[Anonymous]

Scenario- bought an off plan 1 bed flat in La Linea (border Gibraltar) 2 years ago, construction now finished and licence of first occupation granted. I’m in it for 30k euros as we speak, the mortgage etc has been agreed.

It’s pretty obvious its no longer worth what I paid for it, and there is a cause in the contract that if I’m in breach of it in anyway, I loose 35% of the money invested so far, so thats the dilemna, try to get out and burn 10k or go ahead and try and rent in an ever competitive market. Also it occurs to me I may have to sweat and spend money on legal fees to get my money back after reading other topics where banks have done the dirty on the guarantees.

I appreciate it could be alot worse for me, but any advice would be appreciated.

Jon

[Anonymous]

Hi Jonnyhew
You posted
“Also it occurs to me I may have to sweat and spend money on legal fees to get my money back after reading other topics where banks have done the dirty on the guarantees.”

For what my input is worth if I could get the money back on a one bedroom apartment I would.
Think many would like the option of having their money back even with a percentage loss on 2 beds.

One question would sort out my advice
SHOW ME THE MONEY 🙂 If its on the nose then take it.
A good solicitor would have to advise you on your situation however.

If it means court then join the queue.
With me its 5 years and counting and many worse than that

Just Frank 8)

[Anonymous]

jonnyhew

i think to start with you need a good independant lawyer (Mark who runs this site has a list) to go over your contract with a fine tooth comb.

I think the fact it’s finished and with it’s LFO means you will have a tough job getting any money back from the developer. People with massive breaches of contract still spend years trying to get anything back. With all the legal costs involved, and the way the Spanish system works, you will need a very strong case and much patience to get any joy.

[Anonymous]

Thanks both, really don’t fancy the stress of the Spanish legal system.

One question I forgot to ask, what’s the legal implication of owning a second property in Spain?

Jon

[Anonymous]

Jonnyhew
Where is the first property ?
You would need the advice from a solicitor however the advice would be to make a seperate will for a start.
As Goodstich has pointed out the Banks or developers are not exactly falling over themselves to hand out money even on the most abused cases.
Again though why not ask the developer and you may be suprised
That fact that I would consider is why I bought in the first place?
Little has changed the price MAY be less than you may like depending on many factors including of course what you paid.

Regards

Just Frank

[Anonymous]

Jonnyhew
Where is the first property ?
You would need the advice from a solicitor however the advice would be to make a seperate will for a start.
As Goodstich has pointed out the Banks or developers are not exactly falling over themselves to hand out money even on the most abused cases.
Again though why not ask the developer and you may be suprised
That fact that I would consider is why I bought in the first place?
Little has changed the price MAY be less than you may like depending on many factors including of course what you paid.

Regards

Just Frank

[Anonymous]

Good point Frank, I bought it in all honesty as a long term investment for 15 odd years when, hopefully my first son will go to Uni, I was hoping by then, my financial shape would mean he could have the rental income to help him through.

[Anonymous]

Spain is not the best place for a buy to let property if the reason is purely investment – but a bit late for that now.

I take you are non-resident and if that’s the case then rental income is taxed gross – ie no deductions for interest or whatever other costs you might incur.

Getting money back is usually quite difficult even if your contract permits it etc but it’s always nevertheless worth exploring. It might be the developer would agree to a reduction if they are desperate to get you to complete?

Where is the value at the moment compared to your contractual completion price?

What does your own research tell you as regards being able to rent the property and the rental income you could hope to achieve?

15 years is long term so maybe you have to ignore the current values if the rental income would meet mortgage etc.

Definitely consult with an independent solicitor.

[Anonymous]

Spain is not the best place for a buy to let property if the reason is purely investment – but a bit late for that now. My 3rd go in 7 years- 2 wins, 1 loss by the looks
I take you are non-resident and if that’s the case then rental income is taxed gross – ie no deductions for interest or whatever other costs you might incur. No resident, sorry I didn’t make myself clear, my wife is Spanish national
Getting money back is usually quite difficult even if your contract permits it etc but it’s always nevertheless worth exploring. It might be the developer would agree to a reduction if they are desperate to get you to complete? On the phone now, many thanks for that point!

Where is the value at the moment compared to your contractual completion price? Impossible to say as I can’t find an agent who’s sold a 1 bed in La Linea recently, there seems to be no market at all!
What does your own research tell you as regards being able to rent the property and the rental income you could hope to achieve? 500-600 for top banana 1 bed (exchange rate depending), gaming industry employees tend to work in Gib and live in Spain so fingers crossed.

Thanks again.

[Anonymous]

jonnyhew
Hang in there as the reasons you bought are still there
I.E not just a short term financial gain
10 to 15 years is a long time and it will return

Regards
Just Frank 8)

[Anonymous]

Sounds like you are no stranger to investing in Spain.

Although your wife being Spanish doesn’t change your tax or her tax status. Although it does help when it comes to dealing with the Spanish.

If you think you have a good property and a decent chance of renting and being able to meet mortgage payments then like Frank says just ride the waves!!

Good luck!

[Anonymous]

A few years ago. I was working in Gibraltar. Every second person I came across through my work could not afford to buy or rent in Gib, so rented in La Linea and cross the border twice a day. This could be one of the markets for rentals. I am sure that you are well aware of it.

[Anonymous]

Yes aware- average one bed in Gib 750 sterling per month, so average one bed in la linea should still attract at 600 euro, touch wood.

Thanks again for all your help.

[Anonymous]

Was in a similar situation myself. The terms of my PPC allowed me to elect not to complete & have a good % of my initial investment returned.

I looked at the purchase cost of the property (agreed in 2005) & then compared this to what I could get in the current market.

On balance it seemed to make sense to terminate the deal. The developer agreed a repayment figure & a date by which I would be paid.

All seemed well until the developer entered administration. Now I don’t have the option to buy the original property & it’s looking like an up hill struggle to get the administrator to honour the terms of the PPC.

Good Luck with what ever you decide to do.

[Author]

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