Don’t criticise the Junta’s actions, just the delay

Spanish Property Insight Forums Spanish Property Forums Spanish Real Estate Chatter Don’t criticise the Junta’s actions, just the delay

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    • #55571

      This opinion was sent to me by an experienced chartered surveyor working on the Costa del Sol:

      On reading through Forums on many Expat websites the feeling gained is how many negative, depressingly paranoid, ‘victim’ comments there are to positive action by the Juntas at last. Many more Spanish nationals than Brits have lost out. Think it through.

      Most councillors and mayors of towns are from the local community, voted there by their family, friends and neighbours. It’s the natural way. When there is an uncertain town plan (PGOU) or one created many years ago by someone from another neighbourhood or family, it’s not going to be treated with much respect. Then one of the family is approached by a builder who is willing to give so much money for his land that the whole family will become independent, affording to send their children to college or university to better themselves instead of having to take a job as soon as they can leave school to give the family income. One problem, the land on the old plan isn’t zoned for development. So the whole family gets together with the councillors and mayor and they say we’ll take the money now and deal with the problems if and when they happen in the future.

      The developer team is keen to proceed as they are employees and know that they will only have work if they find developments. In the past, the promoter on the one hand had banks pushing money at them for development and on the other buyers greedy to invest in the finished product before it was built, as they saw opportunities and didn’t look to closely at the consequences.

      But somebody, somewhere should have said, STOP, this is illegal and maybe they did. Perhaps a lawyer or a councillor who could foresee that it could end in tears. But they were swept aside in the rush for profit. It appeared to be a winner for all, in the short-term at least.

      Time went by and things changed. The Junta noticed that the development was happening, was outwith their approved plan and put in action the slow legal progress to stop the development and penalise the local politicians for granting the permission. And the money for the development started to run out. The banks were pulling back with construction funds when the developer eventually had to admit that he hadn’t sold enough of the property to independent buyers to cover the construction costs. The options he had given to his friends, directors, employees and even the individual bankers themselves were never going to be taken up. The greedy buyers were coming to their senses and realising that there wasn’t a huge pool of other buyers out there desperate to buy from them at an inflated or indeed any price. And so the whole financial structure crashed, leaving the building skeleton unfinished and unloved.

      Now the retribution begins. The speculator buyers haven’t the money to complete their purchase or don’t want to put good money after ‘bad’ and try by all means to pull out of the contract or just walk away from their deposit. The developer can’t finish the development as he isn’t getting the completion income he had depended upon. He has already spent the ‘profit’ on good living and another development site that is now nearly worthless, but still has to repay the huge loans he received from the bank. He finds that he has no support and only demands from his previously friendly banker and eventually has to tell all his suppliers and employees he can’t go on, he can’t pay them anything and the company is ‘bust’. Eventually the bank takes back all the land and developments that were the security for the loans, which land they now ‘find out’ doesn’t actually have any development permission and so they have nothing for all the money they have lent. They are in trouble, but if they can keep the original book values in their accounts for long enough, perhaps values will come back. But don’t ask them for a mortgage or any loan of any kind because in reality they are as ‘bust’ as the developer before them.

      And all the time the legal processes have been grinding on and now the final appeal decisions are coming out against the town hall. The councillors and mayor acted illegally by ignoring the PGOU and must be punished. They are fined and go to prison and are prevented from holding political posts for a few years. Their political party casts them out, ignoring the fact that they were the source of much of it’s past income, declared and otherwise.

      But the families of the village, the councillors and mayor are now wealthier, healthier and better housed and educated if they’ve been wise. Or owners of depreciating cars, boats and sclerosis of the liver and gout from all the rich living if they’ve been imprudent, with families unused to earning a living as the ‘land money’ has meant that they haven’t had to. They’ll only get up to no good as desperation and the desire to keep up their lifestyle sets in.

      And the future. Well it can go two ways. We’ve seen all of this before in the late 1980’s and early 90’s. “Never again” it was said, but another generation came along and the opportunities were just too good to miss and anyway, the culture is to live for today and let tomorrow take care of itself.
      The laws that are already in place can be given teeth and enforced quickly. The lawyers and other professionals will develop a ‘professional conscience’, even if it’s only because now ‘big brother’ is watching and will catch them before they can hide the gains. And the money laundering laws are sufficiently swift and wide to prevent most professionals advising or even getting involved in the fringes of clients doubtful schemes.

      So don’t criticise ‘Stop Notices’ or the like. They could have prevented the worst of it happening in the first place.

