On a brighter note...............

Hi All,
For the past few weeks i have been in several meetings with both my solicitor and three prominant builders that cover the Costa Blanca and Costa Calida both inland and coastal.
This all started with a conversation between myself and my solicitor regarding the current situation with the construction industry and the global credit crunch,i also put my views across regarding the predominant expat insurgence and with that the financial benefit that we all have offered and continue to offer to the Spanish economy.
Basically i was trying to get the point across that there are a lot of very fed up people out there,not neccesarily with the country but with the system and how it has manifested for them into financial difficulties.
You have to remember that there are very few builders,promoters or lawyers that actually read forums like this.or kmow they exist,plus a lot of them actually blame the fall in exchange rates rather than bad PR for the dowturn in sales,well needless to say it didn't take long to get that point across.
My laweyer suggested we met with three of the areas most long established and reputable builders whom he has worked with over the years and has grown to trust,very wealthy and knowledgable men.
Anyway i will spare you the ins and outs of it all but basically a deal was struck during three meetings with them to help anyone who has suffered at the hands of developers going bust,into administration,no licences issued,Development cancelled and on and on etc etc....
What these companies have agreed to do by binding contract is;
Anyone that has paid a deposit on any development that was cancelled or the builder has gone into liquidation or bankruptcy will be eligible for a discount of 50% of the value of the amount that they have lost, e.g. if you have paid 40,000€ as a deposit to San Jose for instance and do not wish to continue on with the purchase then the discount will be 20,000€,this does not mean you cannot continue to chase your money from the offending builder, but you will have to prove to the new builder by documentation the original deposit paid,if you do get your money back from the original source then it will be a bonus.
Secondly there will be a cash donation to one of 5 chosen Spanish charities which myself and my lawyer are working on at the moment for the sum of 1,000€ for every purchase.
These will be charities close to my heart, Cancer,Animal welfare,underpriviliged children and the butterfly children.
Obviously all properties befoere they are offered have been fully screened and checked for all legalities and documentation but as i say the builders we are collaborating with are time served and have exemplary records.
I know the cynics anongst you will possible think this is a marketing campaign by the builders and myself, and i being the biggest cynic going, see your point,the fact is they dont have to do this with both the discount and the charities,yes hopefully they will sell a few properties but also it does give people a chance to get some money back,after all we are talking about a lot of money that a lot of people have nearly given up on.
We are in the process of creating the website where you get to see the locations and styles of properties plus designate the charity of your choice for the donation.
There has been a lot of work and meetings put into this and more will be done over the next few weeks.
Hopefully we can restore the balance of power and maybe some day the forum will be full of people that have had a good experience.
I know this is pushing the boundaries of a commercial post but i have thought long and hard before posting this,i think the benefit for anyone who can retrieve any part of their savings will outway any financial gain by other parties.
Thanks for listening....................

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Crikey, no response to this thread yet?!
I think it's a brilliant idea, well done Georgia.
If I was one of the many caught up in the building crash and losing money, I would certainly consider this!
Regards,
(edited due to my silly spelling!)

This message was last edited by FibbyUK on 8/20/2008.

This message was last edited by FibbyUK on 8/20/2008.

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Hi Fibby,
Thanks for the comments,i have had quite a few PM's and i will get around to answering them today.
The basics are in place.it's just the website now,it is being worked on at the minute so it shouldn't be too long.
Just to answer a quick question i have had,it odes apply to people that are trying to envoke bank guarantees because they are not happy with the service or are suffering delays........
Watch this space........

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Hi Georgia yes a great idea,some people will be able to keep there dream going,instead of waiting for years and geting no where.As you say if you do get some or all of your money back later its a bonus.Pat.

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Will these new properties be offered at a realistic price (and valuation) that reflects the current market downturn (30% according to some)?...........if not it will defeat the object of applying discounts.
If I understand it correctly what you are suggesting is presumably those who have already been stung by a variety of corrupt practices and are in the throes of potential long and sometimes costly legal battles, with the stress of developers going into bankruptcy at any time in the interim, should re-invest in another Spanish product before regaining any of their original monies? Or perhaps you are encouraging clients to consider writing-off their losses (there appears to be little confidence in regaining monies lost when developers just appeal successful rulings and clients have to go to further litigation to enforce rulings with no guarantee of return of monies should developers become bankrupt.......)

I'm totally confused by this gesture of goodwill........... why pray on those already vulnerable?


Take the example of a property originally valued at say 220,000 euros (back in perhaps 2004) where the client has placed a 40% deposit of 88,000, plus 7% IVA. Then add on the legal costs, say 10,000 euros, to fight the case for breach of contract (where no bank guarantee was made available for whatever reason)......total outgoings and potential loss 104,160 euros (this excludes the legal costs to date for the purchase).

