SADM Information Finding Visit 21- 23 May 2008
The purpose of the visit was to meet with San Jose, Holaspain, AG2(solicitors and accountants) and Banco Guipuzcoano plus visit SADM and speak to people about the issues to clarify the feasibility of the development.
22 May
San Jose:
An hour long meeting was had with Pilar and we were frank and open with our comments and questions.
We stated that a lot of people wanted the project to go ahead but were concerned that this may not be possible and that solicitors were trying to get people to demand their money back. Pilar replied that the letter sent about the administration said that the project would go ahead. We pointed out that it was not clear as in the letter it stated that we would be creditors and we viewed that meant that we would have to get our money back. Pilar said that was not what San Jose meant to convey. She pointed out that it stated that the project will go ahead but we said but it does not say we can continue with our purchase. Pilar said that the start date for SADM may be a few months away and should not be dependant upon the completion of el Pinet. There may also be the possibility of having the deposit moved to el Pinet.
FACT. San Jose Information Note 15th May 2008, “ The purpose of this procedure is to:..ensure the continuation of the Projects ……..Santa Ana del Monte”
FACT. Costa Blanca News May 23 –29 2008, page 11 …. San Jose stated this week that the clients included in the list would be able to decide whether they wanted their money back or their property built. According to Mariluz Jover…They are also interested in developing Santa Ana del Monte resort in Jumilla
This is what we were told by Pilar who explained that the problem was caused by the bank not being willing to put funds in whilst a debt issue remained unresolved. A group of bank was put together but could not agree a sensible rate of interest for the loan. So administration was entered into. Pilar explained that in Spain this is a new law that enable companies to resolve its financial problems and continue trading. She further explained that those who decide that they want their money back may not get their money from the courts until after the properties are built but they would no longer be in the position of a purchaser as their funds would not be in the purchaser account. NB. If your money is no longer being held as a purchase deposit what status does it have? We will ask our solicitor this.
FACT. AG2 Solicitors email to clients 22 May 2008 .. “ First of all I want to make it 100% clear to you that this I not a Bankruptcy or Liquidation procedure of the company. This is a totally different procedure, which does not necessarily, has to finish with the bankruptcy or liquidation of the company”
We discussed the administration process and that the court would do the appointment of the administrators and that they would audit the company and its assets, liabilities and projected income.
We then said that we needed to know the position regarding the licences and that we wanted to be able to get independent verification of the reply to allay peoples fears. Pilar went and spoke to the San Jose solicitor and came back and explained that the town hall had agreed the licences but that they needed to deposit money with the Town Hall to receive them. Thus, although they do not have the licence it is available to them. This was why they had undertaken the financial procedure of administration, thus enabling the funds to be made available to deposit with the Town Hall and precede with the project. We asked for conformation of this.
FACT. Pilar told us that we could get conformation of this and all of the licences from the Town Hall in Jumilla, she wrote the Spanish name for the Town hall and department we had to ask for. We still have this piece of paper and BrianMags will scan it onto the site. Ayuntamiento Jumilla, Departamente de urbanismo, Residencial Santa Ana del Monte.
FACT. Our bank manger told us that San Jose has 550 staff and it would be a disaster if they did not continue trading.
We asked about the purchasers and were informed that around 50% are Spanish and that people in Jumilla had purchased properties as permanent homes. That over 1500 people have purchased and we stated to Pilar that our deposits paid for the build and that the project had a guaranteed income of over 193 million Euros with just those sales.
We said that we want to help; we want our houses built and SADM to go ahead. We also asked for improved communication to let people know what is going on. Pilar agreed that if we write in expressing our support for the project this will have influence upon the administrators, who will be performing an audit of San Jose’s assets and cash flow projections.
This was a very helpful meeting and allayed some of our concerns, we noted that we told where to get the information regarding the licences from and this was done freely and openly.
Jumilla visit:
We drove to Jumilla and went to the Town Hall, it was closed for a festival with a note on the door.
FACT. We photographed the notice on the door as proof of our visit and BrainMags will post it on the site.
