EU pilot scheme guarantees legal certainty when buying property cross-border

Fecha Publicación: 
15 Junio 2011
EU parliament vice president Diana Wallis MEP has commended a pilot scheme that promises to end the probems experienced by expats when buying property in Spain and other EU countries.
 
The Telegraph | Noticia
 

The scheme, set up by the European Land Registry Association and funded by the EU, allows for the purchasing procedure to be settled in the buyer's home country and under the protective laws of that country.

It also guarantees compensation for unknown restrictions and violation of the contract by the seller.

Currently piloted in Holland and Spain, the Cross Border Electronic Conveyancing (CROBECO) scheme means that a Dutch buyer of Spanish real estate can apply Dutch law to the contract and ask a Dutch court for compensation from the seller if he later finds out there are unknown public limitations, such as retrospective planning laws, affecting the property.

Pilots with other countries are expected later this year.

Diana Wallis MEP (Liberal Democrats, UK), who has long campaigned for an EU-wide guarantee of legal certainty when buying cross-border, said: "I feel more and more convinced about the work of the Land Registry.

"The project seems to me practical and appears to work.

"The beauty of it is that a buyer can have a direct contractual relationship with a person in their own country, which is what is needed because a lot of people don't know whether they are coming or going when it comes to buying abroad.

"I've had so many people knocking at my door, dreadfully distressed, having bought in good faith and then lost their home or had serious problems with it because of unknown restrictions."

"The EU has a role to play in helping to facilitate property deals across borders and at the very least provide a framework of legal certainty.

"In practice, this means we must ensure that there is full access to information on the state of a property, the conditions attached to it and any other legal obligations or obstacles.

"This must go hand in hand with a transparent administration of the property deal and a quick and clear judicial process in case something goes wrong."

Details of the CROBECO project were unveiled at a seminar hosted by Ms Wallis on June 14 at the EU parliament, in a bid to find a way forward in overcoming legal uncertainties when buying land abroad.

A spokeman for ELRA said: "The fact that the deed is processed in the buyer's own language by a conveyancer from their own country, [means] they get the feeling that they are better legally protected and will be less reluctant to buy real estate in foreign countries where the real estate market has collapsed."

The scheme is likely to be music to the ears of investors looking to snap up a bargain safely, as well as countries such as Spain who, saddled as they are with a toxic combination of surplus holiday homes, a flailing economy and a tarnished property sector reputation, are desperate to entice foreign buyers back into their housing market.

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