The three largest banks in Spain by market value have unveiled the steps they will take over the course of 2012 to comply with new government regulations relating to the provisions they need to make to cover real estate losses.

Banco Santander, which announced last week it had set aside an additional €1.8 billion (£1.5 billion) to meet losses on repossessed homes in Spain, is due to add a further €2.3 billion to this pot.

Banco Bilbao Vizcaya Argentaria (BBVA) intends to make provisions of around €1.4 billion, in addition to money it had already earmarked for this purpose ahead of the Spanish government's announcement.

BBVA added its strong performance in 2011 means it will be able to "entirely absorb" the sum in 2012.

Finally, Caixabank has stated it will find an extra €2.4 billion to cover its Spanish real estate assets.

Speaking to Reuters, financial director at BBVA Manuel Gonzalez Cid commented: "These are the strongest banks in the Spanish financial sector so it's not surprising they can manage the [requirements] through generic provisions or by bringing forward other capital buffers."

Moody's recently announced it had downgraded Catalunya Banc and Bankia's debt and deposit ratings over concerns that the financial institutions will be unable to meet the higher provisions for real estate losses laid out by the government.

The new regulations relating to obtaining a Numero de Identificacion de Extranjero (NIE) in Spain won't have an adverse effect on the property market.

This is the opinion of Chris Mercer, of real estate agency Mercers, who believes, while the bureaucracy may be frustrating, it won't put serious buyers off.

Since January 3rd 2012, all foreigners have been required to attend the local police station in person to receive an NIE - an identity number for tax purposes - which is needed to buy or sell property in Spain.

Before this year, it was possible to send a lawyer in your place by signing a power of attorney.

Mr Mercer commented: "Admittedly, it can be a hassle, but if people are pre-warned and prepared they simply accept it."

He added most people "don't mind a few tedious hours at a police station to get the home of their dreams".

It appears Brits are still keen to purchase real estate in Spain, after a recent survey conducted by A Place in the Sun magazine at two of its exhibitions revealed the nation is the top choice among many potential buyers looking for a home overseas.

Anyone who is considering investing in property in Spain needs to make sure they carry out plenty of research, it has been asserted.

Editor of A Place in the Sun magazine Liz Rowlinson explained that the systems used for real estate transactions are often "unfamiliar" and it is therefore sensible to find out as much as possible about the process before proceeding.

She stressed the importance of obtaining independent legal advice in any property deal.

"Documents and contracts will usually be in a foreign language, so can be open to misinterpretation. There may be additional costs involved in the buying process that you are not familiar with - again, do your research," Ms Rowlinson stated.

Southern Spain remains one of the most popular destinations for people seeking a property abroad in a sunny location, she added.

Marbella is one place in particular that appears to be attracting many foreign investors, it was recently claimed.

Earlier this month, International Property Success predicted that prices in the area will not fall any further, while an increasing number of buyers from the Middle East, as well as countries such as Russia and the UK, are targeting real estate assets here.
 

People hoping to find a property in Spain that they can purchase should not take any less time or care over the process than if they were buying a house in the UK, one expert has cautioned.

Andy Bridge, managing director of A Place in the Sun, commented that "buying overseas is a serious business" and urged potential investors to be diligent.

He pointed out that due to the current economic situation across much of Europe, few locations are likely to generate a return over the next few years, so buyers should choose a property in a place they love.

Other things to consider are its proximity to good transport links and whether any rental income received will be enough to cover maintenance costs.

Earlier this month, research published by the Worldwide Property Group revealed that 65 per cent of Brits would consider purchasing real estate abroad because now is a good time to make such an investment.
 

A new online portal offering advice and assistance to foreigners who are planning to buy a property in Spain has been launched by the country's government.

The website has been designed to give people a simple way to contact the Public Law Corporation of Land and Mercantile Registrars of Spain - and receive a response in English.

One of the main aims is to help those purchasing a property resolve any issues or queries they may have about legal terminology and avoid problems caused by the language barrier.

Secretary of state for housing in Spain Beatriz Corredor commented: "This means that foreign citizens will now have access, in a way they can more easily understand, to all the information regarding the physical, legal and urban development status of a property."

