This week has been an interesting one for thought-provoking challenges to the valuers of the Survey Spain Network.
We have been asked to value a house on a large site in Marbella. Looking through the paperwork, we’ve discovered that approximately 200 m² has been sold by private contract about 15 years ago to a neighbour for their driveway. It appears that the sale has not been notarised or registered. Unfortunately, the large property is now subject to bankruptcy proceedings in the UK and the Trustee has the obligation to deal with the whole registered property, including the 200 m². Therefore, it looks like the neighbour may have to buy the 200 sq m of land for the second time, in theory then suing the owner of the large property, but as they are bankrupt, there’s not going to be much return from that. The lesson learned is always to make sure that a private contract is notarised and then that notarised contract is registered, as that is the only way you will have a certain title against all comers.
VPO Subsidised Housing
Another valuation, this time on Tenerife. One of the owners of the property has died and we are required to provide a current market valuation for tax purposes outside of Spain. Again, looking through the documents, we discovered that the house is registered as a VPO, which means that it’s construction was Government subsidised and it’s the equivalent of council housing in Spain. Unfortunately, it also means that the house should not be sold at full market price for 30, 40 or even 50 years after its construction. The current owners bought it a few years after it was built and obviously their lawyers had ‘missed’ the fact that it was a VPO. Now, the client has to wait for legal advice on how to buy themselves out of the VPO situation, with the methodology for that, as for the creation of VPOs, being different in each of the various Comunidades of Spain. We have carried out a valuation of the property as if it was a normal apartment, but obviously, if it is subject to VPO restrictions, it cannot have the same value as a ‘free’ apartment.
A beautiful house on a clifftop in Mallorca, with a cave underneath, just above sea level and not connected in any way to the house, other than by a very steep stairway down the cliff face. It turns out that the cave has been registered separately and has separate owners. How does that comply with their legal nicety that a property is owned from the centre of the earth to the heavens above? [With certain exemptions to allow extraction of government-owned minerals, planes to fly across, and the like] It appears that the cave is treated in the same way as a basement would be, but the valuation of it is going to be somewhat tricky!
Planning Permission cancelled
Valuation of a partly built property is always difficult. This one has had a further refinement added. Full planning permission was given for the construction by the local authority, complying with the Regional plans. However, political changes occurred within the Region, and the planning zoning for the area was changed from urban to rustic. Under rustic zoning, no construction whatsoever is permitted. We have assumed that because there is existing permission and the property is partly built, that completion of the construction will be allowed, as long as it complies to every dot and comma of the permission granted. Any variation or additions to the property in the future are likely to be prohibited. Unless, of course, there’s another political change. We have also advised our client to seek specialist planning and legal advice!