Beware The Cowboy Builders Are Back

This is a warning and really a reminder for people to make sure that you check the legality and understand the process if you are buying off plan because because the cowboy developers are baAck doing business, new company names but the same old story.

If you visit the areas around Torrevieja Costa Blanca you cannot fail to notice the number of cranes and new properties under construction,  lterally thousands of properties, most of which are very modern apartments and villas, grey coloured with lots of glass, untra modern interiors, really what the market is demanding and they are selling

When buying you should always follow simple steps to ensure that you protect you investment, starting with the basics, because even this week I  advised aa purchaser, who almost committed to purchase a property, where there was no bank guarntee or construction licence available, there was an empty plot, sales office onsite and nice brochures with a very low offer price, if it looks too good to be true it normally is

What the cowboy developer will do is offer the agent a high percentage commsion, normally paid from  the deposit to encourage then to bring prospects to that development

So initally check and ask about the history of the developer, how long establsihed, are there any examples of previous work that you can see, not just a showhouse

Construction licence, can you see a copy, is is displayed in the office, how many properties does it cover and is it current

Construction time and contract, before paying anything can an independant lawyer see a copy of the contract, what are the AGREED completion dates and penalties for delays

Specification, does the contract include an exact lits for what is included and the technical specification, plot size, materials etc

Bank guarntees, do they exist , what are the terms, is the money protected and depositied in a escrow type account

When it comes to completion of course the process starts again with the issues of the COH and still the advce to have somebody independant complete a full snagging report and manage the repair process, prior to completionas explained on my own site www.snaggingspain.com

The company that I work with, prior to taking on any new development, has a lawyer vet and  check the full background on the developer and produce a buyers report in English with copies of the complete documentation

As I said earlier, because of the improvng market the cowboys are back so please be careful,  don't leave your brain on the plane or be swayed by some super salesman, whlie you are here on a subsised inspection trip, there is  no such thing as a free lunch

Why buy of plan their are thousands of completed properties for sale throughout Spain especially on the so called golf resorts at bargain Price's and believe me thay are cheep ,a 2 bed apartment that was selling for 150,000eu in the boom day's can now be bought for around the 45,000eu on a golf resort so do you're home work on the Internet and you will find a bargain a good starting point is the polaris world resorts good luck.

The problem is that people don't want the more classic design or even a property on a golf course, they want modern designs and they are selling like crazy, especially the small villas with their own pools on the coast, for around €200k, it is what people want and with the exchange rate at 1.40 what they can afford

The new generation of 3 bed townhouses in this style can be bought for €115k and of course the ongoing community fees are far lower than living on a golf course, with only a short walk to a beach

The number of bank bargains are reducing but yes for example on Las Terrazes the bank have released 400 apartments starting at €41k for a one bed

If you look now at Condado the place is now booming, there are very few bank properties left and I have just read in an interesting article that a Chinese consortium have just bought the commercial centre

Hi Roy

Your Link to your Website  does not work. It says this site has been suspended due to non-verification. What is going on here?????

Thank You

Is there anything in Spain that mirrors the UK's 'House Buyers Report' or 'Full Structual Survey' ? Spanish property is very much cosmetically presented, how is Mr/Mrs bog standard brit supposed to know if a property has been built correctly? As for 'illegal builds' , isn't it your lawyers responsibility to ensure that your purchase is fully legal, after all they charge you enough for their services?  

Roy do you own snaggingspain.com ????

Nigel  You will find inspectahomespain's   own page at :-  http://www.gpispain.com/

Nigel  You will find inspectahomespain's   own page at :-  http://www.gpispain.com/

However,when he says,  "and they are selling like crazy "  I wonder if his other advice should be read in that vein too !

Apologies the domain company have messed up on the snagging forum site so being sorted and yes I own snagging spain

it is not common to have a survey done when buying a Spanish resale property

you only have to live in or visit the area to see how quickly things are selling, for example opposite la zenia boulevard, o

in lo pagan with 200k villas now on 10 months lead time with phases 1, 2 and 3 now almost sold out. At Alfora with more villas all gone

110 units around   in 36 days 

110 Villa's sold in 36 days at 200,000eu a pop not cheep by a long chalk selling at that rate the builders will be able to pay Spain's national Dept off 36x200. =7.2 million now being in the construction game myself it takes some be leaving that the Spanish construction is doing that well you would need more builders on the site than Spain has cockroaches to complete the building work and that is not so with unemployment rates in Spain of 30% .

Sorry Roy   but where I live on the CDS the windows of the real estates ofices are still full of 'sun faded' for sales notices, heavily marked down.  I guess you have found a spot that is not representative of the market as a whole.  Well done.

However, from:-

http://www.onthepulse.es/spanish-property-news/property-purchases-increase-almost-10-in-april-150609

.....................    This further points to a recovery in the sector that has been hit by crisis for more than six years.

During the fourth month of this year, a total of 27,241 transactions were registered – 77% of which involved second-hand or re-sale properties.

