How to buy a Spanish second home at below market value

How to buy a Spanish second home at below market value

Spain
  • Financial crash fallout still being felt, leading to opportunities for buyers
  • CostaLuz Lawyers negotiating unique solutions between sellers, banks and buyers
  • Spanish house prices still 32% (inflation-adjusted) below peak (Global Property Guide)

Despite it being now nearly 15 years since the global financial crisis, the fallout is still being felt in the Spanish property market. Property law specialists CostaLuz Lawyers report that many homeowners continue to pay eye-watering mortgage payments for properties that have devalued by as much as 40%.

Figures from the Global Property Guide’s January 2021 update on Spain show that nationally the country’s house prices are around 23% below peak levels – or 32% below when adjusted for inflation. In coastal areas where prices soared in the boom years, this figure can be much higher. 

“We’re working with a number of property owners who are in negative equity and looking for a quick exit from their property ownership. Rather than getting to the point of repossession by the bank – which neither the owner nor the bank wants – we are acting to find buyers to step in and purchase the property. With the right legal arguments, we’ve found that many banks are willing to accept a buyer at prices below market value in order to progress a sale and avoid repossession.”

Keith Rule, www.costaluzlawyers.com

For buyers these days, prices and interest rates are a totally different story than they were during the boom years. Those seeking second homes, or even primary residences, in popular tourist areas have some superb deals available when they buy using the CostaLuz Lawyers service.

For sellers and banks, the service usually provides the only solution other than repossession. With property values below the level of the outstanding mortgage debt, sale on the open market is not a realistic option. However, an easy sale, presented by legal property experts making just the right arguments, can work for all concerned.

“We’ve been negotiating these kinds of deals between sellers, banks and buyers since 2012. With nearly a decade of experience in this area, we are well placed to help buyers achieve the prices they need. This frees sellers from their negative equity position and saves banks the time and expense of repossessing and then selling the properties themselves. We would certainly encourage any buyer looking for particularly good value to consider this route into Spanish property ownership.”

Keith Rule, www.costaluzlawyers.com

For more information, please contact CostaLuz Lawyers’ UK office on +44 1908 635 111 and speak with Keith. To speak with Maria in the Spanish office, call +34 956 092 687 or you can visit www.costaluzlawyers.es

Is a buying a Spanish ghost town the ultimate social distancing project?

Is a buying a Spanish ghost town the ultimate social distancing project?

Spain
  • Rural hamlets and unfinished developments provide plenty of choice for buyers looking for a project
  • CostaLuz Lawyers warns of the importance of checking legal and practical details before committing to buy
  • Planning permission, licences and zoning all need careful attention

The Covid-19 pandemic has made many city dwellers reassess their relationship with all things urban. In June and July 2020, buyer inquiries to Rightmove from those living in cities shot up by 78% compared to the previous year. The number of people considering properties in village locations, meanwhile, was up 126%.

It’s not just villages in the UK that are attractive to buyers looking to escape city life right now. According to the property experts at CostaLuz Lawyers, Spain has much to offer when it comes to escaping the pandemic, particularly for those looking to detach from urban life in a more substantial way.

“Spain is home to around 1,500 abandoned hamlets due to significant rural depopulation over the past couple of decades. These offer a fascinating opportunity for property buyers who want to opt out of city life and reconnect with the land. And with so many hamlets available, the prices can be really quite attractive.”

Keith Rule, www.costaluzlawyers.com

Rural depopulation is a big issue in Spain, where over half the country has a population density of under 12.5 inhabitants per square kilometre. Prime Minister Pedro Sanchez reports that, “Half of Spain’s municipalities have fewer than 1,000 inhabitants, and a large part of our territory is at risk of depopulation.” As such, abandoned hamlets – of ‘ghost towns’ can be found dotted across the country.

