December 7, 2007 at 10:44 pm #53510
“WHERE’S OUR CASH?”
Expat buyers face losing thousands as construction company sinks
By Richard Torné
THE illegal building scandal in the Almanzora valley took a dramatic new twist this week following the revelation that a construction company behind a large housing development in Zurgena has gone bust.
Scores of expats could now lose their life’s savings in the wake of news that the company, New Medina Villas (NMV) S.L., has filed for insolvency, Costa Almería News can reveal.
Expats who paid hundreds of thousands of euros as deposits are now being advised by lawyers to present their claims for a full refund once the company’s insolvency claims are made official through the government’s official bulletin – the Boletin Oficial del Estado (BOE).
Buyers – legally classed as ‘creditors’ since they lack title deeds- will then have only one month in which to claim for damages, according to lawyers.
Many expats bought their villas in the UK through Parador Properties, a company with offices in Britain, Cyprus, Ireland and Spain.
The company, which put on glitzy video presentations to entice prospective home owners, assured prospective buyers that the developers were totally trustworthy and that the local council had granted the necessary building permits.
NMV, which was set up in April 2004 with an initial capital of just 3,000 euros, targeted the area of Zurgena almost exclusively and launched three development projects called ‘Llanos del Peral’, ‘Orange Manor’ in the neighbourhood of La Alfoquía and ‘Lemon Tree Island’ in Los Cabreras.
Grupo Location acted as the main sales agent in Spain and in less than a year sold 57 homes out of a projected total of 205 to families of expats.
But the properties were never completed.
The building permits granted by Zurgena council amounted to nothing after a court froze the development on the grounds that the properties had been built on rural or non-urban land and were therefore illegal.
Following news that the regional government had questioned the legality of the building licences, the bank which had agreed to finance the project, Bancaja, decided to pull out.
Although a bank loan and the money of clients were used to finance NWM to the tune of more than 12.3 million euros for two of the developments – in ‘Llanos’ and ‘Lemon Tree’ – NWM is claiming that it spent 5.6 million euros on the ill-fated schemes with 1.7 million euros going towards what the company vaguely describes as “commercialisation costs”.
Millicent and Stephen Williams paid a 30 per cent deposit towards their three-bedroom, 208,000-euro villa in 2005 and were told that their dream home would be completed by December this year.
Instead, while on a visit to Zurgena in February to see how their home was progressing, they were horrified to discover a deserted building site.
Mrs Williams said: “We were in shock. We sold our house in England and came here expecting to see a finished property.”
A downcast Mr Williams said their plot “had not even been started”.
To make matters worse, they were given no assurances by staff at the Grupo Location real estate agency and were rebuffed with claims that no-one spoke any English.
Despite eventually agreeing to return their deposit within three weeks, the couple said this week they were still waiting for Location to refund the money.
Mr Williams said they now faced the prospect of losing everything “through no fault of our own”.
Another expat couple, Stephanie and Alan Armstrong, said they had initially been impressed by Parador Properties’ “professional presentation” and after a visit to Zurgena eventually paid more than 100,000 euros towards a property.
But the couple became suspicious when they discovered that construction work had been stopped and that they did not have the necessary bank guarantees.
Despite their concerns, Parador insisted that they had “every confidence in the integrity of NMV” and were advised to continue with the purchase.
A legal source consulted by this paper insisted that those affected had a right to damages “even if their entitlement to the house was rescinded by the courts”.
But he warned expats that they “could miss the boat” if they did not act fast by seeking legal representation.
Purchasers also face the added problem that they do not own the land or title deeds for their properties – and no homes to show for their troubles.
Neither Grupo Location nor Parador Properties were available for comment.
December 8, 2007 at 12:09 am #76540
If these things happen in Spain, one of the most developed countries in the world, I wonder what is happening in Morocco, Cape Verde, Egypt,
Thailand, Turkey adn Dubai.
Actually I know one story from cape Verde: it seems that one big company there built many properties with sand taken from the beach i.e. filled with salt. Now, when the costumers are complaining because of the cracks on the walls, they are told that only in wet climate the salt is bad fro the houses…
December 8, 2007 at 11:55 am #76542
I think it’s a big concern that Parador Properties, a British company, are so heavily involved not only in promoting the sale of these houses, but also providing so much reassurance to clients that the homes are legal and the developers trustworthy.
I have heard Parador Properties mentioned in relation to many other developments with ‘issues’ and I understand that UK Trading Standards are having a look at them.
The forum ‘Real Estate Topics, News & Discussion’ is closed to new topics and replies.