Then by comparison your new product, re-valued at 70% x 220,000, for an equivalent property to reflect today's price = 154,000 euros and deduct the 50% discount x amount lost, 104160 (52,080euros) leaving a new developer's price of 101,920 euros for an equivalent property to the one in litigation. Is this what you were suggesting Georgia? Perhaps not.........
Could you give realistic examples of exactly what is intended here (like for like) to reassure clients that it is not another marketing ploy and that these new properties original asking price truly reflects the downturn in property values even before the special discount dispensation you mention.

Forgive me if I have misunderstood the situation Georgia.

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Hi ads,
I am not sure i understand all of your post but i will try to answer your questions.
The property that is being offered is at the builders list price,Valued by the bank at todays value,After all the bank is the only body that can give any real value againt any property,there is little point a builder inflating a price if the figures don't stack up with the bank.
Beleive me,nobody is trying to pray on anybody here,if people do not like the scheme then thats ok,people are not being forced down this route,it is an option or choice.
I would also imagine thyat anyone who has fallen foul of any property disasater here in Spain has very little vulnerability left and will be considerably more cautious and aware of the pitfalls than in there original purchase.
It is quite a simple equation.
Property List price (With current Bank Valuation) = 200,000€
Original deposit placed = 40,000€
50% Discount Available= 20,000€
Total price of Property = 180,000€
This does not affect the rights of anybody to pursue their refund,which preumably they are doing so anyway.
This is for people that still wish to purchase in Spain obviously,not for people that have beeen put off by their current situation.
If "The some" you mention are bank managers then yes the prices have fallen 30%,if they are purely speculators then i would say theyare guessing.
Could you walk into Barratts homes in the UK and say "A bloke in the pub told me that prices have dropped by 30%,i want a 40% discount" ??
I hope this has helped.

The properties

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Georgia:

I do think that any attempt to reactive economy is necessary. I am sure those lawyers you know will be paying attention to every detail.
I am starting a thread on something related to that.
I wish you wisdom and success.
Maria

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Thanks Georgia.......in your example I see the bottom line was a 10% discount on the builder's list price.
Re kick starting the Spanish economy I understand this completely Maria, but I'm sure you understand that it is just as important for those caught up in litigation cases through no fault of their own, for them to feel reassured that they can reclaim their monies within a realistic timescale at the end of the day, before daring to commit to another purchase.

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Maria,
Thank you for your kind words and encouragement.
Regards
Georgia

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Been away a couple of days and only just seen this. Great idea. Let's hope everyone concerned benefits in some way and a lot of people are helped.

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Hi Ads,
on that example it does work out at 10% but this is not a rule of thumb,it could have just have easily been  25,000€ off a 150,000€ property,making the saving 16.6%.
This is really what makes this different from anything anyone has ever done,its purely based on the loss or potential loss from the previous purchase.
I absolutely agree with you that people should pursue their money and hopefully a large amount of people will be succesfull.
The key here is that the property on offer from the selected developers are all key ready,walk in sit down,legal,there is no promise of this and that and it will be finished in 200?,you can see it,touch it and have the relevant paperwork in your hand.
As Acapulco said in his post this has been created to help.

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Yes I understand the situation now Georgia, but I still think it's necessary to stress to people interested not to depend on return of their monies when making a purchase of this kind, as the litigation process can last many years. I'm wary that many will view this with rose-tinted spectacles and may find themselves in greater debt than they bargained for, in the vein hope of a swift recovery of their monies, especially those who have no legal bank guarantees (through no fault of their own).
I'm also concerned if I'm honest that some lawyers may well shift their attention away from fighting these legal cases to focus on deals such as this........ and in so doing delay return of monies even longer, or more worryingly lose the impetus for the need to change a legal system that has many failings.

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Hi ADS,
I know exactly what you are saying andf it makes total sense.
The whole idea of this scheme is the transparency.
By all means people should continue to fight for their refunds and urge their lawyers to do likewise.
Anyone interested in the sheme should completely seperate the two instances.
For Example; If someone is in a battle with a developer and have either been told it wont be built,has no licence or there is such a delay that they are trying to envoke a bank guarantee but failing,they have two choices,they can continue to fight for their money and if it is returned take it put it in their pocket and say never again.
The othere choice is they can use 50% of the money they are fighting for(although they don't physically have it) and use this as a discount on another property,so in essence they have got half there money back.
If and when they do get the refund from the original developer then in essence they have made 50% profit!!
Although this is not the underlying point of the scheme as it is reliuant on the court system here in Spain it does give people the oppurtunity to stick two fingers up at the establishment and say "we won" and got the property they originally came looking for in the beginning.
I am glad you are posting because it gives me an oppurtunity to have someone to play devils advocate with,i went througfh all the same emotions and a lot of the questions when this was originally thought of.
Don't Forget although this may be a minor point in the proceedings,if ten people take up this scheme it will put 10,000€ in the coffers of a charity here.
I know this seems unusual but this has been created to help everyone.
Regards
Georgia