But buying your own Spanish ghost town isn’t just about ancient farmhouses that are slowly crumbling in idyllic rural locations. When the global financial crisis hit, a swathe of developers across Spain went bust, leaving housing projects of all shapes and sizes unfinished. Some have little more than foundations in place, but others are almost finished. Most are now owned by the banks that took them on from bankrupt developers. As the sites are too expensive to demolish, most are just sitting unfinished, with nothing having happened since workers downed tools when the financial crisis began to bite.

“There are various options available if you want to purchase multiple properties in Spain at a majorly discounted price. In most cases, you’ll be taking on a project rather than a completed set of dwellings, but for buyers who are looking for something unusual some of the opportunities are really interesting.”

Keith Rule, www.costaluzlawyers.com

The CostaLuz Lawyers team warns, though, that it’s important to examine both the legalities and the practicalities of your purchase before committing to anything. First and foremost, there are matters around planning permission, licencing and zoning to consider. Many rural properties, for example, may have been built without the correct permissions in place. This means you might be ordered to tear them down. Others will have restrictions in place on the scale of renovations that you’re allowed to undertake due to protections on the character or nature of the dwellings.

Zoning has its own quirks. You might have a country spa or a glamping business in mind, but if the land is zoned for rural use then you might find yourself needing to run a farm instead. Even residential use might be out of the question without keeping a few sheep or growing a couple of crops on your land.

In terms of practicalities, the CostaLuz Lawyers team warns buyers never to make assumptions. It’s all too easy to take utilities – water, energy, broadband – for granted, but some abandoned hamlets don’t provide access to all of these. Some don’t even come with the potential for such connections.

There are other risks too, so it’s essential to look at the property transaction from all angles. Getting seven or eight houses and various outbuildings for under €100,000 may seem attractive initially, but if the legal and practical details don’t stack up, the potential can quickly unravel.

“The final element to consider is your exit strategy. Owning a village that’s a major project might be your dream right now, but what happens if you need to sell it suddenly or unexpectedly? With an estimated 3.4 million unoccupied properties in Spain, it could take years to find another buyer. It really is essential to check every aspect of such a purchase before committing. That said, if you find the right property and enjoy a challenge, buying a Spanish ghost town might just be the ideal social distancing project.”

Keith Rule, www.costaluzlawyers.com

For more information, please contact CostaLuz Lawyers’ UK office on +44 1908 635 111 and speak with Keith. To speak with Maria in the Spanish office, call +34 956 092 687 or you can visit www.costaluzlawyers.es

Trapped in your timeshare? CostaLuz Lawyers offers fresh hope to burdened families

Trapped in your timeshare? CostaLuz Lawyers offers fresh hope to burdened families

Spain
  • Many clients still paying maintenance fees for illegal and unwanted timeshare contracts
  • Issuing a legal statement on the client’s rights is often sufficient to cease payments
  • Spanish law supports buyers’ interests when it comes to timeshare purchases

“We often think of timeshares as an issue of the past, but there are still so many families who are trapped in them and either don’t want them or can’t afford them. What’s most shocking is that many of those families are trapped in their contracts illegally. We have a good deal of experience of this and want to let people know that they may be able to take action to get out of such schemes.”

Keith Rule, www.costaluzlawyers.com

Timeshares took off as a way for multiple individuals to share the rights to use a holiday property back in the 1960s. By the mid-1970s the business model was well-established and increasingly popular in both the US and Europe. Globally, the industry continues to expand, with MarketWatch reporting the global vacation ownership (timeshare) market to have a value of USD 15620 million in 2019. That figure was projected (as at December 2020) to rise to USD 25720 million by the end of 2026.

However, the history of timeshares has been littered with scandals, as well as with treasured holiday memories. Between mis-selling and families becoming trapped in unsellable contracts, timeshares have caused plenty of distress over the years. The cross-border nature of the timeshare transaction process has also caused issues.

“Timeshares make a very interesting study from a legal perspective. The number of abusive, corrupt companies located in tax havens that are involved is truly eye-opening. Thankfully, case law is very much on the buyers’ side, at least in Europe where a Directive on timeshares has supported buyers’ interests.”