The government body also noted that the buyingahouse.registradores.org site will improve the transparency of the Spanish real estate sector outside the country.

Meanwhile, Spain is also participating in a pilot of the cross border electronic conveyancing scheme with the Netherlands.

It is set to be introduced as an EU-wide initiative and the hope is that it will offer greater protection to buyers involved in real estate transactions outside their home country.
 

There have been protests taking place all over Spain against evictions being carried out because homeowners have fallen behind on mortgage payments.

Reuters reported that people have been fighting against rising unemployment, which has resulted in many households struggling with their bills.

Property prices in Spain have dropped significantly since their peak, which means a lot of people now owe more than their home is worth.

Analyst at Idealista.com Fernando Encinar told the news provider that the problems have arisen because "Spain has been so much more exposed to the property bubble", which has been compounded by falling values and rising job losses.

Last month, prime minister Jose Luis Rodriguez Zapatero unveiled proposals to change Spanish law to help reduce the risk of foreclosure.

Bloomberg revealed that under current rules, banks can claim back the deficit from homeowners if their properties are repossessed and then sold for less than the amount owed on the mortgage.

Zapatero aims to change this, so that handing the residence over to the bank would clear the debt, regardless of how much it is later sold for. 

Expatriates who have purchased Spanish properties are to be affected by a new European Union directive that looks set to be implemented across member states, one expert has claimed.

Helena Walsh of Cicero Consulting told moneymarketing.com that the legislation, which aims to provide better levels of protection for mortgage buyers, should boost the information ex-pats receive on foreign homes.

The new ruling will require financial institutions to increase transparency and encourage buyers to compare mortgage products offered by a number of providers if they are taking out a loan secured by their home.

"Many expats have buy-to-let properties on a personal basis which are currently regarded as commercial mortgages but will [be] affected as they are personal borrowing secured against a property," she explained.

Liberal Democrat MP Diana Wallis recently claimed a better system is required in order to guarantee protection for those purchasing property or land in another European country.
 

A pilot initiative to help expatriates hoping to buy overseas is currently being trailed in Spain and the Netherlands.

The Cross Border Electronic Conveyancing scheme enables buyers to carry out the process of purchasing a house or apartment in their home country, providing them with the protection of its legal system, Cyprus Property News reported.

Details of the project were first unveiled last month at an EU parliament seminar and it is expected to be tested in other nations throughout this year.

Speaking to the Daily Telegraph at the time of the seminar, Liberal Democrat MEP Diana Wallis said: "We must urgently arrive at a system that will guarantee legal certainty to people buying land abroad."

Ms Wallis went on to add that the EU has an obligation to develop a framework that provides this, stressing that it is important to encourage a transparent environment for real estate transactions.

This could come as welcome news to those hoping to invest in the Spanish property market while prices are low, after operations director at Conti Claire Nessling told Mortgage Strategy last month that buyers are turning to familiar markets when purchasing overseas.
 

Individuals looking to sell their property in Spain have been reminded of the tax laws which exist in the country.

According to Carlos Paton, a lawyer in Spain, there are a number of complex measures which non-residents must go through when looking to offload their property.

Writing for Lawdit, Mr Paton explained that foreign buyers in the country can expect to receive 97 per cent of the sale price, with the remaining three per cent contributing toward the "Plus Valia capital gains".

"After the completion, the seller independently being resident or non-resident will have to declare before the revenue commission, the revenues obtained from the sale of their dwelling," the legal expert added.

Non-residents will then be required to submit an application within 30 days of the completion date to the Administration Tributaria, declaring the capital gains tax.

However, many property owners in the country may prefer to hold onto their residences for a while longer, with recent figures suggesting that prices are declining still.

A company in Spain has launched a new service designed to help real estate investors in the country reclaim their money if a development is not completed on time.

The service has been set up in response to demand and works on a no win no fee basis.

It could lead to an increase in the number of people looking at Spanish property, with it helping to boost market confidence.

To qualify clients must be able to produce the original contracts, have a bank guarantee or insurance bond certificate, have proof of payment and have a contract that has expires without the property being completed.

