Woman ruined by Spanish property crash wins compensation

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This topic contains 16 replies, has 9 voices, and was last updated by Profile photo of Anonymous Anonymous 4 years, 1 month ago.

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  • #57105
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    Anonymous
    Participant

    Article about a woman who made a bad investment in Polaris World property winning compensation in a British court.

    Woman ruined by Spanish property price collapse wins landmark compensation ruling

    The comments at the end are all pretty indignant.

  • #112833
    Profile photo of Anonymous
    Anonymous
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    Can’t see why she should have the right to get full compensation for her loss in value on her “second home”. Bad advice on the investment part of the loan is another thing.

    It’s always everyone elses fault.

  • #112842
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    I guess it depends upon the nature of the client/financial services advisor relationship and how the ‘recommendations’ were presented.

    When I was a young adult, I blindly followed financial advice from two different advisors. I paid both of them for their advice. Years later I realized that one of them gave me bad advice – intentionally – that resulted in me losing a lot of money but enriched the financial advisor (he lied when he told me that there were no commissions, which were disguised as registration fees, etc.). I have always felt that I should be able to sue him for all of my money, but due to several transactions and manipulations, the company that he worked for has changed ownership about 20 times, making it impossible to really identify a ‘responsible party.’

    The advice from the other advisor was OK – not great, but the account has continued to increase so I can’t complain.

    When people who have little/no grasp of financial instruments seek advice, the advisor has a duty to have an honest discussion and assess the risk comfort level of the client. If I understand the facts of the case, the couple wanted to pay off their mortgage but the advisor persuaded them to make a risky investment.

  • #112863
    Profile photo of Anonymous
    Anonymous
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    As you say Gary we don’t have all the facts but to be honest they knew what they where investing in and in the end it’s their decision. It’s not like they didn’t know about the morgage. Would they be complaining if it went up in value? It’s not like some kind of ponzi scheme we are talking about… if we are looking away from that the whole financial system is one.

  • #112868
    Profile photo of logan
    logan
    Participant

    Anyone who has been around the Spanish property market as long as I have, in excess of thirty years knows that investing in Spain is and always has been high risk.

    In the last ten years new breeds of seller, advisers and investors came on the scene and started convincing themselves and others buying in Spain was a great idea. No one spoke of the high risk which has always been attached to it. Spain is not the UK, France or Germany. It’s a country rife with corruption in public and private business. The rule of law does not apply in the same way and no investment is secure either in value or status.

    In the past high risk brought high rewards and that was true for a very short while. In any investment bubble it’s the ordinary people who are left holding the lemon when the bubble bursts.

    People who set themselves up as ‘experts’ particularly financial ones have a duty and responsibility to advise from a position of solid knowledge of the market in which they recommend to their clients. The public have a right to expect that in a country where the rule of law applies.

    This judgement is entirely correct and may help to control these so called financial services just a little better.

  • #112869
    Profile photo of angie
    angie
    Spectator

    What an excellent post Logan! 😛

    IMO Sellers (agents & developers) have a responsibility, duty of care, to their customers most of whom put complete trust in them as there was no regulation body to go to. It was masses of purchasers who were left as you say ‘holding the lemon’.

    The ‘bubble’ was formed with: hype, lies, commission led greed, and ridiculous lending etc. 😡

    Despite all that we now know, the Spanish Government does nothing to stop it from happening again such as ‘regulation’ which gets back to your point ‘it’s a country rife with corruption’, there is no willingness on their part to change course at present. 😡

  • #112870
    Profile photo of katy
    katy
    Spectator

    That is why many British call centres who scam people by selling land, shares etc are operated from Spain as they can get away with more there. There were quite a few in Elviria.

  • #112874
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    The ‘bubble’ was formed with: hype, lies, commission led greed, and ridiculous lending etc.

    angie, you omitted ‘criminal activity’ from your otherwise apt list.

  • #112875
    Profile photo of Anonymous
    Anonymous
    Participant

    Agreed. The whole system was and still is corrupt to the core. I’m glad this lady has compensation but part of me wishes that all of us who have been stung could be compensated as it’s just one in a long list of people. Or at least have the chance to hand the key back and walk away with our losses.

    We didn’t buy our flat as an investment, we bought it as we were a young couple with a baby on the way. We needed somewhere to live and the corrupt bank workers scammed us for their own gain. They walk away with no come-back and we have to live with the consequences.

    Hindsight is a wonderful thing. We should have rented or met someone who actually advised us well and would have told us to sell the flat after we have put in the new kitchen and bathroom. If only…..

  • #112876
    Profile photo of logan
    logan
    Participant

    I think they way Spanish property is marketed lies at the root of why so many innocent people have lost a great deal of money.

    Agents/sellers never tell their clients the financial truths because their raison d’être is simply earning commissions. They have absolute no human emotion or empathy towards clients. In Spain agents are not controlled and supervised in the same way they are elsewhere. They can say and do anything they like.