Keith Rule, www.costaluzlawyers.com

According to CostaLuz Lawyers, Spanish law has established that if the timeshare complex is in Spain, then Spanish law governs the contract. The law in Spain relating to timeshares has changed twice in recent years. Law 42/1998 was enacted to protect buyers. Then, in 2015, the Spanish Supreme Court ruled that any contract lasting for 50+ years (including all those ‘in perpetuity) and signed after 5 January 1999 was illegal, as all such contracts had to be for 50 years or under.

For those stuck in timeshare contracts that they can’t afford or simply don’t want, the CostaLuz Lawyers team advises investigating the available options. The number of contracts that Spanish judges have ruled are null and void means that many owners do have a choice about remaining in their contracts.

“In many instances, all it takes to get clients out of the illegal timeshare contracts in which they are trapped is the issuing of a legal statement in relation to the null character of the contracts, along with cessation of maintenance fee payments. Very few timeshare companies take the matter any further. At the other end of the spectrum, very few sign a settlement agreement, either. Most simply leaving the matter un-concluded but with contract holders no longer having to pay.”

Keith Rule, www.costaluzlawyers.com

In the CostaLuz Lawyers’ team’s experience, this situation is just fine with the majority of those seeking to escape their illegal and/or burdensome timeshare contracts. Most don’t have the will to pursue the timeshare company to claim back the amount they’ve invested, despite there being scope in Spanish law for them to do so. Instead, the majority of clients simply want to stop paying their maintenance fees and forget about the issue entirely.

While there is occasional pushback from one of the timeshare companies, this is usually swiftly dealt with through a reiteration of the client’s rights and the relevant case law.

 “Unwanted timeshares don’t have to be the millstone that those forced to make regular maintenance payments might assume. It’s always worth finding out if the option to escape the contract exists.”

Keith Rule, www.costaluzlawyers.com

For more information, please contact CostaLuz Lawyers’ UK office on +44 1908 635 111 and speak with Keith. To speak with Maria in the Spanish office, call +34 956 092 687 or you can visit www.costaluzlawyers.es

How to buy a home in Spain safely during lockdown

How to buy a home in Spain safely during lockdown

Spain
  • British appetite for holidays and second homes in Spain remains strong
  • CostaLuz Lawyers walks buyers through safe online buying practices
  • Pre-foreclosure purchases deliver savings of up to 60%

The Covid-19 pandemic has done little to quell the long-term British love for Spain. In fact, the idea of lounging on a beach in the sunshine holds a great deal more appeal when it is so far out of reach. As Spanish tourism board officer in London, Javier Piñanes, recently pointed out:

“There is a strong desire to travel on the part of the British and they emphasize that Spain is the destination they want to travel to, it is their top destination for holiday.”

Nor is it just holidays that Brits are dreaming of during lockdown. Recently reported figures from Taylor Wimpey España observed an increase of 39% in website traffic during the first week of 2021, compared to the same week a year earlier.

But with travel restrictions in place that, currently, have no end in sight, how can British buyers turn their dream of holiday home ownership into reality?

According to CostaLuz Lawyers, with the right safeguards in place, it is perfectly possible to buy a Spanish property safely online during the lockdown. While buyers can’t visit the property and the local area in person, they can research to their hearts’ content online. Key to doing so safely is to engage an independent lawyer early in the process.  

 “The right lawyer can be invaluable in terms of helping you choose a Spanish property. They can help you to work with reputable, honest and reasonably priced agents, arrange a surveyor, check all required paperwork is in place and do the conveyancing and post-sale work. Not only that, but your transaction will be covered by the law firm’s professional indemnity insurance and title insurance, for added peace of mind.”

