Buying off plan – anyone forced to complete?

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This topic contains 7 replies, has 6 voices, and was last updated by Profile photo of Anonymous Anonymous 11 years, 4 months ago.

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  • #51146
    Profile photo of Anonymous
    Anonymous
    Participant

    I think we all know now that buying off plan to sell before completion is a terrible idea but some of us made that mistake 2 years ago and are now living with the consequences. I wish I had come across this fantasic forum back then and I would never have gone ahead.

    I would really appreciate hearing from anybody who has been forced to complete because they couldn’t resell before completion. What has been your experience following completion? Does anybody regret going to completion?

    I am considering cancelling the private contract and losing my 30% reservation on an apartment in the Costa del Sol because I have no confidence that I would be able to sell the completed apartment over the next few years, if ever! I also don’t believe that I will be able to rent it out. The market appears to be flooded with average 2 bed apartment developments. If I complete I would incur so many additional costs as well as having to borrow the 70% of the purchase price that I think I could end up losing even more money. Any thoughts would be appreciated to help me make this decision.

  • #58425
    Profile photo of Anonymous
    Anonymous
    Participant

    Sinead, you can call me re this problem if you want, my phone no. is in the topic Problems Investing off-plan on page 2 of this forum I think, I’m happy to go through the figures if you want because you could be right with your assumption about the market being flooded and low rentability.

    Try and read the links mentioned below on a recent posting of mine.

  • #58442
    Profile photo of Anonymous
    Anonymous
    Participant

    Just one thought,

    A well-written off-plan contract (contrato de compraventa en construcción) will limit the buyer’s losses to a % of payments made to date if the buyer cannot complete. Check whether this clause is in the contract you signed.

    If there is no such clause then you might be able to limit your loss to 40-50% if you went to court. However there is never any guarantee of this, and it does require spending time and money in court. Might be worth threatening the developer with anyway.

    Mark

  • #58443
    Profile photo of Anonymous
    Anonymous
    Participant

    This seems to be such a huge problem for so many people now. My advice would be to check out the long-term rental market in the are first. Most people will only consider renting their properties our as holiday lets but there does seem to be a shortage of long-term lets. The Spanish government is even stepping in to assist people in renting their apartments and finding tenants for long term lets.

    So maybe something to consider…

  • #58482
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi there

    I would say be very careful about long term rental. Under Spanish Law anything over 11 months gives the renter a huge amount of rights (I speak from bitter experience) and you could end up selling your property to the renter for peanuts.

    And dont believe what many agents will tell you – if you make a continuation in the contract you have effectively given them more than 11 months and therefore they have these rights. It is now also possible that any contract longer than 6 months is also potentially difficult to get the tennants out. There are ways around it of sorts but these are difficult.

    So beware if you are going to rent out long term. I got burnt myself last year and although eventually managed to get them out it was a costly process. And whatever you do – do not ever rent out unfurnished – do so at your peril.

    Some advice

    1. Dont rent to a family with children – even if they dont pay you will never get them out
    2. Dont rent for more than 11 months and force them to leave after this period
    3. Ensure in your contract you stipulate the place is your home and you will be returning at the end of the peirod
    4. Do not EVER let a place unfurnished – the court will then take the view that because the tenants provided furniture they could not be on a short term holiday let therefore have the right to stay – this can be up to five years.
    5. If you want to sell your property in the meantime you MUST offer this to the tennants first. They have the right to buy it from you at the market value at the time you first arranged the contract plus interest – not market value today.

    I found all this out when I went to court last year to remove my tenants because they had not paid yet again. My agent told me it would be no problem because they were on an 11 month contract, the court told me they have the right to renew (bear in mind they hadn’t paid me for half the time they were there).

    I advise you to proceed with caution if considering long term lets. It is a minefield – do not get your hands burnt. This is the reason that there is a lot of people looking and no-one offering. The law in Spain is worse than the UK

    Regards

    Vince

  • #58647
    Profile photo of Anonymous
    Anonymous
    Participant

    How I wish I had better researched the Sol market before paying the 6% reservation followed by the remainder of the 30% deposit on an Appt in April 2004 due for completion in June 2006.
    If I had found Marks website earlier me and amny more like me might not bi in the situationa lot of us seem to be in.
    Does anyone know the answer to this poser. Our Lawyer ,or is it theirs ? (the developers) are pushing me to sign the Purchase Contract or give her proxy. As we have not yet done so what do you think are our chances of pulling out without much loss ?

    Thanks to anyone who can help.

    regards to all
    Olly

  • #58650
    Profile photo of Anonymous
    Anonymous
    Participant

    Olly,

    Your chances are probably not very good.

    However let me see if I understand this correctly. You have paid 30% of the price of the property, but haven’t yet signed the private purchase contract – is that correct?

    Mark

  • #58651
    Profile photo of Anonymous
    Anonymous
    Participant

    Mark
    Thanks for your reply.
    Yes that is correct.I have not signed the Private Purchase contract.
    A recent e-mail from my solicitor in Spain says that signing it would “strenghen” my posoition if I wanted to sell prior too completion but of course we all know the problems involved in trying to do that.
    Thanks for your interest and help
    Regards

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