Advice on developments in Spain.

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This topic contains 31 replies, has 11 voices, and was last updated by Profile photo of Anonymous Anonymous 9 years, 8 months ago.

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  • #52757
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    Anonymous
    Participant

    Hi my name is Ken and i live in East Yorkshire, iv joined the forum to find out about buying property in Spain. Iv only ever been to Spain once before many years ago and didn’t like it but then went on one of those property trips last week based in the Murcia area. My views on Spain have changed and i have found one particular property in Jumilla which is off plan at Santa Ana golf resort so basically love the property and the region but very wary of commiting financial to the “Spanish Dream”. Off Plan is often advised against but to the novice apears to be excellent value for money. The development is being carried out by the San Jose company and i am told are a very respected, quality company. If there is anyone out there who is resident on a finished San Jose development and possibly bought off plan who may advise me on any aspect of the process, area and indeed anything else.

  • #70490
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Ken

    Suggest you wait for a response from Melosine.
    A lonterm and knowledgable resident in the Murcia area.

    Re. off-plans – you have to be very cautious. There have been many disasters, in the Costa del Sol area especially, and many peole have either lost a lot of money, ended up with an illegal build or are having to go through the courts.
    Valid building licences are an absolute must, as are Bank Guarantees.
    And do see them for yourself – do not take anyone’s word that they exist.
    And of course, find an independent lawyer, not one recommended by the estate agent or developer.

    I think the general concensus on this forum is that whereas off-plans were a good buy/investment years ago – it is not considered so in the present property-climate currently in Spain.
    Though obviously a lot depends on what prices are being asked.

    Whatever you decide, wish you good luck and success in your quest. 😀

  • #70491
    Profile photo of katy
    katy
    Spectator

    My advice would be not to buy off-plan…anywhere, sorry. There are thousands of resales around, some never lived in and cheaper and you can see what you are buying. They all seem good in the brochures. This forum and many others are full of buyers who did not get what they were promised. Just my opinion but I don’t think there is such a development company in spain that is a respected and quality company.

  • #70492
    Profile photo of Anonymous
    Anonymous
    Participant

    Ken

    i feel a right ‘muppet’ for buying off-plan, and 5 years down the line, i’m still trying to get my deposit back! I wouldn’t buy off-plan now, even it seemed like bargain of the century. You just have little idea what the situation will be with your place in 1 year, two years, five years? My apartment shrunk to not much over half the contract size, in its four and a half year build time, with no discount offered! And still has no LFO.

    If i was looking now, i would look for a built place and just go and a look round and talk to those living nearby. If the majority are happy, go back and bargain hard. You really are in the driving seat at the moment.

    Just my opinion of course, for what it’s worth. I’m no expert, just someone who did it wrong and learned a hard lesson.

  • #70496
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    Anonymous
    Participant

    Thanks for replys, regarding Charlies question on price they are Euro 132,000 for a large 2/3 bed quad 3 storys. Regarding Katy where do you suggest the best place to find a resale to compare with Jummila. Goodstich44 sorry to hear of your situation, do you think things have improved and did enter the market again or did you give up

  • #70497
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    Anonymous
    Participant

    Ken – re. prices, I have no knowledge what is the norm per square metre in the Murcia area. Perhaps one of the agents from the area can advise?

    Katy’s advice is sound – maybe good at least to consider a development that is up and running where you can see what you are buying?
    It certainly is a buyer’s market at the moment – you would be in a very good position to have the pick of the bunch re. unlived-in re-sales, and to negotiate a good deal.

  • #70498
    Profile photo of Melosine
    Melosine
    Participant

    Unfortunately not my area of Murcia but do know a site…have pm’d it to you Ken …it has a forum dedicated to buyers on this developement. Seems there are delays !!
    I never say never but do suggest proceeding with caution when dealing with off plan.