Keith Rule, www.costaluzlawyers.com

Locating the right agent through whom to buy is half of the battle. Plenty of British buyers have been burned attempting to buy property in Spain before now. The CostaLuz Lawyers team can attest to this. They have won almost 850 claims from Spanish property developers and banks, with many cases brought by buyers who paid substantial deposits during the pre-crash years, but never received a completed property. Many of these cases are still working their way through the courts now, some 10 to 15 years after the deposits were lost – in 2020, CostaLuz Lawyers won 51 cases for a total of 76 clients, despite the shutdown and reduced operation of the Spanish legal system for extended periods during the year.

These cases highlight how essential it is to find the right agent, which is something that an independent property lawyer can assist with. Not only that, but the right legal representation can also open doors to potential cost savings. CostaLuz Lawyers, for example, operates a service that connects British owners of negative equity homes in Spain – those who are facing foreclosure in the near future – with buyers in the UK. The service enables the seller and buyer to agree a below market value price that avoids foreclosure, keeping everyone happy (including the bank). In some cases, this service has seen buyers pick up homes for around 60% of the price paid for them back in 2007.

“Buying during the pandemic means finding new ways to view properties and engage with the purchase process. It can also deliver some excellent bargains. And what better way to finally celebrate the lifting of travel restrictions, whenever that may be, than to visit your new holiday home?”

Keith Rule, www.costaluzlawyers.com

For more information, please contact CostaLuz Lawyers’ UK office on +44 1908 635 111 and speak with Keith. To speak with Maria in the Spanish office, call +34 956 092 687 or you can visit www.costaluzlawyers.es

All is not lost for owners of ‘illegal’ properties in Spain

All is not lost for owners of ‘illegal’ properties in Spain

Spain
  • CostaLuz Lawyers highlights potential to take action against banks
  • ‘Illegal’ property owners can claim for refund of off-plan deposit
  • Claims not subject to December 2020 deadline that applied to many other owners

The Spanish property experts at CostaLuz Lawyers have reached out to owners of ‘illegal’ properties in Spain to reassure them that all is not lost. The team has highlighted the potential for owners of these properties to make a claim against their developer’s bank for a refund of their off-plan deposit. Not only that, but if the buyer subrogated the developer’s mortgage, they can also claim for all mortgage repayments.

Action can be taken against liable banks under Law 57/1968, with no deadline in place for making such claims, yet few of those impacted are aware of the full extent of their right to a refund.

An illegal Spanish property is one that did not have the proper planning permission, building licences or other paperwork in place at the time the client paid their off-plan deposit. Many buyers moved into such properties following the building boom of the early to mid-2000s, either paying for them in full or taking on large mortgages. These buyers now have recourse to legal action to reclaim the deposits that they paid – along with interest and legal fees.

“We’ve been hugely successful in winning back some €25 million for Spanish property buyers who lost deposits to developers who went bust. The deadline for such claims under Law 57/1968 was 28 December 2020. However, claims for the return of off-plan deposits paid on illegal properties, and for mortgage payments where the buyer subrogated the developer’s mortgage, are not subject to this deadline; they’re not subject to any deadline at all.”

Keith Rule, www.costaluzlawyers.com

Owners can claim against the developer’s bank or insurer for a refund of any deposit that they paid prior to the legally required paperwork being in place. This applies even when no contract exists, as the Spanish Supreme Court has deemed that lack of consent means no time-barring can be applied.

Despite many of those who are eligible to claim having purchased their properties 15+ years ago, it was 2013 before the Supreme Court stated that ‘finishing’ a property means not just building it but also having all of the legal paperwork in place. And it wasn’t until 2016 that the court clarified that planning illegalities were a matter that fell under the purview of Law 57/68.

“There is clear case law to support the claiming of refunds of deposits paid on illegal properties and in some instances of mortgage repayments as well. The Spanish justice system can move slowly but this doesn’t mean that it is not worth pursuing a case. The return of a deposit, along with 15+ years’ worth of interest, can equate to a lump sum that feels well worth the wait.”

