Interesting article:-

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Tuesday, May 12 2009 @ 01:18 AM NZST

Spanish Property Scandal Petition

Posted on February 4, 2009 by Spanish Property News
Filed Under Problems |

A Petition to the British Prime Minister is being compiled on behalf of British people who are victims of the well-publicized Spanish property scandals and abuses. Petitioners ask Mr Brown to voice his disdain, address the Spanish Prime Minister directly, and support a call to the EU for Sanctions on the Kingdom of Spain until these abuses are stopped and justice is delivered. This Petition will also be presented to the European Parliament, pressing for EU intervention.

The Petition highlights an alleged triangle of corruption involving developers, real estate agents, and in particular lawyers who have not given their clients the correct legal representation. Many have purchased property in Spain without being protected by a Bank Guarantee, the Law in Spain since 1968. Those who do have this ‘protection’ find that Banks in Spain are not honouring these legally-binding Guarantees, which leaves them with no choice but to take expensive litigation over many years in an attempt to get their money back. Many Petitioners are eager to sue their original lawyers for collusion and negligence, but cannot find a lawyer in Spain who will enable this action.

Thousands of illegal properties are now being brought into new Town Plans (PGOUs). Judges are ruling in favour of some developers, leaving the off-plan purchaser who refused to complete on an illegal property years ago without redress and facing many thousands of Euros in legal fees, including those of the developer. Some of these developers have previously been charged with bribery involving back-handed payments to Town Hall officials, to build on greenbelt or ‘rustic’ land.

To date, 75% of Petitioners have paid deposits totalling 13.2 Million Euros for properties that are now classified as illegal, or not even built many years later. 24% of Petitioners have discovered that they have completed on illegal properties. These properties cannot be re-sold and face possible demolition. For these owners their homes are now worthless, as it is illegal to live in a property in Spain without a Habitation Licence.

Suzanne Wyatt, compiler of this Petition, says “The figures quoted are, I believe, just the tip of the iceberg. Many of us feel like powerless hostages, while criminal actions are being legalized. Developers who have built illegally have repeatedly postponed court cases, and been allowed to Appeal on Judgements against them, when they have clearly broken their own Spanish Laws. They are being given far too much lenience by the Spanish Judicial system, deliberately causing as long a delay as possible within the courts, until they are eventually granted Habitation Licences for said properties. EU Laws have undoubtedly been breached, and we believe that EU Sanctions are now the only way to force the Kingdom of Spain to clear up this mess, deliver justice, and restore the well-known British love and respect for Spain and her people”.

Supportive signatures and personal experiences are encouraged via a dedicated website: www.spanishpropertyscandalpetition.co.uk

 I think that Suzanne has already handed in the petition at 10 Downing Street, in fact her picture was in the papers recently as she did this.

Let's hope it leads to something positive.

Maybe if Suzanne sees this she can update us on latest on the petition.

Justin

Re: Interesting Article

I hardly think Gordon Brown or any of his Corrupt Cronies or any other British Politician are in a position at the moment with their record to put pressure on any other country. That also includes th EU Gravy Train that you seem to think will help?

Many of us bought in Spain without being ripped off, by anyone. We are happy living here even though  for a lot of people it is a bit of a struggle. Some of us that live on UK pensions have seen oiur incomes drop by one third. What we do not need are any sanctions being put on the country we have chosen to live in that could make life less enjoyable. 

Whilst I sympathise with anyone who has lost their money, a lot were ripped off by their fellow countrymen, and were very nieive when entering into the purchasing of their property. 

F

I'm alright Jack eh falklands? I think you were just lucky. I certainly didn't expect to get ripped off by ATLAS INTERNATIONAL!!!!!!!!

All of us here living on a UK pension have lost a third of our income as well as getting ripped off.

Before than anything else I think that a better title of this thread would be ".......stolen by corrupt Spaniards" as the whole country cannot be blamed of behaviour of some dozens. Spain is a welcoming country and there are many spaniards with high standars of honesty and proffessionalism, fighting for   a right way to conduct profession and business.

