejudice)
Let's look at this from a different perspective that ultimately will affect us all, Calidona's. 
Corvera is a HUGE project that will cost MILLIONS of Euros to complete.
 If we believe what we are told the land was purchased outright.
The cost of clearance of the land, golf course and build of phase 1 and 2 will probably come directly from deposits received on the entire site.
The cost of building phase 3 onwards however will probably only be covered when the purchasers of phases 1 and 2 begin to complete. 
The cost of other ameneties such as restaurants, shops etc. can probably only be covered when people on phase 3 start to complete.
 This is called CASHFLOW and without it any firm would probably not be able to fund the entire build and face the possibility of insolvency which would help none of us, (with the exeption of those who want their deposits back but I should imagine that would be a drawn out affair?).
Remember, it's not your assets/value that makes you insolvent but an insufficient cashflow (income/expenditure).

After saying all this I still believe we need to keep up the pressure for as much information as Calidona can give us. It's going to be tough over the next 2 years and beyond but hopefully we can all get through it with a smile at the end if not during.