Property is expensive. For most people their home is the biggest investment they ever make, and their most valuable asset, which has to be protected from damage or theft. The bigger the investment, the more you sacrifice to make it, the more you have to lose if things go wrong, so property is also the biggest risk in most people’s lives. It is also the biggest cost-centre for most families, with taxes, financing, and maintenance bills that never stop rolling in.
The high-value, high-cost reality of property investing also makes it an ideal target for extortion rackets. If you can be denied the use of your property, whilst the bills keep rolling in, then someone has you over a barrel, and can extort money from you, if the state doesn’t protect you.
This is exactly what happens with squatters in Spain, where the squatter-friendly legal and political framework, plus high level political support for squatters, leaves owners almost defenseless against adverse possession, and therefore an obvious target for extortion.
How does the extortion work? The key is in the costs you face if squatters take over your property. It’s going to cost you a bomb, but you can’t walk away without facing even more costs, all secured by your biggest asset. And the less well-off you are, the higher the price you pay. A rich person can cope with the costs, but what if you are not rich? What if you have saved and made sacrifices to afford a property, but you don’t have much of a financial buffer if things go wrong? Squatters can be ruinous for owners who can least afford it.
Because here’s the thing: In Spain, the State protects squatters more than property owners. Squatters can deny you the use of your home, run up big costs you have to pay, and trash your property with impunity, whilst you face fines and prosecution if you don’t pay up.
Here are the costs you face if squatters get installed in your Spanish property, and which allow them to extort money from you:
Costly and lengthy eviction process. If squatters get into your property, you have to start eviction proceedings, otherwise you will never get your property back, whilst the bills mount up. The legal process can take months, or even years, because squatters, especially squatter mafias, know all the tricks in the book to delay proceedings, and run rings around the system. The longer it takes, the more costs you face.
Lost income or use. Whilst squatters are in your property, you can’t rent it out, and you can’t use it. So you might lose thousands of euros in rental income, or have to pay rent yourself if you can’t use your own property. You certainly lose the utility value of your own property.
Utility bills. If you cut off the utilities like water, electricity and gas you can be prosecuted for coercion, a potential serious offence with stiff penalties. So you have to keep paying the bills, however large. There are stories of squatter mafias deliberately racking up the utility bills to pressurise owners into paying them to leave.
Ownership costs. The ownership costs like taxes and community fees have to be paid even if your property rights have been denied you by squatters. As a second home you will also have to pay an imputed income tax for a property you can’t use.
Renovation costs. Squatters are not likely to look after your home. In most cases your property will be trashed by the time you get it back, leaving you with a big renovation bill running into the thousands of euros if it is ever to be made habitable again. Squatter mafias have an incentive to wreck the property as part of the extortion, as they run no risks, and face no costs if they do.
Time cost. Dealing with squatters can take up a lot of your time. Every minute you spend on a squatter problem is a minute you could have spent on something better. Time is our scarcest resource, and you never get it back. How valuable is your time to you? What is the opportunity cost? Squatters steal your time.
Emotional cost. Dealing with squatters can be very distressing. The whole situation is so unfair, and so unjust. It comes with a high emotional cost.
Every case is different, but these costs taken together can be ruinous, especially for owners who are not rich, and who have made financial sacrifices to own a property in Spain. Dealing with squatters can cost you many thousands of euros, and take up a lot of your time and energy, draining you emotionally over months or years. The alternative is to pay the squatter mafia a few thousand euros to leave now. Owners can be forgiven for caving into the extortion, which just encourages more extortion, all facilitated by Spain’s squatter-friendly system.