      Campbell Ferguson FRICS
      Survey Spain Network of Chartered Surveyors


    • #98239

      Interesting. I dont know what to make of it. Is he saying because of greed all is OK & so are its consequences or is he saying that the end justifies the means.

      This is wild West mentality common in all med countries. The bodies e.g college of Architects, college of lawyers, punishment suiting the crime, slowness of the Court, Corrupt officials at Town halls etc. The bodies mentioned are ineffective, weak full of people who are not fit for the jobs & are only there because of nepotism .

      The Junta was well aware of what was going own they are/were too locked into their political dogma & own corruption. Yes, of course the Spaniards suffered as much as non Spaniards probably more if the population % is to be taken.

      Their maybe greedy buyers who did not realise that the buying selling cost could add 25 % of the price this means that they have to wait a few years of the property growth to break even and when hundred’s of properties were ready what marketing muscle they had to be able to sell their unit against the developers sales office, marketing brochure and employing attractive ladies.

    • #98247

      I don’t know what to make of it either 😕 I agree that is the way it happened. I don’t agree with the first para:

      On reading through Forums on many Expat websites the feeling gained is how many negative, depressingly paranoid, ‘victim’ comments there are to positive action by the Juntas at last. Many more Spanish nationals than Brits have lost out. Think it through.

      I haven’t seen many comments re. the junta, mainly about crooked Mayors, Developers and Lawyers. There may have been the odd comment that the junta knew what was happening eg. in Axarquia, which they are quite right to say because of course they knew.

      I would be interested to know where the evidence is for the claim that more spanish than British have lost out…Que! In the coastal areas purchase of developments were sometimes as high as 98% British purchased. The market was British led and as prices rose most spanish were out of the market from about 2003. There will be some spanish who have lost money but small in the scheme of things. Even if it were so does that make the whole debacle ok. for the “depressingly paranoid victim comments” . I think whatever was written after this first para sweeps away any worth of the rest. So as Shakeel said…what to make of it ❓

      Well he got an advertisement for his website :mrgreen:

    • #98250

      My reply to Mr. Campbell Ferguson FRICS

      Dear Mr. Ferguson

      I am one of the many negative, depressingly paranoid victim’s of Spains ‘Wild West Show’ – laughingly called a property industry.

      I say “laughingly” as all industries are supposed to be regulated and customer-protection should be in place via an honest and corruption-free legal system. There are those of us here who know better, sadly having to learn the hard way.

      Your eloquently-explained version of how this corruption festered itself is no news to most here. I personally would sum it up more concisely: the whole shoddy industry has been a self-perpetuating boil. From the Spanish landowners right through to all those who abused their position of power and trust, and it is yet to be truly lanced. Similar to the previouse posters, I am also confused as to your motivation and actual point of writing such a piece. I have to say I would be somewhat more impressed with your missive if I saw at least some support from you for the likes of Mr. & Mrs. Prior in Vera.

      You ask not to criticise the Junta with their stop notices nor, I gather, any demolitions that may be on the horizon. Well in all honesty the day I may be able to muster one ounce of respect for the Juntas of Spain is when, in acknowledgement that this whole situation is completely of Spain’s own making, they start digging deep into their pockets, reach for some of that tax they have been gleefully collecting from purchasers and before touching a brick – start paying some bloody compenstion.

      I do hope this letter is not too depressingly paranoid and negative for you. Trust me, we understand the impact of such emotions courtesy of our Spanish property-purchasing experience. With such a proud Scottish name, would I be far off the mark if I suggested a wee dram may help?

    • #98251

      Charlie. I second everything you posted. I hope Mr ferguson reads the forum.

    • #98253

      Charlie you have an exellent way of articulating what we all think about this “tome” 8)

    • #98254

      Just in case he doesn’t Shakeel, maybe I should send it to his e-mail address he so kindly linked above.
      On the other hand, I’m hesitant to depress him with my paranoid negativity.

      Katy – I even wonder if he knows that most purchasers under the threat of demolition happen to be holding building licences and LFO’s stamped by the Town Hall, all i’s dotted/t’s crossed at the notary and have paid through the nose in taxes connected with said purchase.

      Is the “positive action” by the Juntas that of tearing down peoples homes ❓

      And I wonder if his article would be worded any differently if his parents happened to be the Priors.

      Mr. Ferguson asks us to “think it through”. Has he?

    • #98255

      Charlie. He reads it or not. In his heart & his conscious he is aware of the truth. The nationality of the buyers who have suffered does not matter.

      If he feels that we should be having some kind of conciliatory mood with the Junta. He has not stated as why & what if anything action the Junta is planning to take in order to pacify the situation.

      With this kind of leaning I dont think I would like to use him professionally.

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