Again, not a wise move at the moment. Below are article from the local ex-pat press including the possible demise of one of Spain's - yes Spain's - biggest building companies in the shape of San Jose. We know of one poor soul who gave them a great deal of money for a house to be built some years ago. She has lost her savings and still has nothing to show for the money she gave away.
From The Costa Blanca News:
BUILDER’S CASHCRISIS HITS BRITS
Buyers panic as developer suspends payments
By Dave Jones and Nuria Pérez
HUNDREDS of property buyers were left fearing for the future of their investments this week following the financial implosion of a Costa Blanca construction giant.
San José Inversiones y Proyectos Urbanísticos S.A has applied to the courts to enter into voluntary suspension of payments.
Numerous expats living throughout the Costa Blanca and many UK buyers have invested in San José urbanisations which are under construction or waiting to be built.
These include the half-finished El Pinet in La Marina village, Albatera Golf and Santa Ana del Monte resort in Jumilla, Murcia.
Buyers’ dreams will now be put on hold while the courts establish how to proceed.
A lawyers and consultants company based in Benidorm and Jávea told CB News they have already been approached by several residents in the northern Costa Blanca and UK buyers who have been affected by the San José crisis.
One retired couple from Northern Ireland, who bought at Santa Ana del Monte resort, told CB News: “As you can imagine we are in pieces and our dreams are in tatters.”
Orihuela-based San José Inversiones y Proyectos Urbanísticos S.A is bidding to face up to a 30-million-euro debt by going through the ‘Concurso de Acreedores’ (formerly known as ‘suspension of payments’) process.
By law it is the obligation of administrators appointed by a judge to try to keep the company afloat in order that creditors can be paid.
In due course they will decide whether the company can continue as a going concern – although there is no set time frame for this course of action.
According to San José, the suspension of their principal building projects – in particular El Pinet urbanisation in La Marina – has led to the current financial crisis.
Despite the fact that many buyers have handed over tens of thousands of euros each as down payments for properties, the company has been unable to meet its financial obligations.
In a statement sent to CB News this week company bosses state that they are seeking to protect the rights of both company workers and creditors by applying for the voluntary suspension of payments.
They also hit out at the banks who ‘incomprehensibly’ failed to back the company when they needed their support – even though the financial institutions knew the company possessed valuable land assets.
Antonio Navarro, president of Procosta – the association which represents Vega Baja construction companies – said he was confident buyers will either be refunded or have their properties built.
However clients of the company were not so optimistic.
djones@cbnews.es
nperez@cbnews.es
So much for the builder's ten year guarantee on houses and apartments already purchased from this giant company - houses that suffer with all manner of structural problems.
From The Times of London:
Panic selling of stocks in Spanish property firms earlier this week could cause a drop in house prices and spell disaster for more than 70,000 Britons who own a home there, experts have warned.
Economists at Lombard Street Research said that the housing market in Spain is teetering on the brink of a crash.They said: “The country is over-housed, households are over-indebted and the construction industry continues to churn out homes.”
The fear come after months of speculation that the boom in the Spanish housing market could turn to bust.
Last year house price inflation in Spain fell by 5 per cent to 10 per cent year on year, according the Royal Institution of Chartered Surveyors (RICS). Some areas in the north of the country experienced hardly any price growth at all.
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Overdevelopment of the coast has caused demand to weaken and prices in some areas to fall. A fifth of all housing in Spain has been built during the past ten years driven by tourism and the construction industry.
Spain has long been the destination of choice for Britons. However recent land scandals and the attraction of less expensive emerging markets have meant that demand from British buyers has declined in recent years.
Last year corruption on the Costa del Sol left British property owners fearing for their Spanish boltholes after homes were built illegally on protected land.
The Ley Reguladora de la Actividad Urbanistica (LRAU) - or land grab law - has also left some Britons out of pocket: the law can demand in certain cases that owners cede part of their land to the town hall while receiving as little as 10 per cent of the value of their property in compensation. In some cases owners have found themselves liable for the part of the cost of redeveloping what was their land.
David Stubbs, RICS senior economist said: "The growing troubles of the Spanish housing market provide a timely reminder that investments in foreign property carry significant risk. Just because house prices seem low in relation to the UK does not necessarily mean that they represent a good investment. Indeed, markets which have been fuelled by significant foreign demand, and have encouraged housebuilding levels that threaten to generate a glut of homes for sale on the market, should be of particular concern to Brits considering their investment options."
From The Times of London
COSTA BLANCA
Once a beautiful coast, the southern Costa Blanca, centred on Torrevieja, now resembles a concrete estate.
Inland, it’s a minefield of illegal projects. If it’s not cheap, it’s not good value; and if it is cheap, then it’s just cheap. Prices for flats have stayed the same, but villas that sold for £130,000 in 2005 are asking £116,000.
The northern Costa Blanca is in better shape, especially the smart area around Javea, Denia and Moraira. The market is subdued but stable, and many vendors have given up asking silly prices. Flats are typically up 15%, and typical three-bed villas in Javea, which were about £270,000 two years ago, now cost about £305,000.
