P.G.O.U PLAN

Dear Chimps:

Please have answers below in bold green ( same text as your email):

Thank you Maria

Not sure when the P.G.O.U plan goes through if it  will be a good thing or not for some.

Good if you own an illegal property. ?

Not good if you never intended or cant now complete. ?

Those that have used to reason not to complete until the legals are in place surely now will have to complete or lose deposits

That is unless they have started proceedings for return of deposit ?

Surely this may mean that hundreds of now legal properties will come on the market together  Banks are now not lending so time will tell how this effects prices.

Upwards as the property is now legal .? Downwards due to more over supply .?

This is how I see it ? One thing I suppose that prices may find a level at some point as it seems difficult to get any valuations on developments while they were illegal. No one would buy at almost any price.Or could buy for that matter.

One thing seems certain that once the plan is approved the developers/banks will be looking for the money.

Think whatever its going to be a volitile situation for many.

Dear Chimps:

Thank you.

Please have some comments below in bold green ( same text as your email):

Thank you Maria

Not sure when the P.G.O.U plan goes through if it  will be a good thing or not for some.

Good if you own an illegal property. ? Sure.

Not good if you never intended or cant now complete. ? Posterior legalisation of houses cannot affect retroactively your consumers/contract rights for claims, cancellations, compensations...

Those that have used to reason not to complete until the legals are in place surely now will have to complete or lose deposits.  If they did not act for contract cancellation in the past and once there is a license now, they are called to complete, they are entitled to a good/meaningful price reduction( due to the delay). 

That is unless they have started proceedings for return of deposit ? Correct.

Surely this may mean that hundreds of now legal properties will come on the market together  Banks are now not lending so time will tell how this effects prices.

Upwards as the property is now legal .? yes, but it was not legal for a while, so old prices canno be kept. Old buyers are entitled to prioce reduction and new buyers are now in a totally differen market where prices are much lower. Downwards due to more over supply .? Certainly.

This is how I see it ? One thing I suppose that prices may find a level at some point as it seems difficult to get any valuations on developments while they were illegal. No one would buy at almost any price.Or could buy for that matter.

One thing seems certain that once the plan is approved the developers/banks will be looking for the money.

Think whatever its going to be a volitile situation for many. It is going to be very interesting: extrajudicially and judicially. Let´s see.

Hi Maria:

You wrote:  Those that have used to reason not to complete until the legals are in place surely now will have to complete or lose deposits.  If they did not act for contract cancellation in the past and once there is a license now, they are called to complete, they are entitled to a good/meaningful price reduction( due to the delay

Well, I know from a conversation that I had with someone yesterday who had a meeting(within the last 24 hours) with the agent of the developer of a particular development that they will not contemplate a reduction in purchase price from the original (inflated) 2003 price. The development was supposed to be finished in 2005 ready for occupation, LFO in place.  For this reason, the people that I know of, which is a considerable number, are prepared to walk away from the whole thing.  Why would anyone with half a brain pay 2003/4 prices in this economic climate especially when the development is a long way off the original plan.?  I will pm you more detail:

Tish.

Tish:

I am completely sure a good action  for price reduction due to this long delay will succeed for sure.  I can see developers not agreeing first hand, but they would have to choose between reducing prices or giving the houses to the Bank.

Of course I see very high possibilities of sucess if the action get in Courts. Both contract and consumers Law endorse these rights.

I will be very pleased to look into your email.

Best regards,

Maria L. de Castro

Maria

A meaningful price reduction ? Whow thats going to make things very interesting indeed?

I do think that Tish is right that many will not or be able to complete due to many factors including price and specification promised.  Cant think of many developments that appear to have what it said on the tin.( but still very good however) Some very bad however?

Many cant now get the finance to complete and many never intended to complete at all.

Well when the P.G.O.U Plan is approved then its shake up time.

Some will have legal property that depending on price paid will have variable loss of value say 30% At least they may have completed when the Euro was 1.45 so they are protected somewhat against falls in property value,

400,000 Euros      1.45     £275,000       2004

400,000 Euros      1.15    £347,000        2009       No wonder they will walk away. I would as well.   

One day however the prices will go back up.Might take 3 to 5 years but they will and in particular good areas.

Some have decided not to complete, full stop will now have to walk away.

In almost all cases we are licking our wounds. Depending on the where you were in the cycle and where you choose to get on and off,but in reality thats life.

The company behind the development that I am talking about has an agenda!

Chimps observed " Many cant now get the finance to complete "

What happens legally under this scenario?

Maria observed "Of course I see very high possibilities of sucess if the action get in Courts. Both contract and consumers Law endorse these rights. "

Does this mean that even more cases will come to court and effect their mark upon an already dire situation ( existing massive backlog of cases) Court delays appear to be compromising many who have already won their cases for breach of contract but are struggling for actual return of their monies before the developer goes into administration. Something needs to be done about this maladministration and the need to follow through court judgements swiftly before the whole court system collapses ((fast tracking of outstanding cases) otherwise the situation will only deteriorate further. Can't lawyers put pressure on the justice system to get this addressed? To provide justice at the end of the day........

If monies were released back to originating purchasers more swiftly (true justice) then they could pick and choose from developments where the developer is following through the scenario that Maria suggests. At least this way the purchaser would have free choice in this matter and not be dictated to by developers who are refusing to acknowledge their legal responsibilities.  It's a prime example of the developer yet again trying to call the shots by not paying up where required to do so (true justice), and not being realistic in their asking prices.

Absolutely correct in what you say Ads, especially the point that "YES" more people will be taking court action. 7 that I know of. Not many in the grand scheme of things but still adding to an already huge backlog.  All will be allowable , with just cause as they are actioning proceedings before the new PGOU comes in. October is supposed to be the date!!

Tish Posted

"The company behind the development that I am talking about has an agenda!"

 TELL ME ONE THAT DOESNT ?

Ads !  Another very good point ,one that  I feel may be coming up when the P.G.OOOOO.U Plan is released.

Seems it will be a much different playing field and those like Maria will have her work cut out advising us all.

Somewhere I feel that the E.U will have to step in. After all Spain and the Banks will soon need to answer questions as to why they have to be bailed out..  

The P.G.O U Plan may perhaps light a fuse here ?  Perhaps it may be a line in the sand ?

One thing is for sure that the forums and the media will be reporting some very different series of events.

No finances to complete: according to model contract agreed by developers and consumers back in 2001: a cause for contract cancellation by both sides. Be the first to allegate it and win.

Another related blogpost: http://www.eyeonspain.com/blogs/costaluz/1361/legal-tip-58-contract-re-negotiation-an-alternative-to-judicial-affair.aspx