These figures are still a long way off the 100,000 operations we were used to seeing on a monthly basis prior to 2008, although that’s probably a good thing as we don’t want a repeat of what happened before when a property bubble was created and then eventually burst and collapsed the whole sector.

Until such time as Ley 57/68 is consistently adhered to in its entirety across all regions of Spain then offplan purchasers will sadly remain at risk.

Likewise for the land registry to be seen as a trusted vehicle in the conveyancing process.

This post was put to primarly to help and remind people t o pay attention to the process because anybody that is around the Orihuela Costa area can testify to the number of crames and new builds in the area, unfortunatley it turns into the normal attempts to discredit the information

Apologies there were not 100 villas sold at €200k the actual number was closer to 15 but this were the figures new developers and they are off plan sales so they will not be seen or reported through the Notarys, till completeion in 6 month plus time, or staged payments made till various stages of payments made

Fact there are more builders and more construction works happening in this area as I say anbody that is around this area can see the growth in sites and cranes bit as you move intp areas lilke Mazarron and Almeria this isn't happening in these areas

In Campoamor and Villamartin alone there are more than 50 new constructions, sites selling properties from `€120k, just down from Villa Martin 6 villas being built from €417k, on Los Collinas golf 20 new villas from €375k and so the list goes on, just look on line at new builds in this area

In Torre De La Horada there are 11 new sites, Lo Pagan 4,

Roy can you post the link to these properties for us to have a look at ?

Roy is correct. Over 200 properties built in the last couple of years and all sold at prices ranging from €140,000 to over €200,000 in La Zenia. Up and coming area with Zenia Boulevard across the road, lots of nightlife in the area and a short walk to the lovely beaches along the Orihuela Costa.

Also in the Lo Marabu/Dona Pepa are there have been five or six new complexes of the same type built in the last year or so and all sold. Over 150 properties in the same price range with some private villas over €400,000 to owners specifications.

All built by Euromarina, a good, respected builder in La Zenia, Quesada and La Manga who don't skimp on quality.

These new ones are not to my taste but they are obviously popular. Seems a bit strange they are being snapped up when resale properties built by the same builder are on the market for ages. For example, one of the new flats and townhouses at 80 sq m with 2 beds going for €140,000 whilst a 3 bed, 2 bath 135 sq m house virtually opposite has been reduced to €97,000.

They have recently completed a complex of 50 properties and there are only a few left and have just started a new complex opposite and people have been buying them off plan like nobody's business. Yet, 2 streets up, nice town houses with double the room and garden size are going at half the price with no takers.

Maybe they have good salesmen in the new property department.

At odds with the thread title, these are definitely not cowboy builders.

I like these new style properties they might look like a square box but for me very nice, just dont fancy paying 200k  plus all the tax for a property in Spain again.Still waiting for my 3% back for my last one.

You can see a good selection of the new builds from a variety of developers on www.girasolhomes.co.uk as you can select on new desigm as an option

Just out of interest have all these new offplan properties that you are referring to, (now built), been issued with all necessary legal licences in place, and do those properties currently still in the process of being built have legal Bank Guarantees in place? Have developers met all the marketing literature promises? Are they also in line with the most recent Costa Ley laws?

Are purchasers still being directed to conveyancing lawyers linked to the developer (conflict of interests)? Are contracts being issued that require revision of cancellation and penalty clauses? If it is an apartment complex, has the developer put in place their own representative acting as Community President and does the developer have a good reputation for payment of community fees for apartments remaining unsold? Is there a reputable Community Management Company in place to oversee maintenance and do they have a good reputation to resolve maintenance issues without conflict of interests? Have all new energy efficiency requirements been met?

Are developers subrogating mortgages and if so do these mortgage conditions need revision? Have new owners been provided with title deed and has the property been correctly registered in the Land Registry?

As more and more purchasers remain aware of these compromising issues that have negatively impacted sales and rightly given rise to the term "cowboy builders", the more incentive there will be for developers to comply with purchasers' increasing demands in this regard, which will be in everyones' interest in the longer term.

ads I believe that you already know the answers to these questions and as I said in my earlier post but this is TOTALLY focused on new off plan developments that are springing on and not even the largest percentage of these, which are legal and provude the necessary guarntees and licences

I think we are at cross purposes here as I am asking about new offplan developments and trying to establish if these new offplan developments that are being promoted are now being built by developers who ARE addressing ALL the requirements specified, that previously gave rise to such major problems.

In other words are contracts being issued now balanced, are they being more ethical in their management and maintenance commitments, their subrogation of mortgages etc, or are there still practices which are continuing cause for concern?

The lack of trust with offplan purchase needs to be re-established and the only way that can happen is if promotors take equal responsibility to ensure that the products they are promoting are being delivered by developers who demonstrate far more ethical standards that no longer place the purchaser at grave risk.

This message was last edited by ads on 20/06/2015.