  • #70500
    Profile photo of Anonymous
    Anonymous
    Participant

    Thank for the link Melosine delays will not be a problem to me, daughter going to university for 3 years. Can you elaborate on proceed with caution.Any advise or opinions gratefully recieved.
    Thanks again Melosine

  • #70501
    Profile photo of Anonymous
    Anonymous
    Participant

    Thank for the link Melosine delays will not be a problem to me, daughter going to university for 3 years. Can you elaborate on proceed with caution.Any advise or opinions gratefully recieved.
    Thanks again Melosine

  • #70502
    Profile photo of Melosine
    Melosine
    Participant

    Proceed with caution…. because some developements in Spain don’t have all the correct licences.
    This is why some folk say don’t buy off plan.
    However have had a quick look on the forum and apart from delays for some, inevitable I believe with any developement, all seems okay and everyone is very happy with this particular one.
    Do however choose your own lawyer not the inhouse one.
    All the best

  • #70504
    Profile photo of katy
    katy
    Spectator

    It’s not just the legality problems, many developments are not delivering the facilites/views etc. they have promised. Have read on many forums, less swimming pools than planned, no landscaped gardens, smaller build adding an extra block and ruining views, it goes on and on. Believe me this forum is only the tip of the iceburg and I am not just writing about the CDS either.

  • #70506
    Profile photo of Anonymous
    Anonymous
    Participant

    I´ve bought both off-plan and resale in my time. Contrary to what you read from most people on this forum the off-plan was a much smoother experience for me. However, I didn´t buy on the Costa del Sol.

    I think on the CDS at the moment the way forward is definitly resale – you can haggle prices down and illegal off-plan properties are rife there.

    Where I chose to buy it is the other way around. Resales are very expensive compared to off-plan and there is no “buyers market” so the sellers will not be haggled down at all, and they won´t sell to you unless you agree to pay black money.

    I think what I am trying to say is do your investigation into the area where you are buying – don´t be put off buying in Murcia just because a load of people bought from crap developers in the CDS. Their experiences may not be relevant to your experience (but on the other hand maybe Murcia is just as bad as the CDS? – I don´t know the area so can´t comment).

  • #70507
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    Anonymous
    Participant

    Info on irregularities, and not only on the CDS.

    http://www.diariosur.es/20061106/espana/mapa-c … 61611.html

  • #70508
    Profile photo of katy
    katy
    Spectator

    Dorothy, thank you once again for coming up with the links to back up what I was trying to point out. 🙂 I did say I wasn’t writing solely about the CDS.

  • #70509
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    Anonymous
    Participant

    Well, if that article is worth anything then I would deduce that Murcia and the CDS are probably the worst two offenders for illegally built properties in Spain.

    That said, however, on my quick scan through I couldn´t see anything relating to Jumilla (although I dont have any local knowledge of the area), so it sounds like everything is AOK at that resort.

  • #70511
    Profile photo of Melosine
    Melosine
    Participant

    Aguilas Council are the only local authority , of many, close to where I live who have been questioned. I believe this to be about the area on the coast beyond Calabardina, where the council want to put a developement on land that is a natural habitat for birds. Personally think it a pity if it does go ahead because there are only tiny pockets of undeveloped coastline left. However to date there isn’t even a flag pole showing an intent to build there although it has been discussed for quite a few years .
    Appreciate there is/has been corruption in Spain in general, especially where massive building programmes have taken place but equally it is wrong to assume every council is corrupt which I why I prefer to advise folk to proceed with caution.
    If Ken decides to consider Jumilla and asks questions on the forum I pm’d him hopefully he will find out whether or not it is the place to buy and in time let us know.

  • #70514
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Ken,

    Have you seen this website and forum?

    http://www.santaanadelmonte.net/

  • #70515
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks all for replys and comments i must say after going on to dedicated site for the complex as supplied thankfully by Melosine i am feeling a lot happier, as she mentioned apart from people complaining about delays there is no bad news which is quite comforting. Various people talk of resales being better value but i cannot personally find any to compare with this property off plan. If anybody can supply me with any pointers i would be very grateful.
    Thanks again Ken.

  • #70516
    Profile photo of Anonymous
    Anonymous
    Participant

    But surely, as none of the properties have been completed yet amd are overdue already, there would be nothing else for people to complain about, other that the developer sitting on their money for an extra 12 months plus and it gathering interest for him at your expense.

    If anyoneone would like me to sit on the odd hundred thousand plus, for a year or two, I will be pleased to then let them have it back but without interest.

