The important construction company Seop has filed for voluntary bankruptcy. It is a subsidiary company of the Eagle group, currently with a number of projects under construction in Albacete, Murcia and Alicante. 70 subcontractors and suppliers on the Costa Blanca are left with unpaid bills totalling 10 million Euro. The Basque construction company Ereaga has suspended payments, as too has the Canarian company Mazotti and the Catalan Sanchez Romero. The Cosmani property group, Immobiliaria Amuerma and Jale Construcciones in Cadiz, the Madrid builder Prasie and Construart Valencia have done likewise.
The sale of the shares in the leading property company Colonial to the Dubai Investment Fund is again in danger, due in part to the banks not agreeing the deal. The shares of Colonial fell another 23.53% last week. Also the promotion company Martinsa-Fadesa (biggest in Europe) has problems in refinancing its debts, and has missed a part instalment of 362 million Euro from total debts of 2,800 million that should have been paid on the 26th of March.
Friday, May 23, 2008
“Catastrazo” coming
After the taxes and fees on new property projects have failed to be realised, more and more municipalities are asking the Catastro (the office in the Ministry of Finance regulating the fiscal values of property) to revise, upwardly, the property values in their areas. In this way they hope to raise the ‘missing’ tax income. There are now 3.5 million dwellings due for revision, of their often very low values, 15% of the total housing stock. Since the fiscal value of the Catastro is the basis for calculation of the local rates, such a revision will mean higher IBI-taxes for property owners and for some, higher Patrimonio payments too.
What that means is that taxes in Spain are set to rise in a big way !
What that means is that taxes in Spain are set to rise in a big way !
More bad news from 'Citizens of Europe' Organisation
I am a member of this organisation and this is our latest newsletter:
Expropriation of the expropriators?
In a new section of the National Law on Land (Ley del Suelo) dated 5th March this year, the Government has opened the door for the expropriation of building land if a promoter does not comply with the time limits or conditions established for a building project.
59% of hotel beds occupied on Costa del Sol
58.9% of the hotel beds on Costa del Sol were occupied during April, 8% less than the same month last year. An occupation rate of 62.46% is expected for May. The British are the most frequent hotel guests at 30.32% of the total, followed by Spanish 29.78%, Germans 8.26%, French 6.51, Nordic countries 4.32, Holland 3.9, Belgium 2.48, Italy 2.45 and the United States 2.43%.
Deutsche Bank: Sell shares in 4 Spanish banks!
In a study of the Spanish banking sector, analysts at Deutsche Bank are recommending investors to sell their shares in Banco de Sabadell, Bankinter, Banco Pastor and Banco Popular. The leading European bank points to a strong increase in the non-payment of loans, the high costs of refinancing debts and a rapid deterioration in the macro-economic conditions in Spain.
Economy stalling
Growth in the economy is falling. The numbers from the first quarter are shattering: only a 0.3% increase. This translates to a yearly growth of only 1.2%, but if the trend continues, growth this year could be less than 1%. During the first quarter of last year, the economy expanded 0.8%.
Industrial activity fell 8.2% in March, compared with same month last year.
Spain is now lagging far behind other European countries; the average growth in EU during the first 3 months was 0.7%, Germany has a yearly growth of 2.6%, France 2.2% and the UK 2.5%.
Funds for unemployment only to September
The newspaper "El Mundo" calculates there are only sufficient funds to pay the unemployed until September. 15,506 million euros for unemployment support was included in the state budget for this year, the government estimating unemployment would increase only 9%, however, unemployment is increasing rapidly, presently at a rate of more than 21%.
In a press conference, Minister of Finance Pedro Solbes, acknowledged the situation but insisted, "the public coffers are not empty." Although he did admit the state will have 500 million euros less in tax income this year than foreseen in the budget.
Social Security insolvent
A profound study by the Instituto Valenciano de Investigaciones Economicas (IVIE) on the solvency of the Social Security system, found payment obligations (to the retired) are 31.4% greater than contributions. The professors who conducted the study did not hesitate to say the system is insolvent and is becoming more so for every year.
Construction down 46.2% in February
The number of dwellings approved for construction fell by 46.2% in February. We repeat: from an already low level the number of dwellings eventually to be constructed has declined 46.2% in one month! This is the natural consequence of the 72% fall in sales of the big promoters in the first quarter, from an already low level.
