Legal house on "suelo no urbanizable"

Hi There,

We recently found a property we want to purchase in the Els Poblets area near Denia. We agreed a good price and moved forward with a pre contract with the sellers. Our lawyer confirmed all the legal paperwork was correct and we paid a large 10% deposit.

We received the valuation this week and the bank valuation is much much lower than the sale price we agreed. The land apparently is classified as “suelo no urbanizable” and as such the bank will only value the land at a very low figure, €12 a m2.

We are upset at our lawyer as there was no advice given on this and also no clause in the contract for if we did not obtain a mortgage.

Therefore we either risk losing the deposit, which is a large amount of money for us, or we have to find the shortfall of the money to purchase the property, which is a huge amount of cash.

We understand that if we come to sell in the future this may cause problems for other people who need a mortgage, but we cant afford to lose the deposit and do plan to live in the house for a long time?

• Is this something that happens a lot?
• Are there any dangers of buying a house, which apparently is all legal, on rustic land?
• Any advice would be greatly appreciated, we are feeling very cheated at the moment by the “professionals” we trusted!

Thank you all for any help in advance.

Hello Nigel and welcome to EOS

You like many have come to Spain with your UK head on and been stitched up by everyone involved. You are not the first and certainly won’t be the last.

How much is this large 10% deposit? Did you pay by credit card? Why did you pay anything in a desperate sellers market?

You could make a HOJAS DE RECLAMACIONES (CUSTOMER COMPLAINT FORMS) against your professional Spanish lawyer. Was he/she also lawyer for the seller and big mates with the estate agent?

Found a few details which may help....

https://www.spanishpropertyinsight.com/2018/03/09/how-to-file-a-complaint-against-a-lawyer-in-spain/

https://www.spanishsolutions.net/blog/businesses-in-spain/hojas-de-reclamaciones-customer-complaint-forms/

https://www.eyeonspain.com/blogs/SpainMoneySaving/18578/does-the-complaints-book-work-in-spain.aspx

Question for Johnzx

Can this complaint route be used against a Spanish lawyer?

According to the UK Govt website however...

https://www.gov.uk/guidance/how-to-buy-property-in-spain#history

“Complaints against the legal system

If you believe your lawyer has been negligent and has not met their obligations, you should first complain to the provincial bar association. If their response is unsatisfactory, you can take your complaint to the regional and then national bar associations.

Complaints should be in writing and in Spanish.

See a list of the bar associations around Spain on the General Council of Spanish Lawyerswebsite.

If you have a complaint about the way a court has handled your case, contact the General Council of the Judiciary.

If you have a complaint against a notary or gestor administrativo, contact the professional council of which they are a member.”

If you have little ability to speak or comprehend Spanish then assistance from Citizens Advice may be of use.

https://www.citizensadvice.org.es/faq/colegio-de-abogadosthe-college-lawyers/

Thanks for your quick replies.

I am aware of the process to claim against the lawyer but at this stage am not sure we are there yet, we still have some time before closing to figure this out.

My issue at the moment is not that I feel we have been stitched up, more that we are in limbo, in that the property is legal   But the bank just undervalues it. Surely we can’t be the first to have this happen so I am more intrigued to know peoples experiences of having a legal property on land classed as rustic and any problems this may pose.

Our lawyer came recommended by friends (an uncomfortable situation now) and has not ties we are aware of to the vendor or selling agent.

Thanks again for the replies, we are looking for as much advice as we can.

The bank is quite entitled to have its own lending and valuation policies whether you like them or agree with them. Good professional advice should have forewarned you of the situation. To hand over a unconditional 10% deposit whilst relying on a ‘maybe’ bank mortgage was not wise.

Kavanagh, thanks again for responding. The deposit we paid was according to all the advice we had read, it was only paid once we received confirmation all was legal. I have not seen anything online or heard anything from anyone on the situation where there is a legal property on rural land and hence we had no way of knowing the bank would undervalue this. I realize this should have been the responsibility of our lawyer but at this point it does not change the situation. I would love to hear any advice you have moving forward on potential issues with a legal property on Rural land???

Nigel, surely it must have been obvious to you that you needed a satisfactory bank valuation and mortgage offer to complete the purchase, why did you not include that in the contract?

I am not sure what magical answer you are seeking to having agreed to buy a legal property on Rural land that is worth much less than you have unconditionally offered.

Did you actually inform your Spanish lawyer you were relying on a bank mortgage before paying the deposit and signing the contract?

How much was the deposit? And what’s the difference in value?

Likelihood there is no moving forward, only backwards which will cost you.

These were the forewarnings back in 2014

https://www.spanishpropertyinsight.com/2014/08/08/buy-rural-property-spain-2/

Perhaps best to check what has changed since then in terms of changes in regional law relevant to your property.

Also your lawyer allowing you to place a deposit prior to performing a valuation appears highly questionable.

Good post ads. I am not sure we are getting the whole story here.

ads, thanks you forwarding on that link, I have read it and it has many good points.

What i do not seem to find any infomation on anywhere is the situation where a proeprty is fully legalized on rural land. We now unfortunately understand that the value by the bank will be much lower, but are there any other risks involved. If the property has all the correct legal documentation, is connected to utilites and has no issues from the town hall can there be any other problems I am missing that could cause future issues.

I realize this is not an ideal situation, far from it, but as it stands if the property is legal, and we can live in it we are happy to do so, I am just trying to check there are no other implications we are missing.

Kavanagh, I again thank you for your quick responses. However I do wonder what your purpose is here. I am writing on this forum as we clearly are in a far from ideal situation. We took independednt advice and where led to believe we had done everything right. From what we were told signing the 10% deposit on the contract was the norm and the bank had approved us for the money we wanted. Clearly if we knew the land would be valued so low we wouldnt have done this, but no one explained this and this is the situation we are in.

I assume you have some good knowledge to add, but can I ask that you refrain from making us feel like we have done somethign wrong and being overly negative about what has happened. We cant change the situation we are in, believe me I wish we could, so I am tryign to manage it the best I can and would appreciate any helpful advice we can get.

This is the whole story, I am not hiding anything.

‘’This is the whole story, I am not hiding anything.’’

Did you actually inform your Spanish lawyer you were relying on a bank mortgage before paying the deposit and signing the contract?

How much was the deposit? And what’s the difference in value?

Your first priority is to establish who is at fault and liable for the position you are in. Can it all be undone or was it of your own making? Once that is established we can think of moving on to give you legal advice on an unknown property without any documentary information.