Keith Rule, www.costaluzlawyers.com

For more information, please contact CostaLuz Lawyers’ UK office on +44 1908 635 111 and speak with Keith. To speak with Maria in the Spanish office, call +34 956 092 687 or you can visit www.costaluzlawyers.es

BREAKING NEWS! Spain allows British expats to apply for residency post-Brexit

BREAKING NEWS! Spain allows British expats to apply for residency post-Brexit

Spain
  • Brits who missed TIE residency document application deadline can still apply
  • CostaLuz Lawyers highlights positive implications of the decision
  • Those with family links in Spain may also be able to apply for residency

Brexit may be well and truly done, but British citizens residing in Spain who have yet to complete the necessary paperwork have just been thrown a lifeline by the Spanish authorities. The government has announced that those who can prove they lived in Spain prior to 31 December 2020 may still apply for residency there.

Immigration officials have been instructed to follow the same procedure as they did for those applying for residency before the December deadline, though with particular attention paid to documentation that proves the individuals’ residency pre-dated the end of 2020.

Keith Rule of pioneering law firm CostaLuz Lawyers comments:

“This is excellent news for UK citizens who, for whatever reason, have yet to make their residency in Spain official. They can now apply for the TIE residency document without fear of reprisals or penalties for having missed the 31 December 2020 deadline. The move is a key signal of the value that Spain places on its long-standing relationship with the UK and a positive indicator for post-Brexit relations.”

The Spanish guidance states that British citizens arriving in Spain as of 1 January 2021 can also apply for residency in certain situations, such as if they have a family link with a beneficiary of the Withdrawal Agreement.

“All of this spells good news for a close relationship between Spain and the UK over the coming years,” continues CostaLuz Lawyers’ Keith Rule. “There are hundreds of thousands of British expats living in Spain, while some 18 million Brits spend their holidays here each year. Making it easier for residents to obtain the TIE, despite missing the deadline, should be well received by both expats here in Spain and policymakers back home in the UK.”

For more information, please contact CostaLuz Lawyers’ UK office on +44 1908 635 111 and speak with Keith. To speak with Maria in the Spanish office, call +34 956 092 687 or you can visit www.costaluzlawyers.es

CostaLuz Lawyers wins millions for retirees who thought their money was gone for good

CostaLuz Lawyers wins millions for retirees who thought their money was gone for good

Spain
  • Spanish law firm has won nearly 500 cases for those who lost off-plan deposits
  • Total wins for property owners now exceed €25 million
  • Returned funds have given many retirees a significant boost

Losing tens of thousands of pounds can transform a dream retirement into a nightmare. Yet losing such sums became an all too familiar tale back in the mid-2000s, when the Spanish property market crashed. The global financial crisis meant that many second home buyers’ dreams of a sun-kissed retirement on the golf course or the beach instead turned into protracted legal battles.

For Brenda Wilkinson from Belfast, the dream was to buy a property overlooking the 18th hole at Sierra Golf in Murcia. Her husband was a keen golfer and the couple were looking for a holiday home that had the potential to serve as a retirement property.

Brenda paid £42,000 to Iberian International as a deposit but a visit to the site in 2008 to finalise the purchase revealed a poorly constructed home with an ‘underbuild’ that was full of mud. A neighbouring owner confided in Brenda that her own property was a mud-filled disaster.

Despite feeling pressured to sign the paperwork, Brenda refused, instead writing a list of complaints to the company. Nothing was done as a result of her complaints and, despite paying a solicitor, Brenda was unable to get her money back.

Brenda’s experience echoes that of John and Noleen Parkes, from Norfolk. Now in their mid-seventies, the couple paid €77,000 as a deposit on a property in La Marine, Alicante in February 2008, where they planned to live. When their developer failed to deliver, their lawyer informed them that there was no effective form of redress and that their money was lost.