Company director Daren Wallbank said the service allows property investors the chance of making a claim against a developer without the risk of high upfront costs.

"It's often the legal costs that provide the biggest hurdle for people who have already invested their life savings into a Spanish holiday home and really have no spare liquid funds available to them," he explained.

Britons who invest in Spanish properties may find that their local elected representatives speak with familiar accents, it has been revealed.

Figures from the Spanish government have shown that of the 85 councillors in the country who are from overseas, 37 are British.

This has been achieved due to the European Union law that allows citizens of member states to vote and stand for office in local and European Parliament elections if they live in another country.

One result of this may be that some British property owners will be able to enjoy better representation at local level if they have concerns about aspects of their life in Spain.

Last year a Briton on the council of the Costa Blanca town of San Fulgencio denied that he had taken on the role of the town's mayor after all the members of the authority who were senior to him were arrested.

Mark Lewis decided not to take on the role after councillors were held in a police corruption probe.

The police in Spain investigated more property corruption scandals in 2008 than in previous years, it has emerged...

Normally implacable foes, Spanish MEPs from the Socialist Party and the right-of-centre Popular Party closed ranks yesterday in the face of heavy EU criticism of Spain’s abuse of property rights and the environment.

The criticism came in the form of a draft report by Margrete Auken, a Danish MEP from the Greens, who has been commissioned by the Petitions Committee of the European Parliament to report on property and environmental abuse in Spain.

This is the third time the Petitions Committee has ordered a report into town planning, public tender, property rights, and environmental problems in Spain, all in some way related to Spain’s unfettered building boom of the last decade.

Auken’s draft report is a hard-hitting condemnation of Spain’s urban planning practices, weak property rights, and unresponsive legal system. The report points out that this is the third time that the Petitions Committee has investigated “serious abuses of the legitimate rights of European citizens to property legally purchased in Spain.”

The Valencian Community, in particular, is in the dock for its so-called “land grab” planning laws that enable developers to promote private housing schemes on other people’s land, and force owners to help finance those schemes. It is also accused of allowing housing schemes without sufficient water resources, and ignoring EU directives on environmental protection.

The Petitions Committee of the European Parliament has received 186 petitions signed by 15,000 people denouncing urban planning abuses in Spain. The Greens claim there are 250 residential housing schemes that have no guaranteed access to sufficient water. Most of the urban plans denounced to the Petitions Committee involved the reclassification of rural land that lead to “considerable economic gains for to the urbaniser and developer,” says the report.

Auken also argues that the unfettered urban development has wreaked massive destruction on the Spanish Mediterranean over the last decade, “and all for the greed and speculation of some local authorities and members of the construction sector.”

Auken’s report proposes a moratorium on approving new housing projects that do not meet EU norms, and a threat to deny EU cohesion funds if Spain fails to comply.

A highly critical report from Auken was expected, but what has come as a surprise was the u-turn by Spanish Socialist MEPs, who have joined forces with the Popular Party MEPs to try and water down the report with amendments to remove references to a moratorium, and sections criticising the Spanish judicial system. MEPs have until 27 January to submit their amendments.

“The Valencian PP appear to have persuaded their Socialist colleagues to turn this into an issue of patriotism, that being the last refuge of the scoundrel,” says Charles Svoboda of the AUN citizens group fighting Valencia’s “land grab” laws.

Commentators in the Spanish press suggest that, with the construction sector in a deep recession, and with European elections just around the corner, the Socialists don’t want to be seen attacking a sector that has already shed hundreds of thousands of jobs, nor supporting moves denying Spain EU structural funds.

Story by Mark Stucklin

The experience of a couple who watched their beloved Costa Almeria villa being bulldozed highlights the need for people to ensure they only buy property abroad from reputable companies...

Expat property owners marched through Almeria City on 9 January to protest against town planning disarray and corruption, whilst demanding stronger property rights and access to utilities. The march was timed to coincide with the anniversary of the day the Priors lost their home to a demolition order from the Government of Andalucia...