The urban wonder world
A promoter mentioned in the Malaya case in Marbella is trying to intimidate land owners in a village near Avilato sell their land at 60 cents per square meter so that he can build a macro development of 3,500 dwellings, two golf courses and a commercial centre. He is supported in his endeavors by the local PP mayor.
The digital magazine "Observador" on Costa del Sol is reporting that the Malaga Mayor Francisco de la Torre (PP) is contributing to the spiraling price of 10,000 euros per m2. If this goes through, it would mean each of the 25 houses to be built there would cost 570.000 euros.
The promoters of the large scale project Merinos Norte in Ronda have stopped the work on the project, but continued legal action against the ecologists and citizens of the town who are protesting against the project. The company are demanding 6 million Euro in damages from the protesters.
As we reported last week, the Orihuela property company San Jose Inverciones has gone bust, leaving more than 1.000 buyers in a precarious situation, in addition to many local investors having given land or money to the promoter. An information meeting will be held in Hotel Holiday Inn on Birmingham Airport, meeting rooms Trident 1 & 2, Sunday 25th at 16.00 hours, where lawyers from Irwin Mitchell Abogados will be present.
Due to the huge amount of material concerning the present dramatic situation in the Spanish property market, and the economy in general, we have decided to place a collection of important comments, relating the crisis, on our web page under www.c-euro.org. Please go to "Information on Spain" then "Economy" and you will find it under: "Comment on a Crisis".
Carrier of bad news
For the foreign property buyers and owners in Spain, it is important to know about legislation, concerning, taxes, cars, residence permits, communities of owners etc. but maybe the most important information is about how the economy and especially the property market of our chosen country is developing, leading on to such important decisions as:- Should I buy a property in Spain? Should I sell my property in Spain?
Except for some in the property business - who invariably would recommend to buy - hardly anyone is as close to the situation of the foreigners and so tuned in to the property market, without having any commercial interests, than your Association Ciudadanos Europeos.
Looking back through the reports to the members, we can highlight the following:
At the end of 2004 we wrote:
"..2004 registered the first signs of exhaustion in the property boom. Sales are declining or taking longer, prices are not as vigorously up as previously and in certain areas have started to fall. But due to the long gestation time of a property project, the number of new dwellings started up and coming on the market in 2005, will be very high, probably around 500,000.
But some of the experienced and cautious promoters have already put on the brakes."
We were of course ridiculed by the property sector and the foreign language publications, living on the advertisement of this sector, for our warnings.
During 2005 we repeated our observations on several occasions, also warning our members against financing with variable interest loans, saying "The interest rate will go up!" This wasat a time when your bank was telling you not to worry!
In the Yearly Report 2006, written in the end of 2005 and sent our members in January 2006, we asked the rhetorical question, "Was the drop in foreigners purchasing property in Spain," which we had reported about on several occasions during the year 2005, " a temporary one?" We gave this answer:
"Promoters and sales agents are hoping the drop in sales is temporary and that the market will recover. We do not share their hopes! The high prices do not allow for any appreciation value and have driven investors into the stock market or to other countries where property and the cost of living is still cheap. The massive construction programs with building cranes everywhere is not attractive to retired people seeking tranquillity. The urban planning abuses committed against small landowners, promoted by the LRAU and LUV-laws, have scared many buyers away. Greed and corruption has damaged the reputation of the country. Spain has lost much of its attraction.
All signs point to a deepening and prolongation of the crisis on the Spanish property market."
In the beginning of 2007 we published a recommendation to all foreigners not to buy a property in the Valencia Region in the present circumstances. Again there followed fierce attacks from the property lobby, with the Federation of Promoters in Alicante threatening to take us to court for the damage caused to their business.
We are now getting close to the middle of 2008 and the crisis (still not acknowledged by the Government) is continuing and getting deeper. What we wrote in our Yearly Report for last year (written in the end of 2007) is coming true: "2007 was a bad year, 2008 will be worse!" In the same report we phrased the situation and judgment of what would come in this way: "Property crisis, credit crisis, economical crisis!" The economical crisis is already here and we are clearly heading for a social and political crisis.
Expropriation of the expropriators?
