A British couple who had purchased an apartment in the Los Lagos de Santa Maria Golf development in Marbella have been awarded a 227,000 Euro refund by a Malaga Court Judge. Unwittingly, the couple had become victims of a property scam, having bought an apartment in a development that did not have planning permission. The judge decreed that Banco Popular had to make the refund.
As many foreign buyers have discovered far too late, buying a Spanish dream home can all too easily turn into a nightmare, if one doesn't hire a competent and reputable lawyer to deal with conveyancing. The unnamed couple had transferred a deposit for the department to Montaldo's account before the off-plan property had been constructed in 2003. Three years went by, and when the couple arrived to sign the deeds, they discovered that their apartment could not be completed because it did not have planning permission.
In this instance, Bank Popular had hosted the account of fraudster developer Giovanni Piero Montaldo, a man later convicted of bribing officials as part of the enormous Malaya Case. The British couple's lawyers cited “Ley 57” as the basis for their case, which protects buyers in the event a developer does not complete a project and the purchased property is not delivered as per contract. Meanwhile, Banco Popular are pondering, if they should appeal the Malaga court judge's ruling.
The fraud came to light as Marbella's interim caretaker government looked into the widespread corruption surrounding planning permission during the reign of Jesus Gil, Marbella's disgraced former town mayor.
As one door opens for justice, another closes for expat buyers
Spain's property market is still suffering from far too many scandals concerning illegal planning permissions and other illegal practices perpetrated by Spanish officials during one of the most widespread corruption cases ever recorded in history. As a result Spanish property, especially repossessions, are still sold for 15% to 20% under market value; this is unlikely to change any time soon, especially in parts of Spain, where expat buyers have been unsuccessful to recoup their losses through the courts.
Headlines over lost compensation continue to dampen enthusiasm among foreign buyers.While one British couple can finally draw a line under their Marbella property nightmare, in Almeria expat campaigners were outraged at a “scandalous” ruling that has cost them 9 million Euros in lost deposits for properties that were never built.
A recent court ruling decreed that foreign buyers who had paid millions of euros worth in deposits for properties that were supposed to have been built at Los Cabreras resort in Zurgena, Almeria, would not be compensated, even though planning chief Carlos Berbel was suspended from public duty for three years for permitting 94 houses to be built on protected land.
The judge's baffling ruling decreed that “Berbel's crime does not correspond to any right to claim compensation”.
Maura Hillan, president of AUAN, the expat housing pressure group, condemned the ruling as “scandalous”, saying in an interview with The Olive Press that it constituted a “complete scandal”.
“If the law allows good-faith buyers to lose €9 million in an urbanization deemed illegal, then the law is effectively saying that the victims are to blame,” she said, adding that the “ruling sends out a message that principles of responsibility have no place in public administration.”
She warned that the ruling “sends out a message that Spain is a land of zero accountability and that buyers have no protection in Spain.”
Unfortunately, many foreign buyers try to save money on overall buying costs by cutting corners, such as signing vital documents “blind”, because said documents have not been translated from Spanish into their mother tongue, or they don't hire a lawyer at all, believing the advice of their “reputable” estate agent – only to discover later that this was advice from an unscrupulous source in league with the fraudster developer.
Despite the property scandal being widely publicised, there are still numerous horror stories surfacing every so often, where both seller and buyer were tricked into conducting their housing transactions without hiring a lawyer. In almost all cases, seller and buyer discover there is no redress in the eyes of the law and thus no compensation. For example, if a vendor sells a property to a cash buyer, but receives counterfeited banknotes for the purchase during the meeting with the Notary Public, there is no legal recourse.
Reputable estate agents will urge their vendors and buyers to hire the services of an experienced property lawyer, a law firm with a proven track record of conveyancing!