Suzanne is very  brave , is working so hard! and deserves much encouragement and support as I am fully aware she has been feeling alone sometimes in this challenging fight.

My encouragement to Suzanne.

I am very open to say what I think which is that if lawyers had been independent and caring for their clients interests avoiding any conflict of interests as it is required by basic understanding of ethical behaviour and  by our deontological code.... many disasters would have not happened.

Let´s keep moving ahead for transparency .....

Have to agree with Maria, just as easy to get ripped of in the UK as in Spain, that said do also feel that Spain needs to tighten up on a lot ofproperty related laws, cant tar all with the same brush

Falklands ,

I also believe that  you have just been lucky  this has nothing to do with naivety or ignorance. that would suggest that you were less naive and  /or smarter than all those  who have  lost  money and I doubt that is the case . You do not have the right to call those who have lost money naive . I have lost money and I can assure you I am not naive . As for EU sanctions if Spain wants to be in the EU and benefit from subsidies it must abide by the rules not blatantly flaunt them and refuse other EU citizens proper recourse in  the courts. 

You are very foolishly and selfishly over simplifying a very complex problem .Perhaps if you were not so selfish and judgemental of others you could see that what you should be thinking  is  " there for the grace of God go I  "

On Maria's point I do not blame the Spanish people  for what has happened ,but would have far more respect if the powers that be would  act now and stand by their own laws and enforce them .It seems to me they are not interested in doing what is right .

So many points raised in this thread, it's hard to know where to start.

The EU's threat of imposing sanctions on Spain is now the final resort, having received petitions over many years regarding property scandals in Spain, and is a step not taken lightly.  In spite of the clear facts, the majority of Spanish MEPs continue to be in denial as to the corruption and fraud that has been blatant and affected many thousands, including Spanish people.  Their rejection of the Auken Report proves this also.  Almost every day there is news of more arrests; just a few days ago deputies in the Partido Popular were arrested  - and real estate is nearly always involved.  

Whether the victims have been 'naive' or whether they are highly intelligent, savvy people is irrelevant.  There are Laws in place that should have protected many, eg bank guarantees.  But until these Laws are abided by (including European Laws) nothing will change for the better.  Anyone who believes in justice for the thousands of us with these problems, should be supportive of the role of the EU in this mess, as it seems to be the only hope for many now.

Our Petition is with the EU in Brussels & I'm updating them with new signatures and comments, and further information that is coming in daily.  By the way, the figure of 13.2M Euros in the press release I issued (quoted by Alamred) is just the tip of the iceberg.  At the time of writing it represented a proportion of petitioners, but hundreds of millions of Euros are involved in total.

I'm currently trying to get to David Cameron/William Hague, present Our Petition to them, and press for them to address our problems in the House of Commons.  This is way overdue & we need more political pressure from the British Government.  Trying to get the British press more involved has been time-consuming & mostly fruitless.  This is probably because of the vast amounts of money they have made from the REAs advertisements in their papers.

Maria - Many thanks for the encouragment & support.  I agree with you completely.  The lawyers who had a hand in these abuses should be made accountable - they are the very people who had the power to expose the corruption - or at least say one word to their clients - "NO".

www.spanishpropertyscandalpetition.co.uk

In this months Place in the Sun the British Amdassor to Sapin is quoted. Why not involve her.

Also remember REA's are often lied to by developers, in fact San jose forged planning licences for early buyers as maggic Meg will know,

So how can anyone trust anything coming out of this corrupt society, I agree it has to go far higher, as stated the best threat is to take away the grant and drive Spain back to the 70's.

That would make them sit up

Alamred - In our petition to the EU I have made as polite a mention of the British Ambassador to Spain as possible, as follows:

On 23 March 2009 the British Ambassador to Spain, was interviewed on the BBC. Some of her comments are worrying, as they mirror those of the very people who refuse us justice; to quote her own words: "Spain is a big and complex country and different regions have different legislation, so if you go and live in Valencia different rules may apply from if you go and live in Murcia".  

