excessive final costs

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This topic contains 18 replies, has 5 voices, and was last updated by Profile photo of Anonymous Anonymous 10 years, 12 months ago.

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  • #51423
    Profile photo of Anonymous
    Anonymous
    Participant

    Just had the final estimation of costs from my solicitor just had afew shocks on the statement would welcome your comments. I am buying an apartment in San Pedro for 360000e was offered with developers mortgage which we declined now have these items on the statement:

    Cancellation previous mortgage 1706e
    Penalty cancellation previous mortgage 2170e
    Bank opening commission 2360e

    There are 6236e of fees I was not expecting, I never took the developers mortgage and wrote on the contract that I would not accept it.

    What is a bank opening commission? I already have a Halifax bank account inSpain.

    Would welcome your comments.

  • #60189
    Profile photo of Anonymous
    Anonymous
    Participant

    As a matter of interest, who were your lawyers.?

  • #60190
    Profile photo of Anonymous
    Anonymous
    Participant

    GV&A Marbella
    ever heard of them?

  • #60193
    Profile photo of Anonymous
    Anonymous
    Participant

    Have a read of this previous thread
    http://www.spanishpropertyinsight.com/forums/viewtopic.php?t=206&highlight=morgage
    and also have a thorough read of your purchase contract – any charges in respect of taking over or not taking over the existing mortgage should have been set out therein.

  • #60194
    Profile photo of Anonymous
    Anonymous
    Participant

    Gingerbear2

    When you say GV&A, do you mean a firm called something like Gomez Villares Abogados, based in Marbella or thereabouts?

    Mark

  • #60196
    Profile photo of Anonymous
    Anonymous
    Participant

    yes that’s right

    I may have some more news on this tomorrow

  • #60197
    Profile photo of Anonymous
    Anonymous
    Participant

    Oh dear!

    All 3 items sound highly dubious to me. These charges need to be thoroughly looked into before you pay anything to this firm.

    What on earth is a ‘bank opening commission’? Who is charging this, the bank or the solicitors? I’ve never heard of a bank charging 2,360 Euros to open an account. Opening an account should be free. If you use a lawyer to help you do this simple task I can understand them charging for the service, but not more than a couple of hundred Euros max, assuming they spend a couple of hours with you to do it.

    You shouldn’t have to pay anything to refuse the developer’s mortgage. What isn’t clear is who is trying to charge you for the cancellation and the penalty. Who gets to keep the money on these charges, developer or lawyers? Try and find out.

    Mark

  • #60198
    Profile photo of Anonymous
    Anonymous
    Participant

    Mark, DLM charged US “bank opening commission” They certainly didn’t tell us they were charging an astronomical fee.We could have done it ourselves, given the option.! ….perhaps it’s the norm for lawyers in Marbella. They are a law unto themselves!!

  • #60199
    Profile photo of Anonymous
    Anonymous
    Participant

    Not just in Marbella ALL the costa del sol.

  • #60200
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    Anonymous
    Participant

    I would challenge this. Marbella lawyers charge more than anyone else because of their flashy offices.

    I am not saying that ALL lawyers in Marbella are like this as I know a few good ones, but I also know the names of some total sharks and I just do not know how they continue to trade with how they operate.

    My advice would be is to request a “breakdown” of the invoice on a “points system” something that all lawyers have to abide by set by Madrid. Then find yourself a lawyer in Malaga who has a scruffy office full of books and mess – do not be put off – it means he is a REAL lawyer. He will charge you minimal costs and put the Marbella lawyer straight. If you have a Malaga lawyer, your Marbella lawyer will pay attention, believe me. He is just trying it on as he probably wants to buy a 4 X 4 for his wife for Christmas. Its happened to me…….loads of times.

  • #60201
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    Anonymous
    Participant

    Sorry just checked through everything thoroughly the bank charges are for the mortgage I am using Halifax for my spanish mortgage. So this charge is ok.

    However it is the other 2 costs I am disputing

  • #60205
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Gingerbread

    Normally when the developer takes on Finance he has a cancellation cost if the mortgage is not taken out by the buyer. Usually when the buyer declines the charge passes to the developer – but this should be stipulated in the contract you signed. This is the cancellation costs and sounds like your developer is trying it on (as well as your lawyer)

    The bank opening costs sounds like a commission the bank charges for taking on the initial mortgage – usually this is around 1% of the mortgage, although if you contest thsi charge it is possible to have it reduced or negated. Or it may be that if your lawyer has opened an account for you he is again trying it on – as Mark said it costs nothing to open an account in Spain and even if your lawyer did open it for you this amounts to 20 minutes work (probably done by a junior)

    Good luck with your claim and lets hope the charge is dropped completely.

