Knock 'em Down...
... and name and shame the agents who sold them, says GRAHAM GOVIER, of Inland Andalucia, who estimates that despite 600 agents being fined for selling illegal homes, many are still offering properties likely to be demolished
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I AM continually frustrated by the reporting of the demolition of illegal properties across Spain over the last few months. Most of you will say 'of course you are, you're an estate agent' But it's not for that reason: My frustration is a lack of reporting on the reasons these buyers ended up with these illegal properties in the first place.
The situation would certainly not happen in the UK, so why is it happening here? A simple question with a simple answer: It is the estate agents and lawyers who have allowed these sales to go through. They should be held accountable for their actions and properly named and shamed! There has always been a secure buying process in Spain, but unfortunately prior to 2007 the real estate industry was unregulated and buyers were reliant upon the integrity of the estate agency and the individual lawyer involved.
There is now legislation, thankfully, which makes it illegal for an estate agency to offer properties for sale unless they have used 'due diligence' to check that the title deed is correct in every detail, including relevant licenses. There is even a special division of the Guardia Civil, which continually visits and checks agents for infringements of the new rules. And it is alleged that over 600 agencies in just the Velez Malaga, Jaen and Granada areas alone have already been fined or are facing prosecution.
Our agency Inland Andalucia Knock'em Down... ... and name and shame the agents who sold them, says GRAHAM GOVIER, of Inland Andalucia, who estimates that despite 600 agents being fined for selling illegal homes, many are still offering properties likely to be demolished has been visited three times and, as I expected, we received no fine - as we operate correctly.
Ignorant agents
In addition to the checks on agents, there are also severe penalties for lawyers under the new rules, in regards to any collusion to under-declare the true price paid for a property. This legislation must come as a relief to those considering purchasing a property in Spain at the moment. Which brings me to the million dollar question. Should these illegal properties be demolished? The answer is 'yes', I believe they should... otherwise the legislation is meaningless.
Despite the new rules, I estimate that there are at least 600 illegal properties in the rural areas of Antequera, Puente Genil, Marchena and Arahal still being offered for sale. BUYER BEWARE. The ignorance of the various agents involved will be no excuse or consolation if you buy and the house is knocked down. Make sure you are careful and check out who you are dealing with, first.
And don't be fooled by the so called 'title deed insurance' policies currently being offered by some agencies.
My philosophy has always been: 'Why waste everybody's time in listing and attempting to sell an illegal property?'. There has always been a sufficient supply of legal properties and I have never allowed illegal properties to be offered for sale. One thing that should be pointed out however.
There are certainly plenty of 'anomalies' with most inland properties, but most issues can normally be resolved prior to the property being transferred to the new buyer. A typical one is the amount of square metres registered on a title deed, which is often less that what actually exists.
You could relate this to the UK market, where someone has built a conservatory on to their property under a permitted use and then modified it to become an extension to the property.
When the property is sold, it would normally be the surveyor or a lawyer for the mortgage company to decide on the legality.
In Spain, if the increased size is less than 20 per cent of the entire property, then by obtaining an architect's certifi cate, your new title deed is modifi ed to refl ect exactly the situation and the authorities update their records. Most 'illegal' properties are find in rural areas. It usually happens when a land owner strips his land of olives or vines, fences off areas and provides a supply of electricity and water. The plots are normally sold off to middle class Spanish to construct their 'weekend retreats'. They mostly don't even bother with a building project, as the local town halls are prepared to turn a blind eye. Many are eventually legalised and, as long as the rustic land has good title, there is normally little concern.
The process is to instruct a qualified architect to measure exactly what exists on the land in terms of the size and location of the property, swimming pool, etc including an accurate identification of boundaries and right of access. The architect is charged with producing a certificate, which measures and fully describes the property, including a location plan and the date of any construction. This certificate is then presented to a notary for authentication.
The next process is to present this to the local town hall and insist upon another certifi cate stating that they have taken no action to remove this property since its construction.
Not necessarily legal
With these important documents the owner of the property has to then publicly declare the buildings on a new titledeed at the notary and pay the relevant taxes.
The process is to demonstrate that your due diligence now entitles you to enjoy your property.
Immediately this process is completed the new buyer is safe to proceed. Sounds complicated? Not so when you use experts like ourselves. While time-consuming, it is absolutely necessary in the sale process. Who pays? That's normally by negotiation, but we are not talking about an expensive process.
Within our organisation, we normally convince the seller to pay by reminding them that their property is not saleable until all these issues are resolved on the title deed and the Land Registry.
Until the new law, it was always too easy for an unscrupulous agent or lawyer to say, 'Here is your title deed for the rustic land, it's all correct'. But just because the piece of land had a good title deed it didn't mean it was legal for residential use.
If there had been no mention or attempt to register the property then it was illegal, simple as that.
How many times have I heard people saying they had trusted in the agency or lawyer. Well it is simply too bad and the only consolation is that with the present economical climate, most of these agencies have now failed and we would hope they never appear again.
Finally there is one other important area to be aware of; the illegal practice of offering 'Off Plan' properties that do not have building licenses. How often do we read about buyers losing their deposits, or discover that they must wait another two or three years for completion? Palmera Properties is one of the main culprits, and we know first hand about them as they have projects near us in Mollina and Fuente de Piedra. They were offering properties for sale through many local agencies that had no formal licences in place. One such 'Cortijo' style project was to construct 400 houses in Humilladero and at a price of 330.000€.
I found it extraordinary that any estate agent could risk their reputation in offering such a product.
But even as I write, there are agencies still offering these properties for sale. A quick Google search, typing in 'cortijo in Humilladero', and I found four agents selling these properties.
But from my very first contact with Palmera in 2004, I was extremely wary of their proposals and practices.
Palmera built and sold over 200 properties within a very close proximity to our Mollina offices.
I refused to offer any of these properties, and after reading about all the problems I am frankly over the moon about not getting involved.
After all, imagine how we would look with our slogan 'You're in Safe Hands' if we had done? A final bit of advice and a clever tactic you could employ in the buying process is to always state to the agency that you want the maximum mortgage available from a local bank that has English-speaking staff. Even if you don't require a mortgage, you are being smart as the bank will by law investigate the legality of the property and if they are not willing to lend the money, then why risk yours? Don't forget you can always decline the mortgage offer after the bank's experts have done their job.
Happy house hunting!
About The Author
Graham Govier has been working in real estate in Andalucia for a decade and is often credited with running the region's number one inland estate agency, Inland Andalucia.
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