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New EU scheme to ensure property buyers' safety
Thursday, June 30, 2011
Sarah Kendell
A pilot scheme currently being trialled in the Netherlands and Spain will see buyers able to apply their own country's laws to property purchases abroad, ensuring their legal safety in the event of developer fraud.
The Cross Border Electronic Conveyancing (CROBECO) scheme, expected to roll out across other EU countries later this year, allows for the process of buying a home to be settled in the buyer's own country, meaning they will be protected by their own laws if there are unforeseen complications with the purchase.
Lib Dem MEP Diana Wallace told the Daily Telegraph she hoped CROBECO would provide "a transparent administration of property deals and a quick and clear judicial process in case something goes wrong." "The EU has a role to play in helping to facilitate property deals across borders and at the very least provide a framework of legal certainty", said Wallace.
With widespread problems for property buyers in Spain in particular, who have found their homes in dispute usually due to planning restrictions they were unaware of on purchase, and have no clear course for seeking compensation, this will come as very welcome news. Buyers of problem properties will now be able to undergo the compensation process in their own country's court, which will simplify the act of getting adequate legal representation and give claims a better chance of success.
Hi,
Just found this info, and I appreciate it's a bit out of date, but has anyone got any new information as it states that it is coming to other EU countries later in the year ???
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belucky 358
lets hope this does happen?. While Spain continues to cheat so many through lack of implementation of its own laws and lack of common sense regulation and justice, then it's just not trustworthy, and that has to be a bare minimum for purchase as it is in the UK and other Euro countries that are fit for the job.
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This appeared under "Will this be the answer to all our problems?" and I replied:
Following a very short period of research during which I failed to find anything on the Telegraph wesite referring to Sarah Kendell, I tracked down the following:
http://mepli.blogspot.com/2010/11/crobeco-cross-border-electronic.html
From what I can read this only applies to the normalisation of documents between various nations (that is a formula which allows conveyancing in one nation to be accepted by another). Property law and the legal system will remain "as is", so it seems unlikely, given the Spanish propensity for vascillation, that a search carried out by a lawyer in say the UK will be any more likely to be backed up by truthful answers than if a Spanish lawyer were involved. Many more deals will fail simply because the required information is not forthcoming. The way for developers in Spain seems to be to rake in as much money as possible, hide it away, and then apply to the court for insolvency, which the court rapidly approves, making it just as unlikely that any money will be left over for the injured party.
I know that I am an incorrigible sceptic, but I cannot see that this will do anything other than allow you to sue a lawyer in your own country who will probably be able to show that he too was conned. I certainly cannot see how this will result in
"Buyers of problem properties will now be able to undergo the compensation process in their own country's court, which will simplify the act of getting adequate legal representation and give claims a better chance of success"
as you will still be seeking redress via a Spanish court. I sincerely hope that I am wrong.
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xetog
I suspect yu are right?. Even if did get any further I would think the Spanish government would very strongly resist a move to a system using common sense implementation of law and real justice for those they've cheated through planning issues, court delays, lack of BG issues etc. It would open the flood gates for compensation for those who followed the rules and trusted in Spains legal system and had that trust very clearly betrayed.
It's not now about 'if' there has been many people cheated by the Spanish system, the evidence is clear for anyone to read, it's now about getting the ugly truths accepted by the Spanishish government and getting them to set up a fund for those they've cheated and of course bringing in strict measures to make sure people can trust in lawyers, councils, quality issues etc during property purchase as they do in the UK and any civalised country. These issues must be a bare minimum before any trust is restored in the Spanish property industry.
I'm not pretending for one moment that the UK is squeaky clean, far from it!, but If we are expected to take any notice of EU directives, then the least we should be able to expect, is a property purchase system that can be trusted with common sense legal rules and integrity that we rightly take for granted in the UK.
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I ahve read of this new system.
It is not easy for a non spanish lawer to do accurate conveyancing in Spain due to the complexity of some institutions which regsitered on the Land Registry precise then a good understanding and mastering of Registry and Property Law to be fully covered.
At other basic levels, it is a very good idea that we all understand all better and better...
_______________________
Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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maria
I agree that this would only work if a lawyer has a clear unstanding of land registry and property law. It's not something that could be achieved quickly. Those working in the property industry in all EU countries would need to learn a minimum EU industry standard. In the meantime though, those already cheated should be recognised and moves made for compensation.
The property purchaser must not be comprimised by lack of regulation, or non implementatation of law, court delays etc, or any fault in the system that is not their fault. This is where it's all so wrong in Spain. The model must be based on fully implemented common sense laws, regulation and justice that we take for granted in the UK, not on the lies, deception and corruption that is so common in Spanish property purchase.
In counties where property purchase is based on common sense law, legal trust and integrity then there isn't a problem, so those rules should be taken as a minimum requirement throughout the EU. Anything less will leave purchasers open to the abuse many have suffered when trying to buy property in Spain.
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Goodstich:
Completely agree with you that during the real estate boom, some lawyers, which worked along with big real estate agencies, selling properties per dozens a day, did not perform the legal work that was due according to our Property Law and our Proffessional Ethical Code.