Yet there was hope on the horizon. Brenda, who turns 64 this month, came across CostaLuz Lawyers, as did John and Noleen. The firm had grabbed property press headlines back in 2012 with a class action court victory over Finca Parcs, which saw almost €1.5 million in ‘lost’ deposits returned to Spanish second home buyers, many of them from the UK.

“We were delighted to act on behalf of Brenda and of John and Noleen, to try and win back their money and hopefully make a difference to their retirement plans. The Spanish justice system can move slowly but we were confident that both cases stood a good chance of successful outcomes, given the injustice of the claimants’ experiences.”

Keith Rule, www.costaluzlawyers.com

Both court cases, as expected, took several years to navigate the legal system. Brenda was delighted when, in June 2019, she received her full £42,000 deposit back. Additional payments awarded in October 2019 and August 2020 took that total up to over £50,000 including interest and costs.

In John and Noleen’s case, which has so far spent six years working its way through the Spanish legal system, CostaLuz Lawyers has already won back 75% of their deposit. A parallel court case is still being pursued and John and Noleen are confident that this separate and final case will also be brought to a successful conclusion.

“Many of our friends, whilst supportive, I suspect have quietly thought we were delusional in ever thinking we would recover our deposit. But we have done it. To say we are pleased and relieved is an understatement! We are very grateful and appreciative for the work CostaLuz Lawyers has done, and is continuing to do, on our behalf.”

John Parkes

While the deadline has now passed for those who lost off-plan deposits in the mid-2000s to initiate legal action, the CostaLuz Lawyers team remains busy with around 200 cases still in progress. The company is also working with those who have lost money in a range of other situations, from timeshares to mortgage prisoners trapped in negative equity for over a decade. In total, the company has won over €25 million for those who paid deposits on homes that were never finished or built, making a huge difference to many claimants’ retirement plans, often as much as a decade after they thought their money was gone for good.

For more information, please contact CostaLuz Lawyers’ UK office on +44 1908 635 111 and speak with Keith. To speak with Maria in the Spanish office, call +34 956 092 687 or you can visit www.costaluzlawyers.es

Own a home in Spain? What will Brexit mean for you?

Own a home in Spain? What will Brexit mean for you?

Spain
  • Property law firm shares expert advice as deadline looms
  • Many British property owners seeking clarification on Brexit’s likely impact
  • Just days left for Britons in Spain to apply for residency

There’s been plenty of talk about how Brexit will impact Britons’ ability to go on holiday within the EU from 1 January 2021 onwards but what about those who own property there? Brexit tasks are, of course, ongoing, but in response to a wide range of queries from anxious British owners of property in Spain, the experts at CostaLuz Lawyers have shared their insights into what Brexit will and won’t affect, based on what we know so far.

“We’ve been responding to plenty of queries about residency over the course of this year but also about property ownership in Spain and how that is affected. As the Brexit deadline looms, many property owners’ concerns are increasing, so we wanted to share some detail about what the future holds in order to allay property owners’ concerns – and those of anyone looking to buy property in Spain in 2021 as well.”

Keith Rule, www.costaluzlawyers.com

Will the property purchase process change as a result of Brexit?

No. Britons who buy property in Spain will still have to follow the same purchase process.

I own property in Spain – will Brexit affect my rights as a homeowner?

No, it won’t.  Property rights are never linked to residency status.  All owners of property in Spain have the same rights and obligations, regardless of where they are from.

Are there any tax implications?

There aren’t any tax implications in relation to property ownership. However, the rate of non-resident income tax that British nationals have to pay will increase from 19% to 24% from 1 January 2021. This is because Spain, along with other EU countries, distinguishes between EEA and non-EEA nationals.

How long can I stay in my Spanish property after Brexit?

From 1 January 2021, rules regarding the length of your stay in Spain will change. You will no longer be allowed to stay for more than 90 days at a time in a 180-day period.

Note that the 90 days starts as soon as you enter the Schengen Area. This means that if you travel to Spain via France, for example, the time you spend in France counts towards your tally of 90 days.

