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I have been asked by a local developer to market the properties they are building on a development of mixed detached and link detached villas. They are telling me that a payment of 25% plus the total purchase price IVA will be the only payment required until completion of all building work and the necessary legal building paperwork is in place, and that on this 25% payment the buyer will go to the notary signing the escritura and therefore be the legal owner of the property.
I have not come across this before and would therefore value any observations, especially from the legal proffession on the forum.
Jim
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OK, my response may be looked on as being offensive or insulting, but assuming that you are an agent and in business, I cannot believe that you would seek such advice from a forum.
I have preached on to purchasers who complain they have been caught, swindled, robbed, etc., to always seek professional advice.
Sorry, they may be lawyers who contribute on here, but for goodness sake, show some professionalism and seek professional advice.
Get sight of a draft contract.
Not surprising the property market is the way it is? -
It doesn’t sound right, only my opinion though 🙂 Why would anyone want to “own” something that isn’t built? Could it be that the developer covers his mortgage liability like this. Does need to have legal advice.
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Hi MG no offence taken, We have spoken to our solicitors and we are waiting for contract details to eatablish the legal implications before we decide if we can market these properties.
Dont recall anywhere where I asked for advice, simply asked if anyone had come accross such a sheme and their observations
But hey, as you say I am an agent therfore must be unprofessional and resposible for the state of the Spanish Property Market, but I am glad I dont make as many assumptions without facts as you have MG.
Jim
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An observation differs from an opinion, which I believe was asked for?
Assumptions, I did assume you were an agent, no effort needed to work that one out.
” I am an agent therfore must be unprofessional and resposible for the state of the Spanish Property Market”, maybe not you, but greedy, unprofessional agents must accept some of the blame, as must purchasers who were aware in advance of the risks but still took a chance, thinking they could make a fast buck. Much like the dubious developers.
Still say think that if it were my business, I wouldn’t ask a forum for backup, support, etc., if you are using a reputable lawyer, which again I assume you must be, if an established business.
Why pay a lawyer’s fee if you feel you need to seek opinions of others? -
Yes MG an observation does differ from an opinion, which is why I asked if anyone had any observations, was careful to say that in the message but yes I did mistakenly say opinion in the subject line (slapped wrists)
Perhaps I should not have said I would value any observations as they would have no real value, but I do know that some people are interested in the different angles used by developers to promote their properties in an increasingly difficult market so thought it was worth posting.
Anyway enough said, home for a glass or two of vino now
Jim
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Sorry, I thought you had “Comments or opinions please” as the thread title?
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jiminspain
I’ve not seen this before in Spain but know of some developers using it in Bulgaria, they call it the Advanced Notary Deed and from what I can gather it’s done over there because of some kind of tax loop hole whereby the builder/developer only pays tax on the 25 % and then in effect “SELLS” the property.
The developer then issues a new contract to the buyer , so that in effect the buyer then pays the builder to “finish” the property.
This loop hole in BG tax law only applies up to the point of roof stage payment or 50%.
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Jim – regarding the advance IVA payments, there was quite a good thread on this subject:
https://www.spanishpropertyinsight.com/forums/viewtopic.php?t=1246&highlight=iva
Would you willingly pay taxes in advance unnecessarily – and not even to the tax man but to a private company? I know I wouldn’t.
No good lawyer of any prospective purchaser would advise their client to pay this. Just the appropriate % in proportion to the deposit. -
Am I alone on this ❓
This thread is called comments or opinions and jiminspain asked a simple question if he cant he have a civil reply from some then dont answer. ❓
If I were him I would get opinions from as many sources as possible including a good solicitor to try to cover may arse.Regards
Jim 😕
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Hi Jiminspain,
Ive not heard of this before in Spain but had heard of a similar scheme also in Bulgaria. Im always wary on different ways to try and sell something that is different from standard so hopefully you will post a reply when you get more information.
Hopefully this will help the other forum members if they are approached with a similar scheme.
Bernard
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“if he cant he have a civil reply from some then dont answer.”
Yes, that is why I stated “seek professional advice.” -
Requested contract details twice now, no details but a growing pile of marketing material which may well soon be filed under B.
jim
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B for “bin it” ? 🙂
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Hi Jim
it sounds a bit dodgy to me. If the purchaser “Owns” the property before it is built – I assume that all he actually owns is his/her plot of land – then what incentive is there for the builder to finsih. It appears a great way for a builder to completely avoid any late completion fees, worrying about licence to build etc because the onus would then be on the “New Owner” of the land. Incidentally they would also be liable for 16% IVA because they would only be selling the land (they cannot sell ownership to something that doesn’t exist as far as I know)
Just my opinion of course – or should that be my observation
Vince
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Cheers Vince
You may have problems with your eyesight but you wit remains razor sharp.
Jim
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