The Sunday Tribune 03.07

EXPERT ADVICE - Buying in Spain
Sunday Tribue
February 2007

• Q1. I want to buy a holiday home in Spain but an concerned about the news that property may be I demolished. Is it safe to buy?
  
  
• A1. Spain has always been popular, but in the last four years interest has waned due to some high prices and negative press coverage of corrupt practice. High prices however, reflect the scale of some developments, particularly in the Costa del Sol region, and while development continues, prices will eventually level off. Authorities have become increasingly vigilant in cracking down on unscrupulous practices, with many officials arrested, and following elections in May corruption should be a thing of the past. The demolition of a number of properties is highly unlikely and while some developments may be demolished, this is likely to occur in the hundreds rather than thousands. As with buying any property, it is important to deal with reputable agents and to seek independent legal advice. With a proper investigation, the registration system is exceptionally good and the conveyancing system is simple and effective. Spain will always be a safe bet for investors, thanks to easy, inexpensive access, excellent infrastructure and good weather.

Power of Attorney

• Q2. What is power of attorney and should you assign a power of attorney if asked to do so?
  
  
• A2. A Power of attorney is a mandate to allow a person to carry out a specific task on your behalf. However, this may be quite general and in some cases people are asked to sign documents which are too broad in scope and may allow the other party to have control over their finances and properties.
  
  Powers of attorney should be specific, for example, if someone is to open a bank account on your behalf it should be specifically to that bank and for a certain amount of money. Of course, never sign any document unless you are sure you know what you are signing and if it is of a legal nature, seek professional advice.
  
  Never give power of attorney to anyone that you do not know or who has not been introduced to you by someone that you trust. We have a client who, prior to instructing us, granted power of attorney in a foreign language to a foreign estate agent to manage their properties but unknown to them, the power of attorney contained a clause allowing the agent to sell. The agent then sold the property and subsequently vanished with the proceeds.

Legal restrictions in Dominican Republic

• Q3. I hope to buy an apartment in The Dominican Republic Are there any restrictions on I foreigners buying property there or legal pitfalls I should look out for?
  
  
• A3. There are no restrictions on foreigners purchasing property in the Dominican ■ Republic however as there are several legal restrictions on properties, professional legal advice is a must. In the Dominican Republic land is subject to building restrictions in tourist zones and no building is allowed within the maritime zone without a special permit from the Executive Branch.
  
  An independent lawyer will check the title and ensure that the developer has the appropriate licenses. Keep an eye on your budget; properties are subject to several taxes which can mount up. Buyers must make payments within a reasonable period of time (28 days) after signing the reservation agreement and as close as possible to the dates estimated for exchange of contracts as stipulated in the reservation document.
  
  Developers and lawyers should be notified of any other delays and buyers should ensure that the payment is made as soon as possible. If you have bought off plans, it's worth noting that developers have a period of grace during delays to the completion of the property and do not have to compensate the buyer. While other delays are subject to compensation, these are exempt in cases of Force Majeure or Acts of God, where no compensation can be sought.