What if I want to stay for longer – can I join two periods of 90 days?

No. At present you can only spend up to 90 days in Spain, then you must leave the country. You will then not be able to return to the Schengen Area until 180 days have passed since your date of entry into Spain (or elsewhere in the Schengen Area).

You can, however, divide the 90-day period into smaller chunks, for example by spending two periods of 45 days each in Spain.

Does the 90-day rule apply even if I own property in Spain?

Yes, it does. Spain may, of course, introduce new legislation to favour British property owners and allow them to spend longer periods of time in the country. However, at present the government has not announced any new rules.

Will Brexit affect my rights as a homeowner in Spain?

No. The UK’s decision to leave the EU does not affect homeownership rights in Spain. These will continue to be the same as they were prior to Brexit.

Will my NIE change when the UK leaves the EU?

No. Your NIE (foreigner’s identification number) is valid throughout your lifetime and does not change.

What if I am officially resident?

If you have a Spanish residence permit (known as the Tarjeta de Identidad Extranjero/TIE), your status falls under the Withdrawal Agreement set up between the UK and EU. This means your rights in Spain and the rest of the EU do not change after Brexit.

What if I live in Spain but am not officially resident?

In this case, you need to act fast. Very fast. You have until 31 December 2020 to apply for residency. If you don’t, you won’t enjoy the same benefits as other EU citizens in Spain.

Note that, on 4 July 2020, the Spanish authorities introduced a new residency card for British nationals in Spain. Known as the TIE (tarjeta de identidad de extranjero), the card expressly states that the holder is a beneficiary of the Withdrawal Agreement between the UK and the EU. It also confirms the holder’s right to live in Spain.

“There is bound to be a period of adjustment following 1 January 2021 for Britons who own property in Spain, particularly for those impacted by the 90-day rule. It’s important for property owners to stay abreast of any further developments over the course of 2021 (and beyond) to ensure that they are fully aware of their rights and obligations.”

Keith Rule, www.costaluzlawyers.com

For more information, please contact CostaLuz Lawyers’ UK office on +44 1908 635 111 and speak with Keith. To speak with Maria in the Spanish office, call +34 956 092 687 or you can visit www.costaluzlawyers.es

Shock announcement on mortgage expenses leaves Spanish property owners reeling

Shock announcement on mortgage expenses leaves Spanish property owners reeling

Spain
  • Government announces deadline of 21 January 2021 for mortgage-related cases against banks
  • Consumer law experts incensed
  • CostaLuz Lawyers appealing to all those impacted to take immediate action

Spain’s Ministry of Consumer Affairs has caused controversy with a shock announcement on mortgage-related cases against banks. The government department issued a notice via social media that the final deadline for all such claims would be 21 January 2021. The surprising decision has riled consumer law experts, as well as those across the property sector.

“Nobody really saw this coming. The announcement itself, with its talk of judicial deadlines, is very unusual. There was already a huge lack of clarity on this issue and this short-notice deadline by which mortgage holders must take action is adding fuel to the fire.”

Keith Rule, CostaLuz Lawyers

The issue in question relates to an oft-included clause in mortgage contracts issued by Spanish banks. The clause requires the mortgage holder to pay all mortgage-related expenses, including IAJD tax (mortgage tax/stamp duty), notary and land registry fees. However, on 21 January 2016, the Supreme Court ruled that this was unfair on the mortgage holder and that the cost should not be solely borne by them. This was because many of those expenses were in place in order to protect the bank issuing the mortgage, rather than the borrower.

The 2016 ruling opened the doors for mortgage holders to begin claiming such expenses – often amounting to several thousand euros – back from their banks. A ruling on 26 October 2020 then clarified further that the expenses should be split as:

Now, less than two months after this clarification, the government has announced a final deadline for making claims of 21 January 2021 (this being five years after the initial ruling).