We drove to SADM and looked about. There has been planting on the golf course and where you come of off the main road to the drive leading up to SADM work on the projects road has commenced with central kerbing with plants being put in place. There were workmen on site. We looked t the location and discussed whether we both viewed this as an attractive project and concluded yes as it is beautiful location and appeals to a different type of purchaser than those of the coast. We took some photographs and Brainmags will load them up.
Holaspain:
We met with Vanessa from Holaspain and discussed what Pilar had told us and asked what she had found out from San Jose. Her contacts had confirmed the same information that Pilar had given to us and further more she informed us of the money signs in the eyes of solicitors who are seeing an opportunity to make money out of the situation. She was of the opinion that proceeding with the purchase was the best action and agreed that getting money back through Spanish courts can take a long time and you are highly likely to get back less than you put in due to fees, costs etc
Costa Blanca News:
TonyMal telephoned Costa Blanca News and stated that not every one wanted their money back but wanted their property built. The journalist was stunned and said but they have not got the licence, which, although true, this does not mean that it is not available at the Town hall awaiting the deposit of money from San Jose. He said that he would be interested in purchasers who wished the project to go ahead and have their property to send in a letter. If you wish to let them know that “ I want my house” email it to rwickman@cbnews.es
23 May
AG2 Asesores:
We arrived at our solicitors and stated that we wanted SADM to go ahead and that we wanted them to make sure that our deposits are correctly listed with the courts. We then asked for them to telephone Jumilla Town Hall and ask two questions:
1. Are you waiting for the deposit of money from San Jose before you give them the licence?
2. Does the Town Hall support and agree with the development of Santa Ana del Monte?
The Town Hall was still closed, as was the one in Torrevieja due to a festival. We have instructed our solicitor to get those two questions answered and the replies sent to us ASAP. Further more TonyMal and BrianMags have friends who are fairly fluent in Spanish and are going to ask them to telephone the Jumilla Town Hall. 00 34 968 716 015
Banco Guipuzcoano:
We asked the bank manger about the circumstances of San Jose and he was quite frank in his replies. He said that San Jose has a high level of valuable assets but that there was a cash flow problem caused by a bank being extremely cautious due to the credit crunch. He said it would be a disaster if San Jose ceased trading as it employs 550 staff and it would impact upon other developers and businesses. He believed that this would not be allowed to happen. He also said that the banker looking at the loan application of San Jose would not of taken into account the projected contractual payments on property purchases but an administrator would. We pointed out that the purchasers of SADM are not sub prime purchasers and that we were not amused by the behaviour of the banks! We asked if our mortgage offers for our properties on SADM still stood and he confirmed that they did. He also said that due to the credit crunch they would temporarily increase the term of the mortgage to keep the monthly payments the same and prevent financial hardship for their clients for 2 years.
Estate Agent in la Ziena:
We popped into an estate agent and engaged in conversation and talked about the SADM San Jose problem and she said that the solicitors will be after making money and it takes ages to get your money back through the courts minus costs etc.
Factors to consider:
The global credit crunch is a recently unique event.
Jumilla residents are purchasers at SADM
There have been demonstrations in Spain about housing for the Spanish.
This is not just an “ex-pat issue”
Jumilla will have its economy boosted by SADM
SADM has contracted income of over 193 million Euros from properties
SADM has a very good location
Questions to ask:
Do I want my house?
Do I want to support SADM?
If I become a creditor how long before I get my money and how much will I get?
If the SADM goes ahead how will I feel not having my property?
Conclusion:
We both feel that SADM is a viable project that it is highly likely that it will go ahead and that we want our properties. We await the replies from Jumilla town hall and will post them as soon as we receive them.
Recommendation:
Ensure that your monies are notified to the Court.
We believe that it is important that we form a united body to represent and communicate our position and interests in SADM. We further propose drafting a standard letter in English and Spanish for purchasers to send to:
San Jose Administrators
Jumilla Town Hall ( Mayor)
Murcia Regional Government
Banks
TonyMal / BrianMags 24/05/2008