AN ARTICLE in yesterday’s Daily Telegraph reported on the initiative taken by the UK government in Spain where the government has recently appointed a special overseas property advisor to help deal with the Spanish property scams.
A similar approach was suggested by the Cyprus Property Action Group (CPAG) in its report ‘Cyprus Property Pitfalls: a time for action’ submitted to the Cyprus Government at the start of 2008. And last month in his letter to Cyprus President Dimitris Christofias, MEP for Scotland Alyn Smith suggested that he “may wish to consider establishing a foreign investor advice service or an impartial ombudsman for such cases”.
As you will see from the Daily Telegraph article below, there are many similarities between the scams in both the Spanish and Cyprus property markets.
The UK government is currently dealing with more than a dozen different action groups made up of thousands of disenchanted expats who have lost hundreds of millions in property scams throughout Spain.
The situation is so severe that the government recently appointed a special overseas property advisor to help deal with it and to better understand the problems of those involved.
As a result, contentious issues such as illegal properties which do not have correct permits, cases where off-plan developments have not been built as specified and the length of time and cost involved in resolving property disputes were recently raised by the British ambassador to Spain with the Andalucian regional government and the Minister for Public Works and Housing.
A spokesman for the British Embassy in Spain said: “The UK government has no authority to interfere in any matters relating to Spanish domestic legislation, whether national, regional or local.
“However, we continue to express concern at the impact these problems are having on the lives of some of our citizens and Spain’s reputation abroad, and we have raised property issues with ministers in Spain and regional governments on numerous occasions.
“We understand the regional government is currently working with town halls in affected municipalities to draw up inventories of illegal properties and to seek solutions.
“We believe that the regularisation of these properties will come through updates and modifications to local town development plans.”
One of the cases being studied by the special overseas advisor is that put forward by the Abusos Urbanisticos Lliber – NO! (AULN) action group, made up of expats who bought 298 family homes in the upmarket, inland village of Lliber on the Costa Blanca more than ten years ago.
The area has been blighted as a consequence of the arrangements made between former town hall officials and builders to build with building licences granted by the town hall but without authority from regional government.
Wholesale construction continued from 1999-2004, by which time an estimated £60 million was handed over to developers by unsuspecting expat families and retired couples.
One of the victims, who wishes to remain anonymous, said: “In 2004 the local environment agency, the college of architects and the guardia civil decided the homes were illegally built so building stopped.
“I took early retirement and with my wife, through an agency in Cheltenham, bought a three bedroom, three bathroom villa with swimming pool and views over the hills but we have no mains water, no electricity and we can’t sell because it is illegally built. We are in limbo. The embassy has been great with advice but their hands are tied. The Spanish just don’t want to know. It is a dirty, dirty business.”
Thanks to the action group and its members’ persistence, 2.4 million euros were recovered last year when police arrested the town hall architect and found the money in a private Andorran bank account.
A further 18 people are currently awaiting trial for corruption and fraud relating to the illegal building of homes in Lliber including the ex-mayor José Mas Avellá, British builder Trevor Bourne and agent Miguel Muntaner who had accumulated 100,000 sq of land in the Marina Alta as well as 16 houses and seven cars.
Only this week the Telegraph reported on the 300 Britons who lost an estimated £34 million after paying deposits on off-the-plan apartments in a proposed development called Estepona Beach and Country Club, 20 miles from Marbella.
In some cases, the prospective owners – many of whom were from Northern Ireland – put down an £85,000 deposit. However, the land still belonged to its original owner and the complex was never built.
As the overseas advisor continues to do her best to advise distraught expats and direct them to competent authorities and organisations which may be of assistance, the question has to be asked: why have scams been so prevalent in Spain?
Charles Svoboda, vice president of the Valencian action group Abusos Urbanisticos – No (AUN), who has been advising distraught British expats year after year, told Telegraph Expat that it is simply because: “The laws are too lax and full of loopholes that tend to favour the scammers.
“There have been too many unscrupulous promoters, developers, estate agents, lawyers, notaries, town halls, etc involved in the process, whose main aim has been to make as much money as fast as possible.
“Their attitude has no concern about the lack of morality, let alone legality or corruption in all this. The sentiment that buyers are suckers who don’t understand anything here and can’t see past the beaches and bars when they buy is widespread.
“Some expats are naive enough to believe that things should work here as they do in the UK or northern Europe, when that is a pipe dream.
“And finally, the courts are slow and there are very few other recourses or ways to put things right here.”
By Sean O’Hare