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In reality Georgia you have to temper any thought of "profit" from this transaction with the fact that the purchaser may not recover their legal costs in the ongoing litigation process, plus as it stands they will be  paying a higher price for the euro at this moment in time and have  to take into account some duplication of purchase legal costs since they will not recoup the legal payment made on the original failed purchase. Then there is also the consideration that if purchasers are relying on rental income to assist the financing of their purchase in the longer run, that rental appreciation as it stands now appears much lower due to the over supply of property in the market place. These are all necessary factors to take into account and why I queried the initial list price (and valuation) of the 2nd property, as surely this needs to reflect the reality of true market conditions and should not be propped up by apparent  over-valuing by the banks.
Don't get me wrong I do admire any initiative that helps in this situation Georgia, but I suspect that the developer will have to take all of these factors into account and reflect them in a more realistic list price if they expect people caught up in this situation to seriously consider a re-investment. I understand that you are suggesting that discounts are being offered to offset this to a degree but the last thing purchasers need is to find themselves in negative equity where they have purchased at an over-inflated price.
I would have hoped that as an alternative solution to this mess that pressure be brought to bear on the legal system to immediately lawfully reimburse purchasers with their monies swiftly , which inturn will allow them to re-invest in the full knowledge that they can afford to do so, not under a false assumption that they "might " recoup their monies. That procedures be put in place to ensure that developers cannot string out the legal process by going to appeal (playing the legal game) and then the purchaser having to suffer even further delays before an enforcement order can be placed..........and  during the whole of this process worrying that the developer in the interim may declare bankruptcy. It's a legal nonsense that needs to be sorted as soon as possible.
I do admire also any initiative that makes the purchase process transparent Georgia and for this you should be thanked, but please don't under-estimate the vulnerability that these purchasers are going through at this moment in time. The vulnerability doesn't disappear it just grows!

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Hi ADS,
This scheme is predominantly aimed at people that wanted to live in Spain and have had their dreams dashed.
It is not aimed at Investors at all,there is no definitely no guarantee of any rental to pay the mortgage,no promise of capital growth,yield,etc etc...
I have absolutely no control of the legal system that is involved with refunding peoples deposits,i will leave that to the lawyers and courts.
What this offers is a way forward IF people wish to take it.
People should go into this with their eyes wide open so that educated decisions can be made.
The builders list prices will reflect the current market value,beleive me, you will find it very hard to find a bank at the minute that will over value,they under value if anything as they have been so badly bitten.
I know its not for everyone but if it helps a small percentage then it has achieved what it set out to.
Regards
Georgia

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I have been reading this thread with interest.
It's good to bounce these ideas back & forth.
I look forward to the launch of the website, to see what is on offer and the property prices involved.
Until we have the facts on our screens and can judge them properly, I still think the concept is good.
It will be up to those unfortunates who have lost deposits etc., to decide on this new venture.
I hope it works, it sounds very promising and the fact that charities will benefit out of the builder's pocket, is great.
Kind regards,

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Hi Fibby,
The website should be online by the middle of september,it would have been sooner but the holidays here have put paid to that.
Just  on the point of negative equity,if you do get a 15% discount for example and the average mortgage being given at the moment being 60% LTV then you will be well clear.
Hope you have a good meeting with the ladies.....
Regards
Georgia

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The concept should hopefully work so long as all the facts are presented as we have discussed between us Georgia. I'm grateful for your honesty and plain speaking on this.
This package appears to be aimed at a specific client group who as you say are looking purely for lifestyle change rather than investment, have faith in their 2nd purchase through the transparency that you have identified, but without reliance upon return of monies from their ongoing litigation or potential rental income. I just wonder how many fall into that privileged group of people who can afford to proceed with  a property that is now costing them 16% more due to the strong euro (the pound down from 1.50 to 1.26) , increased mortgage rates should they require finance,  and without 50% return of their hard-earned monies. I bow to your knowledge re the Banks valuations and hope you don't mind me playing devil's advocate here.
All I have wanted from these discussions is to rid the market place of any potential false and unrealistic promises to those who have already been badly affected by  events to date..... I trust that you appreciate my motives here.
Good luck with your endeavours Georgia.

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Hi ADS,
I actually really appreciate your questions.
I would imagine it is only what others have been thinking anyway.
Thanks for your best wishes and i do understand where you are coming from with your questions.
Regards
Georgia

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Website is due to be finished at last,ready for release on the 27th ish.....bl***dy web designers anyone woulkd think they were trying to split the atom or something....will be worth it in the end....

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