The team at CostaLuz Lawyers points out that this short-notice deadline, given just before many people start to relax for the Christmas break, means that thousands of potential claimants will miss out on the chance to reclaim money that is rightfully theirs.

“The lack of notice of this final deadline by which mortgage holders must begin legal proceedings feels like the government giving a Christmas gift to the banks. We would call on all those with the potential to make a claim to act immediately and spread the word to others in the same position.”

Keith Rule, CostaLuz Lawyers

For more information, please contact CostaLuz Lawyers’ UK office on +44 1908 635 111 and speak with Keith. To speak with Maria in the Spanish office, call +34 956 092 687 or you can visit www.costaluzlawyers.es

COVID can’t stop justice as €25 million now won for Spanish property owners by CostaLuz Lawyers

COVID can’t stop justice as €25 million now won for Spanish property owners by CostaLuz Lawyers

Spain
  • 500 cases now won using 50-year-old Spanish law
  • Cases for 71 clients won in 2020 despite COVID-19 disruption to courts
  • Decade-long cases see some clients spending entire retirement years fighting for justice

Spanish property law firm CostaLuz Lawyers has announced the recovery of €25 million for clients who paid deposits on homes that were never built (or finished) due to the global financial crisis back in 2007/08.

With another 200 cases in progress, the company expects that figure to rise significantly over the months and years ahead, despite the fact that 28 December 2020 marks the final date for buyers in this position to start legal proceedings.

“Since our first landmark victory using Law 57/1968 back in 2012, when we won €1.5 million plus costs and fees, we’ve won around 500 cases for clients who thought their deposits were gone forever. With some cases taking as long as a decade, this really highlights the value of persistence when it comes to navigating the Spanish legal system.”

Keith Rule, www.costaluzlawyers.com

47 of those wins, representing a total of 71 clients, have been won in 2020. That means the CostaLuz Lawyers team has won approximately €3.5 million this year alone, despite courts closing and other significant disruption due to the COVID-19 pandemic.

With cases taking as long as a decade to work their way through the courts, some of the clients that CostaLuz Lawyers is winning money back for are now in their 80s. Many were on the verge of retirement when they originally put deposits down on their dream Spanish homes back in the boom years of 2004 to 2008. They’ve since spent years of their retirement fighting for justice.

Other of CostaLuz Lawyers’ clients are just approaching retirement now – a prospect made vastly more appealing by wins representing tens of thousands of pounds. Chris Nairn, for example, was 50 when he first paid a deposit of around €125,000 for a property in Murcia. When the developer didn’t deliver on time, Chris asked for his deposit back. He finally got it back – plus interest and fees – a full decade later, thanks to the CostaLuz Lawyers team.

“When I first bought, putting down a 30% deposit, it was a dream come true, but the property was not completed on time and the nightmare began. CostaLuz Lawyers warned me the road ahead would be long and tough and that Spanish Law is complex and not easy to navigate. It took 10 years, with a lot of ups and downs, but I remembered what they said and held firm. Finally, we got our money back with interest.”

Chris Nairn, client of www.costaluzlawyers.com

The majority of those who have won their money back had put deposits down on properties on the Costa del Sol and Costa Blanca. However, CostaLuz Lawyers has also successfully represented clients in relation to off-plan properties on the Costa del Azahar, Costa Brava and inland. Most hail from the UK and Ireland originally, along with a number of Spanish nationals and residents from elsewhere in Europe.

“There is just a handful of days left for buyers who lost deposits to initiate legal proceedings. It can be a long, arduous process to obtain a refund, but with so much at stake, it’s a process that’s worth persevering with. The sums of money in question, particularly once interest and fees are factored in, can make a huge difference to the course of people’s retirement years.”

Keith Rule, www.costaluzlawyers.com

For more information, please contact CostaLuz Lawyers’ UK office on +44 1908 635 111 and speak with Keith. To speak with Maria in the Spanish office, call +34 956 092 687 or you can visit www.costaluzlawyers.es