Posts Tagged ‘help’
FOLLOWING on from last week’s revelations with regards to the financial issues at Polaris World, the EWN approached a Solicitor involved in the saga to try to find out what the best course of action might be for the hundreds of investors that have been affected by its downfall.
According to reports, Murcian Real Estate giant, Polaris World, has accumulated debts of over 100 million euros, for which it now has to recompense its principle creditors, Bancaja, CAM, Banco Popular, Banco de Valencia and CajaMurcia. However, what is worse than this are the consequences to the innumerable house buyers who put their faith in Polaris’ sound reputation, pledging thousands of euros in ‘off-plan’ property investments.
The group was founded in 2001, and has since developed to encompass 60 separate companies and 6 prestigious residential complexes, sprawling over 30 million square metres of residential or commercial land. After two years of declining sales and spiraling running costs, Polaris World has acknowledged that 4 of the urbanizations (El Valle Golf, Alhama Golf, Hacienda Riquelme and Hacienda Verde), and15 subsidiary companies, including two hotels (Mar Menor Golf and La Torre Polaris), Nicklaus Golf Trail, and El Oasis de Alhama commercial centre are among its assets that have fallen into a state of “insolvencia actual”.
BANKRUPTCY
The EWN spoke to Oscar Ricor of ‘Ricor Abogados’ in Torrevieja, who is representing a number of expats who are in fear of losing investments pledged against properties in Polaris World. His first words of advice were that anyone who thinks that they might be affected by the company’s financial struggle must take action immediately as once bankruptcy has been filed it can take more than 5 years to reach a solution.
He claimed that “If investors are to stand any chance of getting their money back then they should file a complaint before the company hands over to its creditors, otherwise the amount owing will be swallowed with the mass of other debts”, emphasizing that “time is of the essence”. He went on to describe the bankruptcy process whereby assets are sold and the first portion of profit is paid to the Government to allay tax and Social Security debts, then the principal financiers, with the remainder being offered to major suppliers and employees, before a thought is spared for house-buyers.
Mr Ricor introduced the question of what substitutes a “completed” property, in the eyes of the authorities, as even those that appear finished and have water and electricity supplies must be officially approved and issued with habitation certificates, which does not usually happen until an entire urbanization or phase is complete, including adequate road links and lighting. This petition must be submitted by the Constructor, who is at present in no position to fulfill this obligation.
ACTION
Mr Ricor stated that several people who have paid deposits have already began court proceedings in the hope of gaining compensation, or at least assurance that the contract will be seen through to completion, accounting for fluctuation in the market price since the contract was agreed. He said that by acting now their cases will take priority and are more likely to end in a satisfactory conclusion, and urged anyone who is in a similar position to follow suit.
It is worth noting that by approaching a Solicitor who is already dealing with Polaris cases or those of Trampolin Hills, the ground work has already been done, and you are guaranteed the support of others in the same situation. Relying on the “Strength in numbers” philosophy, Mr Ricor concluded that “The more people who file complaints against the company the stronger their case for redress”.
Taken from the Euro Weekly News.
Article about problems at Polaris World, published in the Euro Weekly News..
A) INTRODUCTION: Spain has an enviable climate & quality of life but if you have the intention of moving here to live you need to know all that is necessary so that your dreams do not turn into nightmares. Spain, as we know, is suffering a property crisis, we do not know its roots but it runs very deep. Here we are giving a simplified but concise guide with the “key-points”:
I. - URBAN LAW IN SPAIN IS CONFUSING AND HARSH:
- Why confusing?: There exists a national legislation,- covering all of Spain as well each autonomous region (county council) also as its own legislation, in addition to this each local town hall has its own local legislation.
- Why harsh?: Faced with an infringement of urban law of which the foreign buyers have been victims, national, regional & local legislation is followed with conviction, treating the buyers/owners as the only person/persons culpable regarding the infringement: fines & demolitions, without consideration that the buyers purchased in good faith and that they have been defrauded by an unscrupulous builder.