    Be careful, be warned, read up as much as you can. Remember, dedicated sites may be informative, but many contributors may have already been tied into a contract or are considering like yourself, so may have a less objective thought.

  • #70518
    Profile photo of Anonymous
    Anonymous
    Participant

    Unfortunately mg, this is a very common ‘game’ played by developers, as in our case. They sat on our money for three years, then when they didn’t build anything offered to return it without interest! Nice game if you can get away with it.

    Ken, re. off-plans I would just like you to be aware of two important points to look out for:

    1) Contracts: often some developers write in clauses (that actually go against the law but are binding if accepted by the purchaser) that weigh heavily in the developers’ favour.
    Ones to watch out for especially is that completion is due when the building works are finished. Do not accept this clause. Legally, there is a law that states completion in only due when a Licence of First Occupation has been issued (by the local authorities).
    Completing without an LFO in place can bring many problems such as difficulties getting utility connections (water, electricity) – and officially has not yet been deemed legally habitable by the authorities. Bit like having a car without a MOT.

    2) I can not stress enough how important it is to make sure your lawyer obtains a Bank Guarantee for you from the developer to protect your deposit and stage payments.

    These two aspects alone has caused a lot of heartache for thousands of purchasers and can be simply avoided with awareness/knowledge of the purchaser…….and a good, trustworthy lawyer.

    One of the best investments you can make at this early stage is to invest in an excellent book: ‘You and the Law in Spain’ by David Searle. It is easy-reading, and takes you step by step through the purchasing process – making you aware of all the do’s and don’ts along the way. A bit like the purchasers’ Bible of Reference.
    We unfortunately found and bought this book too late!

  • #70519
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    Anonymous
    Participant

    I wouldn’t say the developer is sitting on their money and gathering interest surely their money is partly funding the construction of their property. I am in business myself in a small way and when i undertake a project which involves large amounts of money over a period of time it is standard practise to invoice stage payments which in my eyes is just the same principle. Even so i appreciate what you are saying and taking on board all advise.

  • #70520
    Profile photo of Anonymous
    Anonymous
    Participant

    Builders in the UK are able to build massive developments or even small exclusive developments without taking the equivalent of millions of euros in deposits and stage payments.

    Not only did our developers not build our apartments, (same as Charlies) we paid 96,000euros deposit and on top of that the developer took out a mortgage on the apartments individually as well. 🙄

    I can understand small contractors needing an upfront payment for work to be carried out on expensive projects but not ” reputable, large development companies”. It seems everything in Spain has to be paid upfront….except from the lovely young Spanish guy who owns the apartments we holiday in each year. We pay when we leave! 😀

  • #70521
    Profile photo of katy
    katy
    Spectator

    Much of the advantage of buying off-plan was the fact that when completed the value was considerably higher. This is not happening now. Infact someone on an almeria forum commented that they are now in negative equity.

    All the wonderful facilities rarely materialise if one reads all the forums after they are completed. As someone said there isn’t a lot to complain about at the moment as its too early in the project. I once gave my opinion about a large development which included a golf course with free golf. I received a lot of flack and an abusive message from a purchaser…now the purchasers are finding out there is no such thing as free golf, don’t think they have even the promised golf club!

    I think life is too short to commit 30% and wait for an average of 3 years when its possible to be enjoying a purchase straight away…who knows what will happen?

  • #70523
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    Anonymous
    Participant

    @katy wrote:

    I think life is too short to commit 30% and wait for an average of 3 years when its possible to be enjoying a purchase straight away…who knows what will happen?

    Katy – I feel you have summed up my sentiments re. off-plans exactly.

    And to financially commit to something that doesn’t exist yet now seems to me absolutely bonkers risk-wise. Especially as it won’t only be x-amount of Estate Agents going bust in the near future – how many developers will also be going the same way in these times of slow-sales and over-supply?

    There are mutterings of bankruptcy regarding two fairly large developers that I know of – and I don’t even have my finger on the pulse out in Spain.
    Goodness knows what you hear at your dinner parties, Katy 😉

    Apologies for all the doom and gloom, but as my Granny used to say – “better to be prepared than not”!