In a new section of the National Law on Land (Ley del Suelo) dated 5th March this year, the Government has opened the door for the expropriation of building land if a promoter does not comply with the time limits or conditions established for a building project.
59% of hotel beds occupied on Costa del Sol
58.9% of the hotel beds on Costa del Sol were occupied during April, 8% less than the same month last year. An occupation rate of 62.46% is expected for May. The British are the most frequent hotel guests at 30.32% of the total, followed by Spanish 29.78%, Germans 8.26%, French 6.51, Nordic countries 4.32, Holland 3.9, Belgium 2.48, Italy 2.45 and the United States 2.43%.
Deutsche Bank: Sell shares in 4 Spanish banks!
In a study of the Spanish banking sector, analysts at Deutsche Bank are recommending investors to sell their shares in Banco de Sabadell, Bankinter, Banco Pastor and Banco Popular. The leading European bank points to a strong increase in the non-payment of loans, the high costs of refinancing debts and a rapid deterioration in the macro-economic conditions in Spain.
Economy stalling
Growth in the economy is falling. The numbers from the first quarter are shattering: only a 0.3% increase. This translates to a yearly growth of only 1.2%, but if the trend continues, growth this year could be less than 1%. During the first quarter of last year, the economy expanded 0.8%.
Industrial activity fell 8.2% in March, compared with same month last year.
Spain is now lagging far behind other European countries; the average growth in EU during the first 3 months was 0.7%, Germany has a yearly growth of 2.6%, France 2.2% and the UK 2.5%.
Funds for unemployment only to September
The newspaper "El Mundo" calculates there are only sufficient funds to pay the unemployed until September. 15,506 million euros for unemployment support was included in the state budget for this year, the government estimating unemployment would increase only 9%, however, unemployment is increasing rapidly, presently at a rate of more than 21%.
In a press conference, Minister of Finance Pedro Solbes, acknowledged the situation but insisted, "the public coffers are not empty." Although he did admit the state will have 500 million euros less in tax income this year than foreseen in the budget.
Social Security insolvent
A profound study by the Instituto Valenciano de Investigaciones Economicas (IVIE) on the solvency of the Social Security system, found payment obligations (to the retired) are 31.4% greater than contributions. The professors who conducted the study did not hesitate to say the system is insolvent and is becoming more so for every year.
Construction down 46.2% in February
The number of dwellings approved for construction fell by 46.2% in February. We repeat: from an already low level the number of dwellings eventually to be constructed has declined 46.2% in one month! This is the natural consequence of the 72% fall in sales of the big promoters in the first quarter, from an already low level.
The urban wonder world
A promoter mentioned in the Malaya case in Marbella is trying to intimidate land owners in a village near Avilato sell their land at 60 cents per square meter so that he can build a macro development of 3,500 dwellings, two golf courses and a commercial centre. He is supported in his endeavors by the local PP mayor.
The digital magazine "Observador" on Costa del Sol is reporting that the Malaga Mayor Francisco de la Torre (PP) is contributing to the spiraling price of 10,000 euros per m2. If this goes through, it would mean each of the 25 houses to be built there would cost 570.000 euros.
The promoters of the large scale project Merinos Norte in Ronda have stopped the work on the project, but continued legal action against the ecologists and citizens of the town who are protesting against the project. The company are demanding 6 million Euro in damages from the protesters.
As we reported last week, the Orihuela property company San Jose Inverciones has gone bust, leaving more than 1.000 buyers in a precarious situation, in addition to many local investors having given land or money to the promoter. An information meeting will be held in Hotel Holiday Inn on Birmingham Airport, meeting rooms Trident 1 & 2, Sunday 25th at 16.00 hours, where lawyers from Irwin Mitchell Abogados will be present.
Due to the huge amount of material concerning the present dramatic situation in the Spanish property market, and the economy in general, we have decided to place a collection of important comments, relating the crisis, on our web page under www.c-euro.org. Please go to "Information on Spain" then "Economy" and you will find it under: "Comment on a Crisis".
Carrier of bad news
For the foreign property buyers and owners in Spain, it is important to know about legislation, concerning, taxes, cars, residence permits, communities of owners etc. but maybe the most important information is about how the economy and especially the property market of our chosen country is developing, leading on to such important decisions as:- Should I buy a property in Spain? Should I sell my property in Spain?
