HOMES OVERSEAS ON CHANNEL 4'S RICHARD & JUDY

Country:  Other Spanish Places, Spain; Spain

25 January 2008

Rupert Bates, editorial director of Homes Overseas, is the regular property expert on Channel 4's Richard & Judy show and yesterday he appeared alongside Richard and Judy and two British homeowners, whose Spanish properties are  threatened with demolition, to highlight the scandal that could affect thousands of Britons who have bought properties in Spain.
"The demolition of Spanish homes owned by British buyers and the Valencia land grab legislation are scandals and the UK Government should intervene. FOREIGN SECRETARY DAVID MILIBAND SHOULD GET ON THE NEXT PLANE TO SPAIN AND DEFEND THE RIGHTS OF THOUSANDS OF BRITISH CITIZENS," said Rupert.

"Spain is not some banana republic, but the UK's number one tourist destination. Many UK property buyers have bought recently in Eastern Europe and other less mature and less transparent overseas property markets, where illegal building is also rife and property law at best untested. Could the same thing happen in a few years time on other coastlines where Britons have bought holiday homes?

Can you imagine the outcry if armed police and bulldozers moved into a London street and demolished properties owned by foreign buyers? The Labour Government probably assumes the UK property owners in Spain affected are wealthy Conservatives with the cheek to invest their money outside Britain, so let them eat paella.

British investment has brought much needed income and prosperity to Southern Spain over the last 30 years. I am very surprised the Spanish authorities have gone ahead with demolition. Surely a precedent has been set and therefore all illegal properties must be demolished which would shatter one of Europe's most popular holiday destinations and a Spanish property market that is already in desperate trouble. Compensation claims and legal battles could run for years in a country not renowned for doing anything in a hurry.

In many cases we are not talking about naïve UK property buyers who left their brains at Malaga airport and bought a property in cash in a bar with no lawyer. A lot of those affected took proper legal advice, bought in good faith and have contributed much to the local economy.

In my view it is more than coincidence that, on the one hand, you have inland land grab and effectively forced new development, while on the coast properties are being demolished.

The Socialist Spanish Government is playing the green card. Undoubtedly properties on the coast have caused huge environmental damage and the coastline urgently needs protection, but demolition is not going to turn back the ecological clock.

For every loser there is a winner. With town councils having to clean up their act, buying a property for sale in Spain now should be safer than it has ever been, with no more flouting of the laws. So it is a good time to take advantage of a lot of distress sales. Property is going cheap but whatever the current problems in Spain it will always remain a good long-term property investment."

Legal Tips when buying in Spain

• Find an English speaking lawyer in Spain, or a UK lawyer with a Spanish office or affiliate, who is a member of the relevant Law Society and covered by professional indemnity insurance. A lawyer recommended by the developer is unlikely to be acting in your best interests.
• Do not sign anything without the lawyer and certainly nothing you don't understand.
• Your lawyer, especially if you are buying an off-plan property, should check the developer has a building license and will offer bank guarantees for stage payments received as your property is built, in case he goes bust before completion.
• Have you got the escritura? The title deed, signed in front of a Spanish notary who is a public official, showing you have clean title to the property; the vendor is the legitimate owner and there are no charges on the property. In Spain any debt on a property transfers (outstanding mortgage payments for example) to the new owner. There are land registry searches, but not nearly as transparent and diligent as the UK.
• You also need a habitation license that confirms that the local council has checked the property complies with planning permission and building regulations.
• The vendor might suggest that you declare that you paid a lower price for the property - an undervaluation - and make the rest up in cash. This means the vendor pays less in capital gains tax. It is widespread, but illegal and when you come to sell you will have to convince your purchaser to break the law too, otherwise you will be hit with a big tax bill.

View the Homes Overseas Guide to Buying Property in Spain