- Spain has this problem because urbanistic and property crimes committed are difficult to prove and the fines/penalties against the offenders are low, this acts as an incentive for corrupt and unscrupulous constructors to continue with their illegal activities, defrauding innocent foreign residents with almost total impunity.
- Even thought this problem exists should one still take legal action (denounce) against urbanistic fraud?: YES ALWAYS
- They do not guarantee refund of deposits.
- They do not guarantee imdemnization for possible damage to the building.
- They do not build to the building regulations stated by law, concerning noise; humidity/damp; thermal insulation; accesses for handicapped & elderly people;
- They charge the buyer for builder’s electricity & water, this is prohibited by law.
- They do not provide a license for the work nor a license for first occupancy without these the buyer will not be able to contract electricity, water & gas supply.
- They use contracts that are previously written with abusive clauses against the buyers.
- They use solicitors that are on the payroll of other companies, they charge their fees through these firms, making proof of payment more difficult.
- They hand over the properties without them being finished, with damage and construction faults that affect habitability of the house or the whole urbanization.
- They make multiple extra charges: damage repair; finishing incomplete work; legal action, contracts, disputes & reclamations.
- They declare themselves bankrupt when they receive judicial reclamations so that the buyer has to then “quita” (which means, be paid less), and also has to “esperar” (which means, in most cases wait various years to recover part of the money).
B) WHAT TO DO IN THE FOLLOWING SITUATIONS ( real situations which our law firm are defending at the present time)?:
4º) Problems with the seller: If the farmer sells the land to a speculator, this being done under the cover of another company can then be sold by private contract to the unsuspecting foreigner, without anything being registered at the land registry and without the knowledge of the actual registered landowner, and in the process the value of the land that doubled or tripled in price from its true market value, and later the company that has carried out this “speculation” goes out of business.
II. If you purchase a house on plan that never gets built: The buyer will have to reclaim the refund of what has been paid, in the penal and civil courts. Important judicial costs involved.
III. If you purchase a property & before it is handed to you, the property Developer declare themselves bankrupt ( for example “Grupo San José”): The buyer will have to try to recuperate their money at the penal & civil courts, they will also have go to the Company Courts (for those that have gone bankrupt) Juzgados de lo Mercantil (los de la quiebra) as soon as possible, because the later you act, less money you will be able to recuperate & the longer it will take. Also important judicial costs.
IV. If you purchase an urban plot and when you try to build a house, the town hall because it is in “floodable area” even though it has more than 10.000 square metresSi usted compra un terreno urbano, y al intentar construir una casa, el Ayuntamiento se lo prohíbe porque está en “zona inundable”, aunque tenga más de 10.000 metros cuadrados: One thing that is not known is that in the Comunidad Valenciana, the land is exposed to periodical serious floods. There is a law that defines the level of flood danger in each area, which also specifies what this land may not be used for, to avoid deaths & damage. If you are in this situation you must take out a lawsuit against the Town Hall & against the seller.
V. If you purchase a property with a private contract, & without a public deed of sale escritura de venta, then one day you find out that the seller has again sold the property to a third person with whom they also failed to sign a deed of sale at the Notary escritura de venta:
Another thing you should know about Spain is that there are three different types of owners of properties: the owner by Escritura Pública (PUBLIC DEED OF SALE); the owner by contrato privado (Private Contract); & finally, the owner that does not have a contract or Escritura but for some reason is “owner” as he lives in the property.
The first situation the most preferable by far you are protected by the law. The second situation second preferable, but nothing goes against information registered at the land registry. The third & last situation you can with the passing of time (30 years) acquire the property, but later before buying the property you have to prove there is NO existence of a third owner.
C) CONCLUSION: Do not trust intermediaries or the solicitors recommended by the estate agent (most likely on salary from the promoters or estate agents) & always consult with independent solicitors & experts in this area, like RICOR ABOGADOS, from the first moment: when choosing your land or property to purchase, when choosing the promoter/estate agent or intermediary, and when choosing the contract and clauses within that contract therefore ensuring your rights. Remember at the first moment of the appearance of any problems or symptoms of problems, you must not wait; it must be dealt with immediately in order to resolve the problem, time is always against the trusting buyer.