  • #70524
    Profile photo of Melosine
    Melosine
    Participant

    Claire,Katy, Charlie
    Think Ken will agree that I pm’d with same concerns as you are now addressing.
    However at the end of the day all we can do is highlight concerns and pitfalls and direct people to forums and publications. From thereon in it is up to each individual to make up their own minds.

  • #70525
    Profile photo of Anonymous
    Anonymous
    Participant

    Agree Melosine. We can only share advice /experience. It’s up to the individuals to take it or leave it. 😉

  • #70526
    Profile photo of Anonymous
    Anonymous
    Participant

    Absolutely Melosine. It is always each individual’s decision at the end of the day.
    All we can do is provide as much info. as possible and certainly help buyers be aware of the legal pitfalls such as bad contracts, and lack of essential documents. This is why I think a book like David Searle’s or something similar is an ‘essential must’.
    How many EA’s on this forum alone have accused Brits. of being naive, stupid, ill-prepared etc.? I certainly wish, looking back, that I had been better prepared and informed. I thought I had covered all bases but obviously my attempts were just not good enough.

    Of course there are superb successful developments out there, but as has often been stated here, it’s a bit of a minefield sorting the goodies from the baddies. And these are risky times.

    My question would be: Does a particular off-plan propostion represent value for money, and does it represent a risk?

  • #70531
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    Anonymous
    Participant

    “I wouldn’t say the developer is sitting on their money and gathering interest surely their money is partly funding the construction of their property”
    That is assuming that if they have taken deposits for say 400 units, they have started construction on 400 units. If they have just got the show houses up and started a few units, why should they hold a deposit without paying interest?

    “I am in business myself in a small way and when i undertake a project which involves large amounts of money over a period of time it is standard practise to invoice stage payments”
    A stage payment is entirely different to say 30% up front.
    Stage payments are normally due when various stages of works are complete. Say to slab level, to eaves level and completion.

  • #70552
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    Anonymous
    Participant

    Thanks to all for the feedback and i am taking on board your comments especially about the book that was reccomended. Regarding mg not wishing at all to seem argumentative but i do not feel at this stage in this specific project that the deposit is all up front as you describe it. Not wishing to defend the developer but they must have quite a substantial financial outlay before construction even begins at all. Currently a very large amount of propertys are under construction. This of course is only my personal opinion.
    Thanks again for all comments and advise.
    Ken

  • #70567
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Ken

    Just to add my two penneth worth, how much a developer has to outlay prior to construction is no reason to put your own money at risk. It is highly feasible that the developer in question is highly respected, financially solvent, and likely ot deliver the final goods.

    However as there are currently more new builds planned this year than last (I believe the figure is 8% higher) and something like 7% LESS sales of new builds this year, not to metnion there is already a glut, pure economics suggests you are backing a loser.

    Wait six months and you will get the same development for 10% less. Wait 12 months and who knows the developer may not even be completing.

    One other stat that may be of interest. The Spanish Banks are putting inordinate financial pressure in the way of extra interest on developers(Spanish developers pay more than the equivlent rate for defaulters of mortgages in the Sub Prime mortgage sector – go figure)

    Based on this and the fact that less people are buying, how likely do you think that a developer now is going to

    1. Find enough buyers to fund the development
    2. Keep the bank onside long enough for it to see fruition
    3. Deliver on the promises.

    Why do you think there are delays? Probably because of funding.The banks will only allow a project to go ahead now when they have sufficient people signed up to reduce their overall risk

    In summary be careful. I am an advocator of off plan in the right circumstances

    However I feel you are sliding into an abyss that you will not recover from

    I hope I am wrong

    Vince

  • #70574
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    Anonymous
    Participant

    “how much a developer has to outlay prior to construction is no reason to put your own money at risk” and boy how I agree with that.

    “the developer but they must have quite a substantial financial outlay before construction even begins at all” as with cars, televisions, phones etc. but how many such things to you put a large deposit down on say 1 or 2 years in advance.
    This will have been taken into considration by the developer in his appraisal and funding plan, therefore is reflected in the price to start with.

  • #70581
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    Anonymous
    Participant

    Good advice Vince! 🙂

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