Except for some in the property business - who invariably would recommend to buy - hardly anyone is as close to the situation of the foreigners and so tuned in to the property market, without having any commercial interests, than your Association Ciudadanos Europeos.
Looking back through the reports to the members, we can highlight the following:
At the end of 2004 we wrote:
"..2004 registered the first signs of exhaustion in the property boom. Sales are declining or taking longer, prices are not as vigorously up as previously and in certain areas have started to fall. But due to the long gestation time of a property project, the number of new dwellings started up and coming on the market in 2005, will be very high, probably around 500,000.
But some of the experienced and cautious promoters have already put on the brakes."
We were of course ridiculed by the property sector and the foreign language publications, living on the advertisement of this sector, for our warnings.
During 2005 we repeated our observations on several occasions, also warning our members against financing with variable interest loans, saying "The interest rate will go up!" This wasat a time when your bank was telling you not to worry!
In the Yearly Report 2006, written in the end of 2005 and sent our members in January 2006, we asked the rhetorical question, "Was the drop in foreigners purchasing property in Spain," which we had reported about on several occasions during the year 2005, " a temporary one?" We gave this answer:
"Promoters and sales agents are hoping the drop in sales is temporary and that the market will recover. We do not share their hopes! The high prices do not allow for any appreciation value and have driven investors into the stock market or to other countries where property and the cost of living is still cheap. The massive construction programs with building cranes everywhere is not attractive to retired people seeking tranquillity. The urban planning abuses committed against small landowners, promoted by the LRAU and LUV-laws, have scared many buyers away. Greed and corruption has damaged the reputation of the country. Spain has lost much of its attraction.
All signs point to a deepening and prolongation of the crisis on the Spanish property market."
In the beginning of 2007 we published a recommendation to all foreigners not to buy a property in the Valencia Region in the present circumstances. Again there followed fierce attacks from the property lobby, with the Federation of Promoters in Alicante threatening to take us to court for the damage caused to their business.
We are now getting close to the middle of 2008 and the crisis (still not acknowledged by the Government) is continuing and getting deeper. What we wrote in our Yearly Report for last year (written in the end of 2007) is coming true: "2007 was a bad year, 2008 will be worse!" In the same report we phrased the situation and judgment of what would come in this way: "Property crisis, credit crisis, economical crisis!" The economical crisis is already here and we are clearly heading for a social and political crisis.
Thursday, May 22, 2008
Still not convinced ? - read what ex-pats are saying
On these internet discussion sites:
http://www.spainexpat.com/spain/forum/viewthread/2113/
http://www.eyeonspain.com/forums/posts-long-1378.aspx
http://www.spainexpat.com/spain/forum/viewthread/1188/
http://www.eyeonspain.com/forums/posts-long-4308.aspx
Still want to part with your money, your hard earned savings, your peace of mind ?
http://www.spainexpat.com/spain/forum/viewthread/2113/
http://www.eyeonspain.com/forums/posts-long-1378.aspx
http://www.spainexpat.com/spain/forum/viewthread/1188/
http://www.eyeonspain.com/forums/posts-long-4308.aspx
Still want to part with your money, your hard earned savings, your peace of mind ?
Orihuela Costa - buying a house, investing in property, setting up business
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.
Related Internet Links
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 !
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.
Related Internet Links
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 !
Los Verdes - The Green Party of Orihuela Costa
The Green Party are really trying their best and one of their blogs is worth a visit as it contains some interesting photographs:
http://cleanupthecosta.blogspot.com/
http://cleanupthecosta.blogspot.com/
Orihuela Costa - Crime
Whether you become a resident, an occasional visitor or just choose the area for your holiday, one thing will interfere with your day to day life and that is crime. As the construction industry, which reached fever pitch, burns itself out and unemployment rises, those formerly employed as buidling workers will turn their hands to other means of income and join the organised gangs in the area in helping themselves to your belongings, breaking into your house and your car.
Now, the following are not my words but abstracts from the local ex-pat press during May, 2008.
Read them and draw your own conclusions:
"Arson attack - A worrying incident which took place on 12 May reminded us of the dangers and insecurity of Orihuela Costa.