© Mr. Oscar Ricor. Solicitor. RICOR ABOGADOS
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Top tips on avoiding legal complications By Oscar Ricor (Ricor Abogados). In all markets there are people who play by the rules and those who break them. The rapid explosion in the Spanish property market over the last decade and the arrival of many foreign purchasers both attracted a fair amount of sharks. Before starting, I do need to emphasise that Spain is mostly a well-regulated country and not the “wild west”. There are of course agencies, property developers and construction companies that operate legally and properly. Spain remains a top destination for people buying holiday homes or wanting to retire in the sun and there is no reason you can´t safely purchase property and have your rights protected. Over the years I have been in practice as a lawyer, I have had first-hand experience of most of the different scams and tricks that are used by the dishonest operators in the construction and property development businesses. Expatriates usually are at a disadvantage when it comes to knowing the language and/or much about Spanish property law. Additionally, many older people – especially the old and infirm – are more vulnerable as the may be coerced into accepting a situation. Common property purchase problems The following are examples of some of the areas where people have had problems and things to watch out for when purchasing a property in Spain: 1) Private sale agreements: this situation might be suggested as a way to avoid tax or simply the buyer might not realise that what they are executing may not be legally valid. A sale should be recorded as a public deed in the presence of a notary. The risk here is that the seller, sells the property again to another party. 2) Incorrect description of the property (fraud): this ranges from the misreporting of the number of square metres of the property itself to incorrect inventories of fixtures and fittings. 3) The introduction of a third-party into a transaction who acts as an intermediary between the owner of the property and the legally registered owner, who sells the property – usually under private agreement, with the issues raised above – and raises the sale price by 33-55%. 4) The sale of property built on agricultural or other land which has been constructed in violation of building regulations and/or in the absence of the required permits and/or on land which is then re-categorised as an urban area. In the first case, it is possible such a property can be ordered to be demolished and in the second, the “land grab” law can be applied to expropriate land for road/other use. 5) The sale of properties that does not have the certificate of occupancy or licence of first or second occupation, which might be due to the fact it has not been constructed with the necessary permissions and is not recognized by the local authorities. 6) The sale of off-plan properties (advance sales of a property in advance of its construction or completion)without there being refund insurance in place to protect deposits (illegal under Spanish law). 7) The sale of new properties which do not have three- or ten-year insurance in place to cover damages caused by hidden defects in the construction. 9) Sales in the presence of a notary through a “verbal representative” or “translator” provided and sent by the selling developer/builder to represent you as the buyer. As you might imagine this type of situation is open to abuse as this representative can act in the interests of the seller and not yours. Advice when buying property in Spain 1) Don´t fully trust any developer or estate agent. Part of the job is appearing trustworthy, being friendly and helping in every way they can as you consider buying a property from them. This co-operation is there to close a sale and ensure they get their commission; it often disappears completely when the deal is done. 2) Don´t be pressured into making a deposit on a property until a lawyer has been able to make a full evaluation of the legal status of it (enquiries with a Notary, Land Registry and the local town hall, etc). 3) Don´t sign any documents or purchase contracts before having them checked by an independent solicitor (that you have contacted yourself, not a referral from the seller). 90% of contracts of the contracts drawn up by developers that we have seen include unacceptable clauses, which range from unpleasant to expensive/abusive. Even if you have a good grasp of Spanish, some of these are not immediately obvious without good knowledge of Spanish law.
The best advice I can give is to make sure you fully understand everything you are being explained. You might feel uncomfortable or ignorant at times, but ask for clarification and get things in writing. Given the significant amount of your wealth you invest when you buy a property, make sure you protect that by always seeking third party independent advice from an expert. Professional help avoids complications and is relatively inexpensive. Sitting back in the sun in your new home in Spain without any legal worries is priceless… By Oscar Ricor – Ricor Abogados Tel: +34 687 888 873 Fax: +34 966 701 226 Pza. Cap de Pont Nº7. 1º-A. 03181 Torrevieja (Alicante), Spain. |
Charging for temporary (builder´s) electricity supplies which are only meant to be used during the construction period (illegal under Spanish law).