Headlines from the world of property: Spain: British expatriates march to protest chaotic planning laws Hundreds of British expatriates marched through Almeria to protest against planning laws. From the Telegraph. London: Capital’s prime properties see values plunge Prices for expensive properties fell by almost a fifth in just 10 months as the capital’s prime property caught up with losses [...]

María Ángeles Muñoz, the lady Mayor of Marbella, has promised the owners of the town’s 18,000 illegal properties that they will not have to pay any compensation to the town hall to have their properties legalised. But the question is, does she have the authority to make this promise? The promise is made in a...

The Spanish land investment scam run for years by Fortuna Estates has finally been busted, with the Spanish fraud squad swooping last week on several office in Mijas and Fuengirola, arresting at least 2 people, and questioning 20 others. This could be one of the biggest Spanish property scams to date, with hundreds, if not thousands of British and Irish victims. The Spanish authorities estimate that Fortuna Estates made at least 65 million Euros out of this fraud.

Still under official secrecy orders, the police have released few details about “Operation Fuentespino”, but the Spanish press reports that there could be more than 2,000 victims, mainly middle class investors from the United Kingdom and Ireland.

Fortuna Estates, which had changed its name to Fortuna Land (Investment) by 2007, snared its victims with the promise of high returns from land reclassification projects in rural Andalucia.

“Watch your investment in raw undeveloped land turn into commercial projects with multi-million euro potential,” promised Fortuna Estates, which started selling ‘shares’ in its projects in 2002.

Fortuna Estates contacted potential investors at through property exhibitions, cold calls and mailing lists, and a fairly substantial advertising campaign in the British quality press.

Claiming to be the “leading land investment agency based in Southern Spain,” Fortuna Estates offered its clients ‘shares’ in greenfield projects purporting to turn land in out-of-the-way parts of Andalucia into hot commercial property investments.

“Working primarily in the commercial sector of land development, Fortuna Estates has developed a program of investment techniques that bring this highly lucrative sector within the grasp of the ordinary investor,” claimed Fortuna.

Targeting the ‘ordinary investor’ was a key part of Fortuna’s strategy. It claimed it was making high-return land investments accessible to people who could not otherwise afford them. Many of Fortuna’s victims probably invested the minimum of around 10,000 Euros, and the vast majority probably had no experience of land reclassification or the realities of investing in Spanish property.

Fortuna sold various different projects over time, starting with a project called Bella Fortuna, then going on to sell projects called Sierra Fortuna, and Cazadores Reales.

An insight into how Fortuna hooked its clients with talk of high returns, backed up with invented figures, can be gained from Fortuna’s sales material.

“These factors have contributed towards the success of the Bella Fortuna project,” goes the patter. “This plot of stunning Andalucian countryside is over 400,000m² in size and located midway between Malaga and Granada, next to the town of Zafarraya. This project was first released to private investors in Sept 2002 at a price of €6.80m² and closed at a price of €9.20m² 14 months later. In Oct 2004 official planning permission for the Hotel Zafarraya complex was granted and the land was then independently valued at €37.59m².”

The valuations were meaningless, as Fortuna made them up to make it look like investors were making big profits, on paper at least. This was enough to keep filling the pipeline with new investors, and convince existing clients to invest more money in new projects. Some of Fortuna Land’s hapless investors are thought to have invested in as many as 3 of their projects.

Fortuna also beguiled it clients by doing all transactions through ‘independent’ lawyers and notaries, and giving clients “legally notarised title deed to the land in which they have invested.”

“ Whether your investment is for 5 acres or just a quarter of an acre, every investment is secured by physical ownership of the title document,” Fortuna assured its investors.

The plans Fortuna had for its land reclassification projects, and the way in which it kept changing them and announcing delays should have had investors’ alarm bells ringing. Plans veered around from hotels with a wedding chapel, to retirement homes, to solar farms. At one point, after long delays, they claimed they had received ‘verbal’ planning permission, but there is no evidence that Fortuna were serious about delivering on their promises.

Most of the victims of this scam are thought to be British, though Irish and Germans investors are also thought to be involved. As an article in the Spanish daily ‘El Pais’ points out, the British have fallen for numerous scams on the Costa del Sol over the last decade, mainly involving property.

