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Avoiding Geoff's mistakes when buying a Spanish property |
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One of the things about buying property abroad is that you tend to make assumptions based upon your current experience. And because for most people, the only experience of buying property they have is of buying property in the UK, this can sometimes be dangerous. To illustrate what we mean, let’s introduce you to a gentleman called Geoff. Geoff didn’t buy his property through us – although he now wishes he had! Geoff went to see a property under his own steam on a golf development. He went into the sales office and was shown around by an enthusiastic young man who explained all there was to know about the place. From Geoff’s point of view, it seemed like just what he was looking for and so put down his 6,000 Euro deposit. A month later, he had to pay his next instalment of 100,000 Euros. So far, so good. The build of his town house was nearly complete and Geoff expected to take possession early the next year. A month or two prior to completion he got a message to say that the promoter-developer of this development had gone into liquidation! After the initial shock and some hurried calls to a friend who already owned a Spanish property, Geoff was relieved to be reminded by his friend that Spanish law says that all new developments have to be covered by a bank guarantee… so, although it might take a while, at least he could get his money back. Sorry Geoff – you didn’t check, did you? While the law says that all new developments have to be covered by a bank guarantee, this one wasn’t. How come? Well, the promoter, and in this case the same company - the developer - wasn’t borrowing any money from the bank and therefore, in his (ill-informed, arrogant, illegal...) view he didn’t "need" a bank guarantee. When he started the project he had sufficient funds for his projected cash requirements… but then something went wrong and available cash became the issue. But if Geoff had bought via us, this wouldn’t have happened. Why? Because before any property is listed in our database a check will have been performed to ensure the existence of the required bank guarantee. But surely Geoff’s solicitor would have done this? Oh, that was Geoff’s second mistake – he was using a UK solicitor who wasn’t particularly conversant with the Spanish system. We could go on to tell you about Kay, and Brian and Tony and Vanessa and many more, too – all of whom discovered nasty things about their properties after they had committed themselves. Unfortunately for them, none of them bought via us and so couldn’t take advantage of a number of checks we routinely carry out on a client’s behalf. So here’s a partial list of what you can routinely expect…
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