A car was set on fire only a few metres from the Playa Flamenca office of the Town Hall.
In the same area another similar incident occurred only a few months earlier.
A press release from local political party, C.L.A.R.O., proclaimed, “We hope the police will investigate this incident urgently and tell the public what lies behind these acts. One such incident might suggest vandalism, two would indicate criminality of a much more serious nature”.
There is a growing concern among citizens and business people that crime is rising. All the indicators, ranging from examples of house-breaking, bag snatching and delinquency point in this direction. And in the background, prostitution and car robbery are reminders that organised crime is present in Orihuela Costa.
Residents do not doubt that the police are doing their best but this is within the limits of their capacity.
C.L.A.R.O. commented, “Overall security policy is primarily the responsibility of the Orihuela municipal government. They decide the number of police in Orihuela Costa and they are responsible for a concerted strategy to reduce crime. They do not seem to be doing a good job”.
Experts in security consider that the optimum ratio between the number of police and the size of the population is two police officers for every 1,000 inhabitants. In the rest of Orihuela with some 50,000 inhabitants and 100 police officers this ratio would seem to be respected. But in Orihuela Costa, with 30 police officers and 40,000 regular inhabitants the ratio is equal to only one police officer for every 1,300 inhabitants. We are reminded that in summer, the population of the coast exceeds 200,000 and the opportunities for crime multiply accordingly.
C.L.A.R.O. said they were “concerned that the governing party in Orihuela is once again ignoring the interests of Orihuela Costa,” they continued, “ It is not only services and infrastructure in general which have been subject to underinvestment and neglect. Security would seem to fall within the same category”.
"Owners of a house in Guardamar were robbed whilst they slept. Entrance to their property was forced at around dawn last Wednesday morning with thieves stealing 1,500€ in cash, two phones, a video camera, digital camera, MP3 player and the owner’s Seat Ibiza.
It was the second property to be robbed that night with police also receiving reports of a break in in Orito, showing this type of crime whilst the owners are sleeping is on the rise.
Already it has caused social alarm with people checking their security, especially as the summer draws closer when crime is on the increase."
"Probably you are by now, sick of hearing of the crime (mainly burglary) around here and this morning the house next to ours was done, the 7th in ten days! ours last year.
Our president has been to see the police with help from a Spanish resident and been told by them that this sort of crime is not on the list of priorities and nothing will be done about it – nothing!
A lot of people have become very rich due to us ‘victims’ and still are, we deserve better. I think the only way left is to organise some people (me included) to stand at Alicante airport with a big banner saying ‘Don’t bother to invest here, you will lose, crime pays on the Costas’ and then you might see some action from the hundreds of vested interests here, because nobody cares about the situation, they have the dough.
The property market will soon be badly affected by crime.
Yours sincerely,Philip H.Villamartin"
"I am writing this letter hoping you would publish it. I am sure it will be of interest to your readers and remind shoppers at Supermarkets to be on their guard.
My wife and I have lived in Rojales for over five years and although we have suffered some rip offs etc we thought we had escaped the dreaded brief case or hand bag snatch until last Wednesday.
My wife set off to do her shopping at Consum supermarket at Dona Pepa 2, I normally always accompany her, but on this occasion because we had visitors from the UK she went alone.
After she completed her shopping she transferred her shopping into the car, shut the boot, got into the car and put her handbag on the right side seat.
Still with one leg outside the door, a young Spanish man approached her.
In his hand was a euro, he showed her the euro and pointed under the car saying that there was more money there. She told him she would move the car forward, but as she turned her head to start the car, she saw another Spanish youth with her handbag. He had just that very movement took the bag by opening the front car door. This happened within a second or two.
For some unknown reason he immediately handed the bag back to her and then requested two euros which she refused to give him.
She arrived home in a distressed manner. I can only assume these Spanish two lads were amateurs as no professional bag snatcher would have handed the bag back. She was indeed very lucky. So shoppers beware."
I could go on and on and on but this site would be soon filled with similar postings to overflow !
Now, the following are not my words but abstracts from the local ex-pat press during May, 2008.
Read them and draw your own conclusions:
"Arson attack - A worrying incident which took place on 12 May reminded us of the dangers and insecurity of Orihuela Costa.