The Fortuna Land scam was run out of offices on the Costa del Sol using companies registered in places like Cyprus and Delaware (USA). Currently the Fortuna Land website (fortunaland.es), claims they have “implemented a strategic relationship with The Oanna Group to realise your investment projects in Spain,” and instruct visitors to direct all future communications to oannagroup.com. The Oanna Group appear to have an office in London.

Despite making several arrests, the Spanish police do not think they have nabbed any of the masterminds, who are thought to have disappeared, and may already be working on their next scam.

Indeed, ‘El Pais’ reports that victims of the Fortuna Estates fraud have already been targeted by new scam that promises to recover their money for a fee of 10% of their investment paid up front.

Story from Spanish Property Insight

The European Parliament (EP) recently released the first draft of another damning report on Spanish ‘land grab’ laws and urban planning practises that threaten property rights and the environment.

There were also calls from the EP for a moratorium on all unsustainable new developments, compensation for victims of Valencia’s so called ‘land grab’ laws, and threats to cut off EU structural funds unless Spain puts and end to its abusive property practices.

Written by Danish MEP (Greens) Margrete Auken for the Petitions Committee, this is set to be the third report from the EP blasting urban practises in Spain in almost as many years. The draft will now be debated by the Petitions Committee, where it could change significantly, before going to a vote in the EP in the Spring of 2009.

The draft calls on the Spanish authorities to set up procedures to compensate victims of Valencia’s notorious ‘land grab’ laws, and notes that the EP can freeze payments of EU funds “when necessary to persuade a member state to stop serious infringements of the rules and principles of EU legislation.”

In a further threat to Spain’s access to EU money, the draft also points out that the European Commission can demand the return of funds if they have been used to finance projects that go against EU rules. It calls on Spain’s national and regional governments to “carefully review all the legislation concerning property rights to put an end to the abuse.”

The lack of clarity, precision, and legal security in Spain’s existing urban planning legislation is behind most urban planning abuses in Spain, argues the draft report. It also worries that Spain’s judicial system is incapable of dealing with the problem.

Story from Spanish Property Insight

The European Parliament (EP) today released the first draft of another damning report on Spanish ‘land grab’ laws and urban planning practises that threaten property rights and the environment. There were also calls from the EP for a moratorium on all unsustainable new developments, compensation for victims of Valencia’s so called ‘land grab’ laws, and...

UK house builder Taylor Woodrow de España has partnered with accreditation scheme Safe Buying Experience (SBE) to help ensure purchasers in Spain are offered a safe and secure process.

This partnership provides a double reassurance to buyers as they are now guaranteed a quality home complete with independent endorsement as to its ‘integrity, legality and safety’.

Jim McCook, managing director at SBE, said: “The current climate, coupled with past horror stories of people from the UK purchasing a home in Spain, has obviously had an impact on consumer confidence.

The SBE accreditation scheme has been put into place to help re-establish much needed confidence in the Spanish Property market that consumers are crying out for.

“This is combined with a thorough check on the reservation and purchase contracts, the deletion of any abusive clauses, and the gathering of all the correct legal documentation so that the potential purchaser can have the confidence of enjoying a safe, quick and indeed cheaper conveyancing process.

“It is fantastic to be partnered with a developer that is committed to achieving our standards, providing high quality customer satisfaction and security, on quality homes.”

Victor Sague, marketing director of Taylor Woodrow de España, added: “Purchasing a property is one of the biggest investments an individual is likely to make in their lifetime, so it is of little surprise that they want to make sure that it is safe-guarded. As a company that have been building homes in Spain for 50 years, we are keen to provide this re-assurance and security to homebuyers, therefore we are extremely pleased to have partnered with this worthwhile accreditation scheme.

Story from Fly2Let

Aifos, a notorious holiday home developer based in Marbella, has been forced into receivership by one of its creditors , the Spanish press reports. The company is reported to have 850 million Euros of debt, which would make it one of the biggest developers to date to go into administration, after Martinsa-Fadesa and Tremon. Its...

