Brits in Spain turn to the law
Lawyers who specialize in recovering deposits for property buyers in Spain who have seen the companies with whom they have invested go bust have reported a strong upturn in the numbers of clients requesting their services. Recent news of some of the bigger names in the Spanish property development industry disappearing into administration have been cited as one of the reasons for this increase in business, as investors seek to get back whatever they can for properties they fell are unlikely ever to be built.
Martin de la Herran, of the Spanish law firm Abolex, told the Daily Telegraph: "I've now got dozens of British clients who all want to know where they stand." The problems associated with companies going to the wall as the global economic slowdown advances across Europe are largely to blame, and buyers are seeking to start proceedings as quickly as possible to recover much-needed funds.
Many buyers will see their development left half-built, or will never see anything more than the bare site of the proposed project, despite the fact that some have already paid for the majority of their property. One of the biggest challenges with trying to get money back from defunct developers is the lack of speedy movement from the Spanish courts, meaning that many people will still be fighting for the return of deposits and staged payments for many years to come.
A situation that was already difficult was last week exacerbated by the announcement that developer Martinsa-Fadesa, responsible for some of the largest projects of tourist properties being built in the country, was to cease trading amid huge debts and stagnant sales. Thousands of people have been affected by this collapse, one of the largest to hit the international property market.
The past weeks have seen a fundamental change in how the property market in Spain is reacting to the global credit crunch. When agents selling new properties have goner bust in the past, the effects on ordinary buyers can be smaller than anticipated as the developers continue to build and sell without the involvement of the ‘middle man.’ When it is the developers themselves who are going to the wall, the actual completion of properties is threatened to a far greater extent.