A car was set on fire only a few metres from the Playa Flamenca office of the Town Hall.
In the same area another similar incident occurred only a few months earlier.
A press release from local political party, C.L.A.R.O., proclaimed, “We hope the police will investigate this incident urgently and tell the public what lies behind these acts. One such incident might suggest vandalism, two would indicate criminality of a much more serious nature”.
There is a growing concern among citizens and business people that crime is rising. All the indicators, ranging from examples of house-breaking, bag snatching and delinquency point in this direction. And in the background, prostitution and car robbery are reminders that organised crime is present in Orihuela Costa.
Residents do not doubt that the police are doing their best but this is within the limits of their capacity.
C.L.A.R.O. commented, “Overall security policy is primarily the responsibility of the Orihuela municipal government. They decide the number of police in Orihuela Costa and they are responsible for a concerted strategy to reduce crime. They do not seem to be doing a good job”.
Experts in security consider that the optimum ratio between the number of police and the size of the population is two police officers for every 1,000 inhabitants. In the rest of Orihuela with some 50,000 inhabitants and 100 police officers this ratio would seem to be respected. But in Orihuela Costa, with 30 police officers and 40,000 regular inhabitants the ratio is equal to only one police officer for every 1,300 inhabitants. We are reminded that in summer, the population of the coast exceeds 200,000 and the opportunities for crime multiply accordingly.
C.L.A.R.O. said they were “concerned that the governing party in Orihuela is once again ignoring the interests of Orihuela Costa,” they continued, “ It is not only services and infrastructure in general which have been subject to underinvestment and neglect. Security would seem to fall within the same category”.
"Owners of a house in Guardamar were robbed whilst they slept. Entrance to their property was forced at around dawn last Wednesday morning with thieves stealing 1,500€ in cash, two phones, a video camera, digital camera, MP3 player and the owner’s Seat Ibiza.
It was the second property to be robbed that night with police also receiving reports of a break in in Orito, showing this type of crime whilst the owners are sleeping is on the rise.
Already it has caused social alarm with people checking their security, especially as the summer draws closer when crime is on the increase."
"Probably you are by now, sick of hearing of the crime (mainly burglary) around here and this morning the house next to ours was done, the 7th in ten days! ours last year.
Our president has been to see the police with help from a Spanish resident and been told by them that this sort of crime is not on the list of priorities and nothing will be done about it – nothing!
A lot of people have become very rich due to us ‘victims’ and still are, we deserve better. I think the only way left is to organise some people (me included) to stand at Alicante airport with a big banner saying ‘Don’t bother to invest here, you will lose, crime pays on the Costas’ and then you might see some action from the hundreds of vested interests here, because nobody cares about the situation, they have the dough.
The property market will soon be badly affected by crime.
Yours sincerely,Philip H.Villamartin"
"I am writing this letter hoping you would publish it. I am sure it will be of interest to your readers and remind shoppers at Supermarkets to be on their guard.
My wife and I have lived in Rojales for over five years and although we have suffered some rip offs etc we thought we had escaped the dreaded brief case or hand bag snatch until last Wednesday.
My wife set off to do her shopping at Consum supermarket at Dona Pepa 2, I normally always accompany her, but on this occasion because we had visitors from the UK she went alone.
After she completed her shopping she transferred her shopping into the car, shut the boot, got into the car and put her handbag on the right side seat.
Still with one leg outside the door, a young Spanish man approached her.
In his hand was a euro, he showed her the euro and pointed under the car saying that there was more money there. She told him she would move the car forward, but as she turned her head to start the car, she saw another Spanish youth with her handbag. He had just that very movement took the bag by opening the front car door. This happened within a second or two.
For some unknown reason he immediately handed the bag back to her and then requested two euros which she refused to give him.
She arrived home in a distressed manner. I can only assume these Spanish two lads were amateurs as no professional bag snatcher would have handed the bag back. She was indeed very lucky. So shoppers beware."
Mugging in La ZeniaBy Contributor (office@theleader.info)(Published: 10/07/2005 Edition No.: 48)
Yesterday, Wednesday, my wife went to withdraw some money from the bank just under your office at 4:15pm. She then walked to the Consum car park for her car. She then drove to the La Zenia hotel to make a phone call. As she got out of the car, a white car approached her asking directions to La Zenia.