Whatever the region in Spain, whoever the Mayor, or political persuasion, every region must be bound by EU Rules & Treaties, & the Human Rights Act.'

The main law  applying to off-plan purchases is National: Law 57/68.

Suzanne: Did you get a response from the Law Society in the UK? Are they talking to their equals in Spain?

There are in Spain dozens of excellent, committed lawyers. ... I assure you. We need to keep bringing values to the proffession. As a matter of auto-respect and dignity, deep understanding of our mission in society.

Have a great day!

Maria

Sorry but just have to add my disgust at the ignorant comment made by falklands, who can't even spell naive!

People whilst not "knowing" or having any communication with Falklands at all his/her posting had one sentence in it that seemed to set all off, the rest of it is of a sadly reasonable content!

Interesting article written by a Spanish Journalist from El Pais.  How long will it take before the Spanish Politicians react to this unacceptable situation and start taking action against the corruption that is widespread in the Spanish real estate and construction sector? 

Land grab

RAFAEL ARGULLOL

I would make the report required reading in schools, and for any candi­date to public office. Why so much en­thusiasm, you ask, over this document which contains the usual leaden prose of EU texts? And the answer is that it constitutes a sort of mirror that reflects the abjectness so sordidly embedded in our public life.

What first catches one’s eye is the conspiracy of silence on the matter, and the shameful alliance between Spanish euro-deputies of both the Socialist and Popular parties in rejecting the Auken report — which was, however, approved by the European Parliament last month by 349 votes to 110, with 114 absten­tions. This clear majority was opposed to the end by the Spanish deputies.

After reading the report I feel no sur­prise at this conspiracy of silence, be­cause so many people are exposed in it that you can hardly understand how so huge a scandal could have been swept under the rug for decades. Spain having thus been severely condemned for the impunity of corruption, the national and regional parliaments in Spain have had nothing to say about the matter, and have continued to look the other way.

Personally, the most repugnant feel­ing the report gives me is that the pillag­ing, the systematic devastation of the Spanish coast and other natural areas — a devastation that will affect genera­ tions — has occurred under democracy and not under the Franco regime. The conclusion is that our democracy is so weak as to allow the existence of an anti- democracy that calls into question much of the progress we have supposed­ly made.

This disturbing idea emerges from stories whose common denominator is greed, a mafia-like conception of politics and a sense of impunity which is all the more irritating the more shamelessly it is asserted. The regional government of Valencia, run by the Popular Party, and that of Andalusia, run by the Socialists, are apportioned equal blame. There are even a few comic passages, such as the traps laid by municipal officials to im­pede the work of the investigators from Brussels and the angry protests by yokel mayors complaining about these Com­mission people sticking their Nordic nos­es into local business.

As we face the wall of cement along our coast, the worst thing is that we already knew all this. It has happened before our very eyes. It was enough to look at the absurdly soaring housing prices, often portrayed as a sign of our collective progress, to perceive that something sick was cooking.

True, at the head of the procession were politicos, speculators and crooks of various ilks, but who went behind them? What did the judges do? Little, says Auken, and so slowly that it was like doing nothing at all. Nor did the public put up any resistance.

Thus ends the horror story vividly narrated with Nordic ingenuousness by Auken — a story of pillage and depreda­tion of what belonged to our future. There is little to add to the picture which, in large part, explains why the economic crash is now hitting Spain more heavily than other countries. Though it might be added that this pil­lage would never have been possible without a parallel pillage — what we often prefer to call “lack of values,” the “nouveau riche syndrome” and the like.

Many thanks, Ms Auken, for the pret­ty picture of ourselves.

Come on policiticans and bureacrats worldwide serve one master-and its not any of those in their constituency!

Lets face it they are self governed and are looking after themselves which realistically is what we all do however they really do end to take the ****!

Has anything happened about the petition?

In response to Legal Tip 187 - Banks Breached Law 57/68 - posted on 1 December 2009 by Maria de Castro, I would comment as follows:

Below are the relevant Articles of LEY 57/68, firstly in Spanish and then in English.

