The property promoters
- To have received information from a ‘corredor’ (a kind of intermediate real estate agent) about a small farm, where the farmer was disposed to sell at a low price due to lack of water, and with the assistance of the ‘corredor’ paid a deposit on the land (maybe only 5 to 10% of the total purchasing price, the rest to be handed over on ‘escritura’) and you were in business.
First you talked to the mayor, proposing a scheme to build 100 bungalows on the farmland and an ‘astilla’ (a split) to the mayor of 10% on total sales price, for him getting your scheme approved, paid when the houses was sold.
Then to the local bank director, displaying the purchase option, a rough sketch from an architect where the 100 bungalows could be situated, and relating the promise from the mayor. That would be worth the money you needed to complete the purchase of the land, fees to the architect for a complete plan and the start of the infrastructure work.
With some glossy sales brochures you contacted local real estate offices and promised 10% sales commission, to be paid out when client had paid the first 30% of the sales price. With such commissions, few sales agents bothered to ask for the guarantees of completion, according to law 515 of 21 April 1989.
The pioneers and the followers
An army of property promoters were the pioneers in the ‘Decennium of Greed’. They demonstrated how a potato field or some scrub land could be picked up from local farmers for a nickel and turned into building land for hundreds or thousands of dwellings with valuations that placed some of them on the list of the thousand wealthiest people on the globe.
- For the past four years the leaders of the sector are sitting on a great heap of unsaleable dwellings waiting for the foreign buyers to come back…..
They were closely followed by the bankers, from small saving banks to the two global players. A promoter with a purchasing option for a piece of land where the local mayor (or some other influential politician) was willing to grant the approval for a mega project – 1,000 dwellings and a golf course or two – would be flushed with money that the banks themselves got in great quantities, at only 1% interest from the European Central Bank.
That the bankers in their immeasurable greed broke most of the rules of prudent banking management is very clear today. They granted financing to promoters who did not have a title deed to the land where the mega project was supposed to be built, they paid out great sums of money for infrastructure before the project had been given approval from the town hall, or the regional authorities
The banking sector is now sitting on so much bricks and mortar, that some of them will not be able to comply with the new requirements from the Government to set aside capital to cover the fall in the value of their property assets. Good riddance to them, as long as no small savers are being squeezed!
Not to forget the politicians!
Of course, the decennium of greed could not have started without corrupt politicians. If there is something Spain has enough of, it is such politicians, at local, provincial, regional and national level, from all parties and all parts of the country. I have had to write about them to the point of nausea.
They prepared the ground for the greed that has pervaded Spanish society over the last decennium, the decennium of greed.
Round Town News: 23/02/12:
(Another Spanish) Dreamhome horror
IMAGINE BUYING your dream home in the sun and paying for it in full only to have it re-mortgaged by a rogue builder before being repossessed? This nightmare scenario is a reality for more than a dozen homeowners who bought properties on Bosque del Lomas III from Tecnologia Urbanistica.
RTN met with Iwan and Jill Williams last week, who arrived for a half term break in the sun to be greeted with a two foot high pile of official documents on their doorstep; papers from the Orihuela Judicial Court stating their property was to be repossessed by the CAM bank as part of their lawsuit to reclaim €4,885,000 in debt from the owner of the now defunct property developers.
According to the document, Iwan and Jill’s house had been re-mortgaged by the owner of the company for €77,000 - accumulated to €132,883 with interest that is increasing daily.
POWER OF ATTORNEY
61 other properties in the community 15 of which were paid for in full were ‘re-mortgaged’ by the rogue developer. Iwan explained: “We bought the house in 2004 for €150,000 through the estate agents, Atlas. They recommended Aroca solicitors and we gave them power of attorney to deal with the purchase.”
The couple then moved into the property and set about on a four year battle to get their deeds from the developer. Every time they came over on holiday, they would enquire with the solicitor as to where the deeds were and every time they were fobbed off. So they found new solicitors that unfortunately turned out to be best friends with the solicitors of the property developer - so nothing was done.
JEOPARDY
The deeds were used by Emilio, the owner of Tecnologia Urbanistica, to remortgage the properties to enable him to buy more land to develop. When the property boom went bust he couldn’t afford to repay these mortgages. He then conveniently disappeared to Brazil. As CAM, purchased by Banco Sabadell for €1, couldn’t recover their €4.8 million plus interest from Tecnologia, they filed a lawsuit to repossess the properties mortgaged; of which Iwan and Jill’s is one.
Meanwhile, the couple’s new solicitor advised them to remove their belongings from the property; she suspects the house will have been taken by the time they return for their summer holidays.
And as if that is not bad enough, Iwan said: “House prices here are rock bottom so even if they sell they will only get 60,000€ maximum - so what happens to the rest of the debt? They could still come after the remainder and our UK home would also be in jeopardy.”
RTN has contacted all the other homeowners listed on the court documents and will be liaising with them to help find a solution to this scandalous situation.
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