Most decisions are a balance of pros and cons, and when it comes to buying a property in Spain, there is a whole industry geared towards pointing out the pros and convincing you to buy, and hardly anyone pointing out the cons, the pitfalls, the reasons not to buy. In this series of articles on reasons not to buy property in Spain, I try to point out the pitfalls that you need to be aware of before you take the plunge.
One consideration to bear in mind when buying a property in Spain is that the justice system moves very slowly indeed. So if things go wrong because someone doesn’t keep their side of a bargain, you could spend years in court seeking justice, and even if you win, it could leave a bitter taste.
Take the example of Bill Hagerty and Liz Vercoe, journalists from London, who bought a property in Estepona, on the Costa del Sol, in 2006, and then had to take the developer to court over snagging defects.
“The Spanish court system is so slow to publish its judgements and decisions that, even if you win your case (in our case against a developer for €11,900 for snagging defects in the property), the defendant has months, if not years, in which to liquidate their company, and close down bank accounts without paying the successful plaintiff,” they told me. ”Winning in court can still mean losing.”
Even if a judge rules in your favour, the legal system can still let you down. “The liquidator, according to our lawyer in Marbella, has no reason, despite the published judgement, to automatically include the plaintiff as a debtor or inform them of progress with the liquidation. You have to pay a lawyer to inform them and that goes via the very slow courts again. More years pass. You are simply left giving your lawyer sums of money to track down possible bank accounts in some wild goose chase. Not exactly Dickensian Jarndyce v Jarndyce, but 7 years of false hope.
“We went from elation on the day of winning the case in Estepona, in February 2012 (case started in 2009 after three years of all the usual snagging/buro fax/ legal letter stages by our lawyer following purchase), to gradual despondency about the system. The judgement meant nothing in practical terms of a claim against the developer. By the time of our lawyer’s return from maternity leave in April 2013 when she forwarded the judgement of the previous July, our developer had gone into liquidation. We thought, however, that its winding up would automatically include our debt. But no.
“March 2015 we were asked to once again provide the evidence (already given in court) of the costs. This we supplied and our lawyer confirmed it had been submitted to the courts. On chasing an outcome, again we were advised by our lawyers that Estepona Court is the slowest in the country.
“February 2017 we asked our lawyer what is happening and received this reply: “Today I spoke with the litigation lawyer that is handling the procedure against your developer. He sent me a copy of the resolution whereby the embargo on assets of the promoter was ordered. The litigation lawyer found two bank accounts in the name of the promoter and provided the relevant information to the Court. He’s now waiting to receive details of the embargoes and the balances of the bank accounts in order to see if this procedure will achieve good results. We hope to receive soon information about the embargoes. I believe that you are already informed about the terrible slowness with which the courts of Estepona work.”
“FInally this year 2019 we receive this from our lawyer. “Sorry for the delay in coming back to you. the court tried to take funds from a bank account but unfortunately with no success. If you transfer a small provision of funds of 100 euros I will make a new research at the Land Registry to see if the company has any new asset.”
“Seven years on? I don’t think so,” says Liz wearily. “Please help others avoid the same pitfall.”
Bill and Liz’s case shows how slow justice is no justice, and you just end up throwing good money after bad. The Spanish justice system can be notoriously slow, though it does vary from region to region, and even province to province. And the legal processes surrounding court decisions can work against you even if you win in court, as they make it difficult to turn a favourable judgement into meaningful compensation.
Why does the Spanish justice system move so slowly? There are several reasons, but one is because politicians don’t win elections promising more resources for the judiciary. Another reason is because Spanish lawmakers often pass vague and confusing laws that invite problems and clog up the legal system. I could bang on about several others but you get the idea.
In my experience the Spanish justice system delivers the right verdict in the end, but tends to move too slowly to deliver timely justice, and justice delayed is justice denied. This increases the risks of buying property in Spain. So if you are going to buy, make sure you do a thorough due diligence, and don’t rely on the justice system to help you if things go wrong. Before you buy consult with the best lawyers, and never use one recommended by someone trying to sell you something.
You can find trusted lawyers in my Spanish real estate service directory.