Owners of illegal properties in Almeria will be expected to contribute towards the cost of their legalisation. Residents have been told that local authorities and developers will not be able to meet the full cost of transforming isolated developments into proper neighbourhoods.

The announcement was made by Almeria's chief planning inspector, José Antonio Ortíz, at a conference last month, reports Costa News.

Despite the initial costs of legalising the properties, Ortíz insisted the homeowners would make a profit when it came to selling their homes.

However, local residents' groups are opposing the move.

David Dunthorn, from AUAN - an association fighting to safeguard illegal homes- said: "The scary thing is the cost; a lot of expats don't have that sort of money. But they need to consider that we've already paid for the infrastructure, we were assured by the developers that we had."

Justifying the decision, Ortíz said: "Those who bought a house in the town centre not only bought the square metres of that home, but part of a school, a park and a health centre. The people who bought an illegal property in the countryside are also enjoying those privileges."

Ortíz also maintained that Spain's legal system worked well, despite the reported backlog of court cases relating to illegal homes.

This story was brought to you by holidaylettings.co.uk, the UK's No.1 holiday home website.

The owners of houses in the Los Monteros urbanisation in Marbella have said they will formally accuse the Town Council of peddling political favours if Antonio Banderas’ house there is legalised. The film star’s beach front house was on the list of those to be demolished for building irregularities but will be regularised under the...

The town hall of Bilbao is the most transparent in Spain in terms of its dealings with the public, the contracting services and its finances according to a study on the transparency of town halls (ITA) by an international organization called International Transparency. This organization used 80 indicators to analyze the 100 largest town halls in Spain. In general, Spanish town halls failed to meet the standards set by International Transparency and Orihuela was found to be the least transparent.

The results of the study were presented in a press conference by the president of International Transparency Jesús Lizcano. The patron of the Ortega and Gasset Foundation, Jesús Sánchez Lambás, and the secretary of the foundation, Antonio Garrigues Walker, also participated in the press conference along with Manuel Villoria a professor at the University of Rey Juan Carlos. It was emphasized that the best way to combat municipal corruption was to promote transparency.

Lizcano stressed that it was very important to improve transparency in the area of urban planning and public works which account for 50% of the budgets of the majority of Spain´s town halls.

The study was carried out using a questionnaire sent to the town halls included in the study . Overall they were given 69.6 points out of 100 for transparency in information with regards to municipal structures followed by 69 points awarded for dealings with the public. Transparency in urban planning and public works was only awarded 48.4%.

However, the results for financial transparency got the least points with just 29.1 points awarded overall followed by transparency in the contracting of services with 37.3 points. Bilbao, was found to be the best town hall with 90.6 points followed by Gijón (82.5), Cartagena (81.9), Barcelona (81.3) and Vigo (80.0). In contrast, the least transparent town halls were found to be Orihuela which was awarded just 12.5 points, Torrevieja (15.0), El Ejido (16.3), Huesca (17.5) and Dos Hermanas (18.8).

Asturias was found to be the best region with 74.6 points overall followed by the Basque Country and Murcia which both received 63.5 points. La Rioja and Navarra received 62.5 points The townhalls of Extremadura was only awarded 22.5% overall followed by Cantabria 34.4% and Aragon with 34.6%.

International Transparency was set up in 1993 and is the only non governmental organization dedicated to combating corruption. It carries out annual studies of town halls in various countries.

Story from Euroresidentes

It looks as if Air Berlin and the Balearic Islands’ regional government may end up declaring war on each other. The latter continues to insist that the airline produce all its written and spoken information in Catalan as well as Spanish, and the airline continues to refuse to do so. Last week, the company’s director...

A judge in Almería Rivera ruled last week that the Junta de Andalucia and the Socialist-controlled Carboneras Town Council ignored the Coasts Law and the plan for the Cabo de Gata Nature Park when they allowed the Hotel Algarrobico to be built just 28 metres from the shore, and to insist for years that it...

Marbella Mayor Angeles Muñoz announced last week that the Council plans to demolish two of the six buildings that the Junta de Andalucia had asked her to pull down. She said the two demolitions would not affects individuals as they were not residential. She added that the developers had not had a building licence in...

