Irish Property Buyer 01.07
On dangerous ground?
Irish Property Buyer Magazine,
Jan 2007
The demolition of illegally built houses in Spain is a hot topic. But what steps should you take if you suspect your house could be in danger? Solicitor Tom McGrath has some sound advice.
RECENT media reports revealing the demolition of houses in Spain will have caused many Irish second home- owners great concern. As a Dublin based solicitor and fluent Spanish speaker representing Irish clients in Spain for many years, I am well placed to comment on the current situation.
Over the last 40 years, tourism in Spain has become a major industry. Construction has seen massive growth in answering the demand for second homes from foreign nationals. This has led to unscrupulous practices by some developers, estate agents and local officials, who have built and sold homes without permission in green zone areas. However, it is important to stress that the government's determination to eradicate these corrupt practices will ultimately safeguard Irish property buyers' interests.
At present in Marbella no licenses are being granted and developers are being investigated on a case-by-case basis. While these investigations may lead to the demolition of some homes - particularly those in gross infringement of legislation - it is unclear as yet how that
will affect Irish property buyers with homes in Spain. Certainly, reports that 100,000 homes in Spain will be demolished are exaggerated. Although the government wish to make an example of certain developers, they are also keen to protect their tourist industry and will not wish to see holidaymakers suffer at the hands of corrupt developers. In Spain, my colleagues - highly reputable professionals - view what is happening as a wholly positive step towards creating one of the most effective conveyancing systems in Europe.
Purchasers, who instructed a reputable solicitor to investigate the title, would have been alerted to the risks involved. This highlights - both at home and abroad - that common sense and caution should always be exercised when buying a property. Using lawyers recommended by estate agents or even developers can lead to a conflict of interest, should the terms of contracts agreed be more favourable to the developers. Any Irish investor buying a property in Spain - or any foreign country - should act as they would in Ireland, protecting their interests by securing legal representation by a lawyer. There are many reputable lawyers and developers throughout Spain.
It is also worth noting that any country experiencing a property boom will encounter some degree of irregular practice. In Ireland builders have taken advantage of purchasers by not refunding deposits, 'gazumping' purchasers, delaying the handing over of properties and not meeting building standards.
Thousands of Irish people have successfully purchased property in Spain over the years. At our firm, we process numerous purchases on a regular ongoing basis. Of the 25.5 per cent of our clients that have bought in the Costa Blanca region, only 0.7 per cent have encountered any difficulties with the sale. In Malaga, where 23.4 per cent of our clients bought their properties, the percentage of clients in dispute is the same. More Irish people are enjoying homes overseas: between 2000 and 2004 the number of Irish travelling to second homes in Europe tripled. Many are looking overseas for investment opportunities as it is more likely to show a higher return than in Ireland where, despite soaring property prices, rental income returns are unremarkable. Spain and Ireland have been at the forefront of Europe's economic boom for the last 10 years and over the last decade it is said that over 150,000 Irish people have bought Spanish homes. For many of these people, Spain feels like a second home and they can visit the country with ease due to direct low cost airline routes. There arc many new areas waiting to be discovered and each autonomous government sets its rules and regulations and 1 believe that most, if not all, do so to high standards.
There have been sad stories for those unwittingly embroiled in unscrupulous deals, but if a little care is taken to instruct solicitors.
Title charge
So what should you do if you suspect that the title to your Spanish property isn't all that it seems? Tom McGrath has the answers IF anyone has a property and encounters a problem with their title - if the apartment has been built without a licence - they should immediately take it up with their lawyer. Of course, this is assuming that they had instructed a lawyer in the first instance. (However, it is probable that such a purchaser did not have a lawyer in the first place as it would have been their function to ensure all searches were done on the title to guarantee licences and planning permissions were already in place.)
If someone has purchased without legal representation, they should immediately contact a reliable lawyer who will establish what the situation is. The legal representative would then take the matter up with the local authority who can report on the actual position.
If the case is of a serious nature and can't be solved, legal proceedings will have to be brought by the authorities for the demolition of the building. In these circumstances, a court order will be required. Obviously, there would be a right of appeal and it would be much better for such homeowners to have someone well placed to 'fight their corner. So independent legal advice is absolutely essential in this situation.
to ensure that proper title is available, people can be sure that they are spending their money wisely and can enjoy their investment, holiday home or retirement home.
Tom McGrath & Associates is a leading Irish legal practice that provides a comprehensive range of legal services to clients in both business and private sectors in the purchase of property abroad.