“Transactions are fewer, but there is still substantial interest in quality properties in good locations from a core of affluent buyers,” says David Mear, of VillaMia, in Javea.
Well, the above from an estate agent. Buy inland - you must be joking ! Risk having your land seized under the Spanish 'LRAU' land grab law and being left homeless ! Oh yes, it happens daily here.
This from the Daily Mail:
Warning over Spanish land grab
Richard Price, Daily Mail
BRITONS dreaming of a happy retirement in the Spanish sunshine were warned yesterday that they could fall victim to a scandalous land grab.
Foreign Office officials said anyone thinking of buying property in Spain should take legal advice before putting pen to paper.
Otherwise they could suffer the same fate as many in the south of the country who have been forced to hand over their land - and in some cases even pay for the privilege.
Russell Thompson, the British consul in Alicante, was joined by politicians and campaigners in calling for an immediate halt to the practice, which Spain has imposed in blatant defiance of international law.
He described it as 'a licence to print money using somebody else's paper and somebody else's ink'.
The mass seizure of land by property developers is being carried out in the autonomous region of Valencia, which includes the Costa Blanca.
The Urban Development Activity Act contravenes European Human Rights legislation, but the Valencian government has chosen to ignore this fact.
One of the biggest illegal land grabs in Europe since World War II, it arises from the enforcement of a property law passed ten years ago to kick-start a programme of housing for low-paid workers.
It was also designed to foil speculators who paid very little for huge holdings of scrub countryside and cashed in when it was wanted for developments such as airports, schools or hospitals.
The law decrees that if a rural area is re-zoned for
building, the authorities can demand up to 70% of the land free - or, in some cases, paying only a tiny percentage of the market value. And the landowners can even be forced to hand over cash as well - supposedly to pay towards the development of the area which will 'benefit' them.
All any town hall has to do is proclaim the land is needed for 'public or social benefit'. There is no appeals process.
But after property prices soared in the late Nineties, developers in cahoots with corrupt local politicians started declaring the land attached to foreign-owned villas as needed for public benefit, forcing the owners to hand it over for nothing.
As a result an estimated 125,000 Britons who sold up to move to the area are living in fear of losing everything they own.
Mr Thompson said: 'Back in the Nineties there were property developers sitting on land waiting for the price to go up so the law was given teeth to stop this from happening. Now it is being used by those same speculators against the small holiday home and retirement home owner.'
Mr Thompson, who himself owns a property in the region, added that it was bought within an existing town and he had a very good lawyer 'but I still have sleepless nights'.
Charles Svoboda, who is leading a campaign on behalf of more than 10,000 affected Britons, Germmans and other expatriates, described the law as 'brutal'.
He added: 'This is a charter for abuse through which private developers are making huge sums of money by effectively stealing from lawabiding homeowners.
'It is dastardly. This law is totally unjust and destroys people's lives.'
Mr Svoboda, 63, the former head of Canada's Security Intelligence Service, is fighting demands for his villa and land in Benimaro which will cost him about £700,000 if he loses.
Last night a spokesman for the Foreign Office said: 'Our main advice to British nationals who are thinking of purchasing property in Spain is to seek professional legal advice before proceeding.'
Shadow Foreign Secretary Michael Ancram said: 'If the EU is to provide any protection for its
memmbers it must resolve this situation urgently by protecting the property rights of British people living in Spain.'
Liberal Democrat Home Affairs spokesman Sir Menzies Campbell, the MP for North-East Fife, said: 'A number of my constituents have been hit by this law and suffered financially.
'The Spanish government would be well advised to reconsider a law which causes so much anxiety and hardship to innocent homeowners.'
Following a raft of complaints from aggrieved landowners the European Union finally took some action earlier this year.
A delegation of MEPs was sent to investigate land law abuses and last month they issued a damning 160-page report, calling for an immediate halt to the practice.
The report stated: 'They have had their land and their homes expropriated and had to pay for the experience, finding themselves in a surrealistic legal environment without any proper recourse to real justice.'
It also condemns some developers as 'unscrupulous beneficiaries of the law's application'.
The report added: 'The delegation heard first-hand accounts of attempts at bribery and corruption on local councils. Many Spanish citizens expressed their shame at the level of corruption. Others complained of being intimidated by local politicians and several received clear threats.'
However, campaigners are not convinced that the MEPs' concerns will lead to any action, as the matter has not yet been discussed at the top level of the EU.
According to Mr Svoboda, applications are still being made by developers and they are still being granted by councils.
As a result the campaigners have enlisted the help of the City law firm Irwin Mitchell, which has prepared a number of cases to go before the European Court of Human Rights should the EU's intervention fail. Hugh Robertson, a partner in the firm and who also has a house in the Valencia region, said: 'We believe we have a compelling case which could force the Spanish government to pay compensation to thousands of people.'
There are fears, however, that other autonomous Spanish provinces could jump on the lucrative bandwagon invented by Valencia - threatening yet more of the 800,000 properties owned by Britons.
And while the politicians wring their hands and make promises, lawyers make lots of money and people lose their homes !
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