The European Commission has decided to take Spain to court over its notorious ‘land grab’ laws, after thousands of property owners complained to the European parliament about planning abuses in the Valencian region. In 2006, the Valencian government replaced the original ‘land grab’ law, known as the Ley Reguladora de la Actividad Urbanística (LRAU), with Valencia’s...

Spain is being taken to the European Court of Justice over the "land grab" laws in Valencia. Thousands of British homeowners in the Valencia province lost land as a result of the land grab laws.

Under Valencia's land grab laws developers were able to seize private property for the creation of public works. However, Spain is now facing legal action, which has been brought by the European Commission, reports The Telegraph.

Spain now faces accusations of infringements of competition regulations and could be made to pay significant fines. Furthermore, Valencia could be forced to review its planning laws.

"It is extremely good news. For the first time those responsible for blatantly breaking EU-wide regulations will be brought to account. If successful, it will mean huge fines for Spain and an end to these laws once and for all," said Charles Svoboda of Abusos Urbanísticos No, a lobby group representing those affected by the land grab laws.

However, a victory at the Court would be largely symbolic for affected homeowners as the European Court of Justice has no power to award compensation, Svoboda added. The group is planning to pursue the right to compensation through the European Court of Human Rights.

Many homeowners in the Valencia province found that areas of their garden or even their house had been given to contractors for "urban development" and were awarded little compensation. As a result, properties were rendered near worthless and in some cases owners were forced to pay for infrastructure on the expropriated land.

This story was brought to you by holidaylettings.co.uk, the UK's No.1 holiday home website.

Expats are staging a protest to highlight the plight of residents who unknowingly bought illegal properties in this part of Spain...

A fresh example of planning abuse has emerged in Torrevieja, this time involving alleged favouritism in the town planning office towards certain groups or people. The Green Party of Torrevieja has raised the alarm, reports the Spanish press. It started more than 6 years ago, when the German owner of a plot in the Finca...

Lawyer José Cosín, who has just published “Mafia y Corrupción: El gilismo que no muere” (Mafia and Corruption: The Gilism that doesn’t die) about the Jesús Gil years in Marbella, told the El Mundo daily newspaper in an interview last week that everyone - from the Junta de Andalucia in Sevilla down - know what...

Foreign property owners in the Marina Baixa region of Valencia’s Alicante province (South Costa Blanca), have organised themselves into a group called Veïns de L’Alfàs (Residents of L’Alfàs) to defend their rights as property owners against the town council and local property developers. Marco Perotti, president of the Veïns de L’Alfàs association, told the Spanish...

The Marbella town council has decided to start issuing licences of first occupation (licencias de primera ocupación) before the town’s new urban master plan gets final approval. First occupancy licences will be granted to owners of Marbella properties that are expected to be legalised by the new urban plan (Plan General de Ordenación Urbana).

The decision to grant first occupation licences before the urban master plan becomes law was a contentious one that was passed without cross-party support. Marbella’s Mayor, Ángeles Muñoz, of the right-of-centre Popular Party, won the vote thanks to her majority on the town council. The opposition PSOE socialist party abstained in the vote, and the United Left’s town councillor voted against it.

Mayor Muñoz justified the decision saying that it will “generate confidence and stimulate the economy, as well as sending a message of absolute peace of mind to owner of homes that do not have a licence of first occupation.”

The Socialists abstained on the grounds that the move lacks adequate legal guarantees, given that the urban plan has not been finally approved.

The first draft of the new urban plan was approved in July 2007, and the final draft is up for provisional approval in September, with final approval expected to follow in the Spring of 2009. Given recent changes to the draft, largely concerning the compensation mechanisms for planning infractions, the plan will have to be subjected to another round of public consultation after provisional approval in September. With that in mind, the Socialists may be right about the town hall jumping the gun.

Full story from www.spanishpropertyinsight.com

Property company in danger of breaching covenants over £810m loan...