That does not mean though that following these two bodies of rules a completely safe purchase would have not been possible. Was the same as with many other: overemphasis on the benefit rather than the mission of the proffession.
Of course I agree that commun understanding and commun practises in Europe ( as much as possibe ) are advisable and will be an element of promotion for a healthy market.
This message was last edited by mariadecastro on 17/08/2011.
_______________________
Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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maria
yes, a safe purchase was and is possible and of course was and is the reality for many. Without the common sense regulation and implemented law though, safe purchse in Spain has always been a lottery. It's the same with justice. If you are are lucky you might get a judge who will hear your case in a reasonable time frame, you might get a judge who's not corrupt, and if you win your case you might get your money back?. It's the same with lawyers, you might get a good one?, It's the same with BG's, you might have one and if you are lucky you might even be able to claim on it?, It's the same as land grab or demolition,........ you might be ok??........
This situation is far to often hopeless and wrong though. The buyer needs to know that the regulation, the law and the justice system is trustworthy and works with a minimum standard of integrity. It very often doesn't in Spain and many of us are victims of that.
I know some say that changes are happening, and we have to be patient and wait for Spain to catch up with trustworthy systems, but that's little consolation for those cheated out of their life's savings, homes etc, with no sign of compensation from those crooks in positions of legal trust such as lawyers, judges, planning officers, banks etc.
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I thought that it would be worth setting out the Crebco document in full (my highlights):
Crobeco (Cross Border Electronic Conveyancing) Conference , Brussels 25 November 2010
European Land Registration Association ( ELRA), Permanent Representation of the Freistaat Bayern, Brussels, 25 November 2010 On Thursday 25 November 2010 Bram Akkermans represented M-EPLI and presented a paper on legal aspects of cross border conveyancing. The CROBECO project, which refers to cross-border conveyancing of land, is a project, funded by the European Commission which aims at increasing cross border conveyancing of land in the European Union. The project, which for now consists of a pilot between The Netherlands and Spain concerns a sale and transfer of ownership of land between two Dutch parties, that conclude a Dutch contract of sale and a Dutch notarial deed of conveyance that is sent to Spain for registration and transfer. The project raises several very interesting questions of European private law. First of all, the project moves beyond a mutual recognition approach and aims to create a deed of transfer that is both valid according to Dutch and Spanish law. Hence, there is strictly speaking not a Dutch act that must be recognised in Spain per se, but an act, simply drawn up in another Member State, which still fulfils the requirements of Spanish law (also).
Secondly, the CROBECO project does not aim to change any applicable national law and therefore acts in accordance with the lex rei sitae principle: Spanish law governs the transfer. Moreover, the project does not aim to diminish any role of any actor in the process, but simply seeks to make clever use of existing possibilities and electronic conveyancing systems in place, to increase confidence in cross border contracting and conveyancing in respect to land.
Prof. Sjef van Erp and Bram Akkermans advice on the project and assist in the creation of guidelines to help cross border conveyancing as well as in the creation of a toolbox of standard clauses which could be used in a deed of conveyance. The guidelines will, when followed by the parties and the Dutch notary, increase confidence for such a transaction.
In the future the project might be extended beyond the Netherlands and Spain and include other Member States. Of course this will raise new challenges, for example the inclusion of title deed registration systems and the problem of the active role of the registrar.
It covers only conveyancing only, so that a document transferring property ownership can eventually be prepared in any country. It follows the lex rei stae principle (Latin for "the law where the property is situated"), so since it is Spanish law that applies, I can see no change towards a common European property law. You can still get screwed by the legal system at every turn. There is also no indication that there will be any retrospective look at those who have been, in many cases, ruined by the endemic corruption.
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On the whole, I believe the conveyancing
system in Spain, where a notary ensures that most, if not every T is crossed, before
the transaction can go through, is better than that employed the in UK.
Of course every system is open to possible
abuse and dishonest people everywhere will always be on the look out for loop
holes which they can exploit at the expense of, dare I say, the gullible and or the greedy.
I have bought and sold several properties
in Spain and (so far) have never had any problems. However, I have never had a mortgage (even one
which I could afford) and I have not taken chances on what I can afford, in the
expectation that I might make a 'fast
buck.'
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xetog
yes, if this were anything like a level playing field and all countries shared a minimum level of trust/integrity/regulation/justice etc, then it might work?, but as things stand, this completely fails to address the issues in the Spanish property industry that have cheated so many, so is probably as good as useless in it's current form.?.
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johnzx
that's clearly not the case. How many have been cheated in the UK through house purchase? Have you not read any petitions, are you not aware of the BG issues, the planning issues, the demoltion issues, the court delay issues, the poor justice issues?. Do you really think everyone cheated was gullible or greedy?, if so, you are way of the mark.
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QUOTE xetog
yes,
if this were anything like a level playing field and all countries shared a
minimum level of trust/integrity/regulation/justice etc, then it might work?,
but as things stand, this completely fails to address the issues in the Spanish property industry that have
cheated so many, so is probably as good as useless in it's current form.?.
The problems which have occurred in Spain are
mainly due to the failure of the legal system to enforce the laws which they
have.
