Spanish government assists with new measures to safeguard expat property investments

Fecha Publicación: 
28 Julio 2011

As part of Spain's attempts to improve its tarnished real estate reputation and boost its withered economy, it is offering property owners and investors greater access to property information in English while introducing a decree that will 'protect and prevent future problems'.

The Telegraph | Reportaje

Ever since the Spanish property boom, Spain has been dogged by horror stories of expats buying property in good faith yet falling foul of Spanish planning laws and unscrupulous developers.

Under new measures, expat investors will now able to request a Land Registry certificate in English at a cost of £29 from their local Spanish town halls.

In doing so, they will be able to see whether there are or have been any legal proceedings against the property, such as proceedings which may result in fines or demolition.

It is hoped that this development will reduce expat investors' reliance on solicitors and allow them to take charge of the due diligence checks.

If town halls fail to provide this information they will be held responsible for economic damages affecting third parties who bought in good faith.

HM Ambassador to Spain, Giles Paxman, said: “I welcome these initiatives. Communicating essential information in English, combined with the measures announced in the decree, should help to ensure buyers are accurately informed of any legal issues connected with a property.

“However these measures will not, of course, do anything to help existing homeowners who have been experiencing issues with their properties. We will continue to work with the Spanish authorities to ensure these problems are addressed.”

As some consolation for homeowners who currently live in illegally built homes, however, the Land Registry does recognise the existence of these homes, providing they were bought in good faith.

While the home still retains its illegal status, it will be protected from demolition providing it has been standing for four or more years and has not been built on a flood plain or on protected land.

Referring to a common scam among developers who use a town hall's passivity or inaction to acquire rights which contradict land and town planning laws, the new decree recognises the illegality.

"The use of land requires administrative authorisation and if the timeframe for a response expires without the individual receiving authorisation, the lack of a response will be considered as a negative decision," it says.

Finally, in an effort to protect purchases who buy off-plan from developers, the decree reminds them that they must first obtain their license of first occupation, a construction license and a technical certificate which states that the property corresponds to the plans for which the license was granted.

Charles Svoboda, a veteran campaigner against the unfair expropriation of land by the Spanish authorities, said: "The onus is still on the prospective buyer to do 'extreme' due diligence, going well beyond getting a piece of official looking paper from the town hall.

"That includes looking at the Foreign and Commonwealth Office site, and ours for example, and going beyond the ones the property hustlers are putting up now.

"Anyone buying into the Spanish market has to be aware that it is probably only going to be a lifestyle choice - maybe an extravagance like an expensive car or boat. The 'investment' quality is very questionable for now and the foreseeable future."

There are believed to be anything up to 300,000 properties that have been deemed illegal by Andalucian authorities, many of them owned by Britons who bought in good faith.

There are estimated to be 700,000 unsold holiday homes in Spain, the majority of which are located along the southern Spanish coastlines where property prices have dropped by as much as 60 per cent in some regions.

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