A very important sentence appears in the Second Article:

"Para la apertura de estas cuentas o depositos la Entidad bancaria o Caja de Ahorros, bajo su responsabilidad, exigira la garantia a que se refiere la condicion anterior."

Which translates in English to:

"For the opening of these accounts or deposits the Banking institution or Savings bank, under its responsibility, will demand the guarantee to which the previous condition refers."

So the Bank or Savings Bank, under its responsibility must demand the guarantee to which condition 1.1 refers.

This puts a clear liability on the Bank or Savings Bank to ensure that the legally required Bank Guarantees are issued.

Also article 1.2 states that:

"Depositing the sums advanced by purchasers through a Bank or Savings Bank, which must be deposited in Special Account, with separation from any other funds belonging to the promoter"

Therefore if Banks or Savings Banks have been accepting sums advanced by purchasers clearly referenced as deposits for off-plan purchases into accounts which are not classed as 'Special Accounts' (Cuenta Especial), as required by LEY 57/68 Article 1.2, then the Bank or Savings Bank is liable to refund those amounts to the buyers if with a minimum level of due diligence they would have realised that the said funds were deposits for off-plan purchases.

Banks in Spain are regulated by the Banco de Espana and must incorporate strict financial controls to prevent money laundering and fraud. These controls together with their own due diligence must result in the Bank or Savings Bank having a clear understanding that the funds were for off plan purchases and therefore subject to the legal requirements of LEY 57/68.

Immediately a Bank or Savings Bank becomes aware that a developer/promotor who it is funding, is instructing purchasers to deposit funds for off-plan purchases into accounts which do not comply with LEY 57/68 Article 1.2, then the Bank has a duty to freeze those funds and demand they be transferred into a Special Account and to issue the corresponding Bank Guarantees immediately or to return those funds to the purchaser.

As Maria says under LEY 57/68 the Banks were established as the 'guardians of legality' and must therefore be held responsible if they fail in this very important and legal duty.

LEY 57/68 - Article 1.1 and 1.2

Primera - Garantizar la devolucion de las cantidades entregadas mas el seis por ciento de interes anual, mediante contrato de seguro otorgado con Entidad aseguradora inscrita y autorizada en el Registro de la Subdireccion General de Seguros o por aval solidario prestado por Entidad inscrita en el Registro de Bancos y Banqueros, o Caja de Ahorros, para el caso de que la construccion no se inicie o no llegue a buen fin por cualquier causa en el plazo convenido.

Segunda - Percibir las cantidades anticipadas por los adquirentes a traves de una Entidad bancaria o Caja de Ahorros, en las que habran de depositarse en cuenta especial, con separacion de cualquier otra clase de fondos pertenecientes al promotor y de las que unicamente podra disponer para las atenciones derivadas de la construccion de las viviendas. Para la apertura de estas cuentas o depositos la Entidad bancaria o Caja de Ahorros, bajo su responsabilidad, exigira la garantia a que se refiere la condicion anterior.

First - To ensure the return of the payments made plus six percent annual interest, by means of Contract of Insurance granted with an Insurance Entity inscribed and authorized in the Record of the General Sub-department of Insurers or by means of a Bank Guarantee issued by an Entity inscribed in the Record of Banks and Bankers or Savings Banks, if the construction does not commence or complete for any reason by the agreed deadline.

Second - Depositing the sums advanced by purchasers through a Bank or Savings Bank, which must be deposited in Special Account, with separation from any other funds belonging to the promoter, which may only contain funds deposited for the construction of dwellings. For the opening of these accounts or deposits the Banking institution or Savings bank, under its responsibility, will demand the guarantee to which the previous condition refers.

The Banks must now be forced to accept their legal obligations under LEY 57/68.

Kind regards

Keith
 

Keith this is all very well but most agents or the "independent " lawyers they recommended were  negligent and did not act in the best interest of their clients as they  paid the deposits and staged payments straight to the developer's account not direct to the banks .Therefore there is often no trace of the deposit or what it was  within the bank system   . How can the banks then be held accountable if the developer did not disclose theses amounts as off plan deposits

 The agents and the lawyers they pretended were acting in our interest are to blame but I for one am not going down this road it is pointless as in most countries in the world the law is an ass and corruption is the winner. Sad but true .