    Vince

  • #60209
    Profile photo of Anonymous
    Anonymous
    Participant

    My agent has spoken to my lawyer about this problem.

    The lawyer has agreed to inform the developer during the notary meeting that I am not prepared to pay for the mortgage set up and cancellation costs, I am due to close on Monday.

    However my lawyer has asked me to still send money which will be deposited in his bank account to cover the mortgage set up and cancellation costs – this sounds well dodgy, what do you guys think.

    What incentive does my lawyer have to close the deal satisfactorily if the money to make it easy for him is sitting in his bank account – very worrying.

  • #60213
    Profile photo of katy
    katy
    Spectator

    It is illegal for a developer to charge cancellation costs for not taking their mortgage, your lawyer should tell you this.

  • #60223
    Profile photo of Anonymous
    Anonymous
    Participant

    Katy – that’s rubbish.

    I guarentee you that all of the above is somewhere in the PPC, it always is. Developers will not carry the can for anything, it will be stacked all in their favour. I’ve seen it so so many times.

    Get the contract translated by another lawyer if you don’t trust your own. If he’s asking for the cash then sure as eggs are eggs, he will pay it to the developer. Your only bargaining point will be not to pay up.

  • #60225
    Profile photo of Anonymous
    Anonymous
    Participant

    @gingerbear2 wrote:

    The lawyer has agreed to inform the developer during the notary meeting that I am not prepared to pay for the mortgage set up and cancellation costs, I am due to close on Monday.

    Your lawyers should do what you ask them to do, rather than condescend to inform the developer of this or that. They should be fighting your corner tooth and nail. They should have made it clear to the developer from the very start that you would not under any circumstances pay the developer’s mortgage cancellation costs. They should have informed the developer at once, rather than store it up for trouble in the notary’s office. It doesn’t sound like your lawyers are looking after you with much enthusiasm.

    Let me preface this by saying I’m not a lawyer and so this should NOT be taken as legal advice. However both of the Spanish lawyers I have spoken to on this question agree that asking buyers to pay the developer’s mortgage cancellation costs amounts to abusive clauses (clausulas abusivas) that would not stand up in court. However, it is true that you have to review the contract you signed. If you have signed a document explicitly stating that you are prepared to pay mortgage cancellation costs if they arise then it doesn’t help your case.

    Guest is right about the money. Don’t loose control of it. My advice is think twice before you transfer it to your firm of solicitors (GV&A). I’ve heard about this firm before. Proceed with caution. If you did want to have the funds available to pay the costs in a worst-case scenario, then I would take it along in cash. But don’t let lawyers or developer know that you have the funds on you to pay the cancellation costs.

    The market is tough and developers are desperate to close sales. Under these circumstance buyers have the power, so why put up with crap like this from a developer? Trying to make you pay costs that they should pay themselves. Honestly!

    Mark

  • #60260
    Profile photo of Anonymous
    Anonymous
    Participant

    Gingerbear2,

    I’ve done more research on this question.

    You can’t be forced to pay the Developer’s mortgage cancellation costs, even if it says so in the private contract. The reason being that this would amount to an illegal clause that would be thrown out in court.

    So turn up to the notary with all the money you need to buy the property, but not to pay the cancellation costs. If the developer refuses to complete you have the notary as a witness that the developer is in breach of contract (refusing to complete despite the buyer providing all the funds legally required to provide).

    By the way, I know you are out there completing today – good luck – but I’d appreciate it if you could get back to me regarding the ‘crime on the costas’ topic ASAP.

    Thanks

    Mark

  • #60263
    Profile photo of katy
    katy
    Spectator

    I wouldn’t ever transfer money to a lawyers account to purchase, just get a bankers draft made out to the owner/developer.

    I wonder what has happened to the notaries role in abusive contracts, I thought they were obligied to point out illegal terms in contracts.

  • #60264
    Profile photo of Anonymous
    Anonymous
    Participant

    Definition Notary Spain:

    Money for old rope.

    Nuff said!

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