It has been the practice for far too long
that laws have been ignored or circumvented. This has allowed dishonest town halls, property promotors, agents etc to defraud people. All of those acts should have been investigated and prosecuted by the legal system. That they have not been is the fault of the legal authorities, not failures in the laws which do exist for that purpose.
I used to wonder why when a property was being
extended the new walls got painted long before the work was finished. I
later realised it was so that the new work did not stand out, and thus to be stopped by
any enthusiastic building inspector.
In UK, if
one starts to build without the correct licences the building inspector pays a
call and stops the work until either it is approved or the order has been made
to demolish what has been done.
In Spain for
so long illegal building work has been ignored and later 'legalised'. Is it any wonder that we heard so often from lawyers, promotors and builders, 'that's the way we do it in Spain'. And that was, and it was not until the bubble burst that it stopped. Had there been no crisis the illegal properties would have been legalised.
What to do now?
In cases where there has been blatant
disregard for local building regulations the local government officers, the
mayors etc, should be held personally responsible, and liable to confiscation of
their all private assets.
In the case of those who over extended themselves by taking mortages they could not afford, I am sorry, but it's rather like putting your money on a horse which then looses. Nobody made you do it. You cannot cry foul and arrest the bookie.
This message was last edited by johnzx on 17/08/2011.
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Er.... The quote was from Goodstich44, not me, although I do agree with it.
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xetog. apologies for the error
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johnzx
yes, I think most would agree about your mortgage point. They gambled and lost.
and yes, some of the biggest problems facing those who did their homework and followed the rules, are lack of implementation of laws and regulation followed by lack of justice.
The hope of the content in the original post was that Spain would have to abide by the laws and regulations that within reason, safeguard the purchase of property. The UK isn't perfect by a long shot, but when buying property you can rely on a level of integrity from those in positions of legal trust from lawyers through to the justice system. I think that's all most expect, but sadly that's not been the case for many when buying in Spain.
If and when the faults are recognised by those in power or changes are forced through to bring some trust in the system and those waiting for compensation from the government/banks/courts are given justice, then I think alot of confidence will be restored, and will hopefully put Spain in a better position when the worldwide crisis improves?, but both of those hopes still look along way off at the moment.?.
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Surely the problem is that no-one is willing to stand up for the poor punter. Any Government will stay aloof and maintain the status quo as long as their tenure in power is not threatened by the opinion of the majority of voters, which is just not going to happen. When we see lawyers willing to take on the prosecution of other lawyers (as in the UK), then we might see some change as the courts will have to come down on one side or the other. As in the UK, all the real power rests in the hands of lawyers and until they put their own corrupt house in order, nothing will change.
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xetog
so true. Lawyers must be making a fortune out of this, and I think there lies the problem. Most cases should have been sorted at the regulation stage, but with little or no regulation what option has the punter got who's already been cheated, but to cough up for expensive litigation through often unregulated lawyers?. Even if they win their case, the unregulated courts mean bad decisions are often made regarding appeals by the crooks or following unnacepable delays in the court hearing in which time the crook has gone bust anyway!.
Some time back I said to maria that I though lawyers could do so much more to help, by standing together in protest of the very obvious flaws in the Spanish property industry that have hurt so many. She said she tried to get fellow lawyers on board but had very little response.
It's just a bloody big con by those holding top positions of legal trust. They all know full well just how wrong it all is, but as you say, without the will of the people to protest, then those cheated are just looked at as a minority that can be swept under the carpet. What I don't think the powers that be realise is that in these days of amazing communication, that 'so called' minority are being heard by many of those who potentially could do much to improve the Spanish property industry, but wont touch it with a bargepole until changes are made, and I'm not sure that can be swept under the carpet?.
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It would take the few moral lawyers with extreme courage to change things. There have been many instances of people in history who have become hero's for making a moral stand. Unfortunately most have also been awarded the epithet; martyr and few want to go that far!
As you say, social networking has become a powerful tool in influencing masses of people (as we have recently seen in the UK). I have little experience with Facebook and Twitter as I like generally to keep myself private and cannot see that the life of a 68 year old retiree will make electrifying reading. However, I am about to buy a smartphone, so maybe I will get one of the kids to show me how it works.
Unfortunately corruption permeates the whole world. Here in the UK we have plenty of examples in recent times:
- Politicians (expenses & brown envelopes)
- Newspapers (hacking)
- Police (bribes)
Fortunately, we also have a public voice, which for the most part is missing in Spain. I continue to believe that until the lawyers clean up their own house any meaningful changes will be slow. If we can think of a way to make social networking effective in Spain then you might be on to something.
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xetog
yes I don't think there's much doubt about corruption in the UK, It's how it hits the man in the street though that's different I feel?. House purchase is the the biggest investment most average income people will ever make. How many victims have had serious problems with that huge investment before trying to buy in Spain.?
As for social networking, I feel a bit long in the tooth for that at 53, so well done on getting a smartphone.
I'd like to think the good lawyers will stand out through word of mouth.....or social networking?, and leave the bad one's out of work?. With more info' available I think that is changing now, though without protest from lawyers, they can only work within the crappy system as it stands now.
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