Planning approvals have fallen 57% , to 144,000, in the first 5 months of the year, compared to 336,000 in the same period last year, new figures from the Ministry of Development show. This is the lowest level of planning approvals since the year 2000. Approvals for apartment blocks fell by 60%, compared to 43%...

Despite headlines about impending demolitions, many observers in Spain believe cooler heads will eventually prevail and plans will be developed to save most of the tens of thousands of homes deemed illegal. But the question remains: How? One proposal calls for homeowners to pay fines to save their homes. But that doesn’t seem right, considering the owners...

A planning amnesty has been proposed for 50,000 illegal properties in the Malaga province of Andalucia. The planning amnesty has been suggested by a regional branch of Spain's Popular Party (PP).

Andulucia's Malaga province has suffered from "relentless growth in the number of illegally built homes" and politicians now recognise that a solution to the issue must be found, reports Spanish Property Insight. 8,000 of the properties that would be covered by the proposed amnesty are in the Mijas municipality.

While the PP has suggested an amnesty for the illegally built properties in Malaga, the PSOE party (which controls Andalucia's regional government in Seville) opposes any mass legislation. The PP argues that a blanket approach to legalising rural properties would avoid unnecessary demolitions.

"The problem with demolitions as a solution is that the Government of Andalucia probably can't afford it," the website argues. According to cbnalmeria.com demolitions can cost between €30,000 and €36,000 each, which would be primarily covered by the government, as home owners "would never pay" for them.

However, it is pointed out that although home owners are obliged to pay demolition charges if their property is illegally built, retired expatriates on a UK pension below the Spanish minimum wage of €600 per month would be exempt from paying the costs.

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The Marbella town council has decided to start issuing licences of first occupation (licencias de primera ocupación) before the town’s new urban master plan gets final approval. First occupancy licences will be granted to owners of Marbella properties that are expected to be legalised by the new urban plan (Plan General de Ordenación Urbana). The decision...

Surge in number of people from the UK contacting property lawyers for advice as developers go out of business in Spain...

A further update on the Spanish Law of Vicios Ocultos, courtesy of Campbell Ferguson of Survey Spain

There is no standard contract for selling and buying resale properties, and there could be different ways of trying to avoid the responsibilities of vicios ocultos. Wording of this kind could be added to a sales contract:

• El vendedor queda exonerado de los defectos/vicios ocultos que pudieran existir
• El comprador conoce y acepta los defectos/vicios ocultos

Unfortunately, in either case, it’s not certain that these would be accepted by a consumer court.

Also, when dealing with newly built properties, the responsibility of the developer/contractor/designer is for 10 years for structural defects, 3 years for installations and 1 year for finishes.

The clock starts ticking from the date of the final completion certificate, CFO. This is important if a building has remained unsold for some time or if it is being sold again ‘as new’ by an investor. The date of the CFO, (which I understand to be the architect’s certificate and not the first occupation licence LPO), is therefore very important.

Remember: this doesn’t constitute legal advice on the part of Campbell or Kyero.com because we’re not qualified to do so. Please use this information responsibly and seek professional legal advice.

By going into voluntary administration, Martinsa-Fadesa, Spain’s biggest private house builder by assets, has left 12,578 of its clients wondering whether they will ever see the properties they have partly paid for, and worrying what will become of their stage payments. The company has issued statements vowing not to let down any of its clients, and...

The Spanish press has revealed that Fernando Martin, president of Martinsa-Fadesa, a developer that last week sought protection from its creditors, leaving 12,500 clients with no home to show for their money, and hundreds of staff laid off, took 85 million Euros in cash out of the company last year in the form of dividends...

The local government of Ibiza, run by a coalition of the PSOE socialist party, the United Left party, and the Greens, has introduced a controversial 3-year moratorium on building licences in 13 areas of Ibiza, designed to protect some of the islands most attractive landscapes. In all some 400 hectares of coastline and hills...

Spanish developer Martinsa-Fadesa’s move into administrative protection is sure to send shock waves through the Spanish property market. Described as the “largest ever bankruptcy process” in Spain since the introduction of new rules in 2004, the property company listed more than €5 billion, or $8 billion, in debt. The Spanish banks carrying the bulk of...