Hi Magicmeg

I understand and share your frustration and although I have not read all your postings on Eye on Spain I can see that you, like myself and my group, must have been a victim of one of the corrupt developers and banks.

Of course many of the Lawyers were recommended by the developers and the agents and therefore were not acting in the best interests of the purchaser.  As a large amount of their business was generated by the developer and agent it was in their short term interest to take the side of the hand that feeds.  Any Lawyer who was not independent and did not act in the best interests of their client (the purchaser) for whatever reason should now be held accountable.

You say most purchasers paid the deposits and stage payments straight to the developers "account"............Yes I agree but the "account" must have been held in a bank, which under most circumstances would be the bank funding the developer and the project.  On their bank transfer most purchasers would include a 'message to the beneficiary' such as 'Deposit from Magicmeg for plot 123 at Ocean View Development' - just an example.  So the bank who probably has millions of Euros invested in the development would be monitoring the developers bank account very closely.  Therefore, with miminum due diligence they would realise that the transfer that has been received and mentions 'deposit for plot 123' was for an off plan purchase.  The bank is then liable for those funds under LEY 57/68 and must be held accountable.

Some purchasers may have sent their deposit payments via a third party, for example, their Lawyer or Agent.  The third party is then liable for those funds as they know without any doubt that they are deposits for an off-plan property.  If the third party then sent those funds to the developers bank account and failed to obtain the legally required bank guarantees then the third party is liable under their legal indemnity insurance.  In a perfect world the third party would be forced to refund the purchaser and then make a claim themselves to the bank who received the funds and failed to issue the legally required Bank Guarantee.  I realise that this would be a very difficult road to take...........but could be possible with the right legal team on your side.

I share your frustration and anger and of course I am on your side.  I realise that there is a long fight ahead for all of us who are innocent victims of this illegal activity and corruption.  But it only takes one purchaser or one group to win a case against the Banks or Third Parties (Lawyers/Agents etc.) and that will set a precedent in Spanish Law.

It is sad that corruption maybe the winner 99 times out of 100.  But it is that 1 out of 100 that can make all the difference.

Kind regards

Keith
FINCA PARCS ACTION GROUP

Email:  fpag@btinternet.com 

Hi

I would like to encourage anyone reading Keith's post below who is at risk of losing money on Finca Parcs to support the action being planned by the Finca Parks Action Group.

Keith has worked tirelessly for nearly 3 years now to expose the corruption that has taken place in respect of this development. He has accumulated a mountain of facts and documentary evidence that can be used as evidence against both the developer and the bank which funded this development.

The momentum for action to expose and bring to book, unscrupulous Spanish developers and bankers who brazenly disregard the law, is building as more and more evidence of their dubious business practices emerges by the day. 

It is totally unacceptable that  the kind of dishonest and unethical business practices to which many investors in Finca Parcs and countless other Spanish developments have been subjected, are still tolerated within an EU member state.

The struggle for justice in this and other similar cases will not be easy or straightforward. What is required is for concerted and relentless group action, backed by professional legal expertise, to challenge the developers and banks in the Spanish courts. We must NOT give up until we win! 

In addition, we need to be proactive in taking steps to influence public perceptions through the media, about the risks of doing business in Spain, which from my experience, is a country easily on a par with Nigeria in the corruption stakes! In particular we need to identify the major offenders from amongst the ranks of developers and banks and ensure that they are placed on a 'blacklist' and that this list is widely publicised throughout Europe. This 'offenders register' would be an effective tool for warning potential buyers about who not to do business with in Spain.

This will eventually shame the Spanish government and cause them to take decisive action to bring their archaic regulatory processes into line with the rest of civilised Europe and to impose control over the dishonest developers and banks who have done so much in recent years, to damage the reputation of the Spanish property market. 

Please get in touch with Keith or myself, if you feel passionate about this issue and if you wish to actively support action to make a difference.