    The second factor is holidays. People who come to Spain are lulled into a form of torpor with the climate and life style. They need very little convincing after that. All they need is a slick patter and they are hooked, part with their hard earned money and eventually lose it.

    No one in Spain who should care and have the power to do something about it, either in government or elsewhere cares a hoot. They simply want your money end of story.

    Of course you can find many, many successful stories of people who have not suffered in this market. I have been extraordinary fortunate over the years. However that is down more to luck and a wide knowledge of Spain, the market and it’s nefarious doings.

    Every Spanish property transaction should come with a severe health warning like cigarettes. Buying property in Spain carries high risk to your wealth and well being, do it at your peril. You have been warned. 👿

  • #112877
    Profile photo of angie
    angie
    Spectator

    Gary, I did forget the ‘criminal activity’ by mistake, however it’s now added 😉

    The thing is, I’ve only ever heard of Town Hall Mayors, a handful of Developers etc brought to book for the crimes, not estate agents, how odd is that? If Spain had prosecuted some of these agents it would have sent a clear message out to others and shown the World it meant business in cleaning up it’s property industry to the benefit of the Government and Country, and importantly to buyers. Confidence could be restored somewhat if ‘Regulation’ was also added 🙄

    itsme, or anyone, I wonder what the true figures really are of all those who have lost money with Spanish property having taken misleading advice from agents during the boom??? 😯

  • #112878
    Profile photo of Anonymous
    Anonymous
    Participant

    I would guess that most had been ripped off at least somewhere along the line. Agents, banks, developers, the notary ‘turning a blind eye’, town halls, market stall ‘overchargers to tourists’ even though you’ve lived there for years, dodgy Brits who rip off other Brits…. sadly the list goes on and on.

    What’s the figure of those who, if the clock could be turned back, wouldn’t have bought in the first place. Not just because of the drop in prices but because when they actually lived in Spain they regretted the move and wished that they hadn’t sold up in the UK or suchlike? Those I know who are actually happy in Spain are renting. Says it all.

    All the agents I met in Spain were ex postmen or suchlike and couldn’t get any other type of work out there because they didn’t have the language skills. Most were with Parador Properties and MedSea and other large commission only based agencies who should be sued to high heaven in my opinion!

    Regulation is difficult… i’m married to an Andaluz and they are never, ever, wrong…… 😉

  • #112879
    Profile photo of logan
    logan
    Participant

    The situation now for former British and other residents who bought in Spain during the boom are miserable. Their options are limited because they cannot sell their properties against drastic institutional sales reduced by 70%. and can only sell to cash buyers. Knock off that figure from your own house and you will see what I mean. Penury. Cash buyers can also obtain a larger margin from banks because the banks are desperate for new cash.

    Add to that the fact that banks are scandalously still offering 100% mortgages on their own properties and creating a situation of impossibility for anyone else to borrow even with a decent deposit and the awful situation looks worse.

    These are the facts of how modern Spain operates. When things go wrong you are on your own and they will hound you the rest of your life. When it goes wrong for them they equally screw everyone else unmercifully.

    If you think that’s harsh, ask any Spaniard effected by it.

  • #112880
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    Anonymous
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    It’s one thing to complain about illegal activity but can you really blame others for a bubble being created and then exploding? Don’t forget that’s it’s regulations of the credit system that makes bubbles like this possible at all. Regulation will never be the answer but a well functioning justice system that can hold people accountable is a must and that’s where Spain is lacking a lot.

    The housing market in Spain is hit tenfold by the facts that Logan just stated. The banks gets backing but in return they hurt the normal sellers even more.

  • #112884
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    Anonymous
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    @Ardun wrote:

    It’s one thing to complain about illegal activity but can you really blame others for a bubble being created and then exploding? Don’t forget that’s it’s regulations of the credit system that makes bubbles like this possible at all. Regulation will never be the answer but a well functioning justice system that can hold people accountable is a must and that’s where Spain is lacking a lot.

    The housing market in Spain is hit tenfold by the facts that Logan just stated. The banks gets backing but in return they hurt the normal sellers even more.

    In USA it has happened like that eversince 2007. Banks led the decrease of prices by selling at discount and then foreclosing the people who got under water with their mortgages.

    Of course the good thing about USA is that one can can send the keys to the banks with no consequences.

  • #113023
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    Anonymous
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    @flosmichael wrote:

    Of course the good thing about USA is that one can can send the keys to the banks with no consequences.

    & there lies one of the major contributing factors to the whole problem.

  • #113030
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    @gus-lopez wrote:

    @flosmichael wrote:

    Of course the good thing about USA is that one can can send the keys to the banks with no consequences.

    & there lies one of the major contributing factors to the whole problem.

    It would actually be a good thing if the government didn’t insist on bailing the banks out. That way they wouldn’t take unecessary risks.

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