One of the men grabbed her bag, but she held onto the strap. The car accelerated, dragging her twenty feet until she had to let go. By a stroke of luck, the man dropped the bag. Seeing this, she got off the ground and ran for the bag whilst they were reversing.
She got the bag and ran towards the La Zenia hotel crying “Help! Help!” as they reversed closer. No way was this woman going to let a bunch of thugs take her hard earned money! Luckily there were people near by and the car sped off. It’s a pity she didn’t get the number. All this happened in seconds.
She suffered some cuts and bruises and, needless to say, shock. So be careful out there, day and night.
Yours sincerely
Ollie Sammon
La Zenia
Mugging in San Miguel By Staff Reporter
The Policia Local in San Miguel de Salinas recovered the car used as a getaway vehicle by two people, believed to be from Romania, who attacked and robbed two people aged 60 and 61 on the Ronda Oeste in the town.
The victims suffered cuts and bruises and had several items stolen.
A campaign began this week at Alicante airport targeting thieves preying on passengers. National police officers, backed up by local officers from Elche, will be carrying out spot checks at entry and exit points in a bid to catch the crooks. The first of these checks was carried out last Tuesday when police checked the identities of people arriving and leaving the airport.
The initiative hopes to crack down on the rising problem of bag snatches, thefts from cars and the punctured tyre trick, which increase during the busy Summer holiday season.
The checks will continue until further notice but a police spokesman add that whilst the checks act as a good deterrent people should always be aware of the potential dangers and take precautions with their belongings and be observant of what is going on around you.
Shopping in large hypermarket in Torrevieja, we parked our MPV in the car park. We packed the shopping in the car and went for lunch. On returning we saw a car parked alongside ours and heard the glass break as the driver of the other car broke into ours via the passenger window. We took the number and maks of car, had an excellent description of the man and although we were not fast enough on our feet to catch him,gave all details to police. Unfortunately there are two sorts of police in Spain and we had to take the details to the other. They were not interested, wouldn't help and we were sent to find an interpreter - no one wanted to help!!! We were informed later that this is common. There is so much crime there that they accept it. We were lucky that they didn't take the car. Never will we go there again and we reccommend anyone to go straight back to the apartment with their groceries. We were advised afterwards that the police must contact the British consul for an interpreter by phone and we could have dictated the details in this fashion.
Torrevieja crime black spot telegraph.co.uk 28-Mar-2008
Torrevieja is an Alicante crime black spot. While many instances of crime are reported every day, there are simply not enough police to deal with them. The Guardia Civil Union AUGC, claim that Torrevieja has a greater crime rate than Madrid.
This from Vecinos Colaborando (Neighbourhood watch)
1) Further to my message regarding thefts at Cash machines, we are hearing of a number in the Orihuela Costa area.
2) The fishermen are about again – The weather is getting warmer and people are leaving windows
open. We are getting reports of rods being used to remove wallets, keys, etc from inside property during the night. Please do not leave such items in view for people outside to see especially if the windows are left open.
3) We are also receiving reports of house doors being forced when they have not been locked properly. A good quality alarm which is connected to a control costs money but can save heartbreak and further cost. The thieves know which alarms are good and not easily disabled.
4) In the shopping areas, the old distraction trick is being used in our area. People, on returning to their car suddenly find a kind person telling them that they have dropped bank notes on the floor as they have got into the car. If this happens, do not be taken in, lock the car doors and drive away. Always beware of attempted distraction thefts especially on car parks. The elderly person asking for assistance, the local official wanting your opinion or you telling you that parking is prohibited or the lost traveller asking directions.
5) Another distraction theft which we have not yet encountered here, is that when it is necessary to reverse from a parking area, the driver finds that these is a piece of paper on his rear window prohibiting his view to the rear. He gets out of his car and is robbed.
6) When withdrawing money from banks, always do not leave the counter or desk before putting money safely away out of sight of other persons inside the bank or looking through bank windows from the street outside.
Vecinos Colaborando - Orihuela Costa - Fw_ BE AWARE OF THIS SCAM AT ATM'S - NEW.eml.eml, ATM_FRAUD.pps
I could go on and on and on but this site would be soon filled with similar postings to overflow !
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