Bank repossessions

A proper check is always necessary.

For instance: it is possible that the Bank is repossessing a house that does not have a First Occupation License. 

Thank you for your response, I find it hard to believe that a bank can sell a property that's not got all the legal paper work in place. Stevee

They probably would market any house for sale without the proper legal paperwork in place hoping it would sell,  then get all the necessary legal papers,  to save money in case it dont sell.

Also remember it's a bank and bank's think they can do as they want to, and who started a lot of the problems  with house's in the first place?

If they sell a property which does not have first occupancy cert then it’s up to the new owner to get it (if they want to occupy it) just as it would have been if the first owner, who failed to pay mortgage, had wanted to live in it on completion.

Of course they would not offer it for sale if it were not a legally built propèrty.

Maria,

Please can you advise...are Banks attempting to sell repossesed properties without FOL's in place?

Are there up to date property registers in place to cross reference and prohibit this eventuality? (Likewise does an up to date register exist for legal Bank Guarantees for offplan property?).

Is the problem here connected to a failure in local government or regional government administrations to provide the neccesary information for essential cross reference checks to be performed, as part of the Bank's due diligence from the outset of sale? 

Why should the onus be on the unsuspecting consumer to do these checks when in reality the onus should be on the Banks to ensure the "legality" of the property PRIOR TO SALE.

Propsective purchasers need to be aware also of hidden contract clauses that work to the detriment of the purchaser (as you have advised in a previous blog) and also do thorough checks on outstanding community debts as some developers/Banks have been failing to pay community fees leaving existing owners on developments having to meet increasing community fees in the interim.

Reading other threads there are also cases where existing owners are increasingly concerned by developers who have not been acting in the best interests of the community, and the owners appear to have few rights so long as the developer has majority vote.

These are all aspects that need thorough investigation by any potential buyer.

Many of these aspects appear to place the consumer at continuing risk, so why are these risks not miinimised by a standardised legal procedure for ALL sales so that no sale can be legally concluded without the necessary paperwork in place which includes FLO licence, no "small print" clauses or changes to contracts without express consent, and a formalised list of all outstanding debts?

I suspect that deficiencies in the land registry are also placing consumers at risk, especially where demarcation zones relating to coastal legislation is concerned.

Until such time as the Spanish authorities adequately respond to these failures in property administration and the legal fraternity standardise their legal procedures to ensure consumer protection, then the legal uncertainty over property rights will continue in Spain. Surely this should be a priority for the authorities to swiftly remedy as legal certainty is a basic requirement for any sustainable housing market.

Are the "good" legal fraternity calling for reform of this nature from the authorities? Are the Bar Associations (or whoever) involved in the reform process? I suspect many purchasers will want to know what is actually being done by the authorities to minimise these risks?

Fantastic post Ads.

It really is a minefield. You would have to really trust your solicitor to purchase some of these repossessions. The banks are pretty desperate to get rid of them and will try every trick in the book to mislead you.

Talking of a minefield....... everyone should take a look at Maria's blog http://www.eyeonspain.com/blogs/costaluz/11730/Legal-tip-1064-More-on-Illegal-mortgages.aspx

and read and understand Keith's recent observations relating to the behaviour of the Banks  (you need to scroll down the page to read the comments).

It's unbelievable and exposes yet another instance of why everyone (potential purchasers and claimants alike) should be pushing for reform of a system that is currently placing consumers at great risk.

Everyone who wants to improve the system in Spain should be documenting their concerns and quote these instances to their MEP's (via www.writetothem.com) and demand that the EU working party currently reviewing property rights in Spain should broaden the scope of their review (relating to Costa Ley laws)  and review the whole picture of property rights in Spain, including Bank abuse. They need to be constantly forewarned of what is happening in Spain.

It's essential that these grave matters are fully reviewed and proactive measures taken to prevent continuing violations of consumer rights in Spain, and the only way to do this is for everyone to contact their MEP every time they hear of yet another major instance......  

Bank repossession purchases are often not what they appear to be.  Recently a friend spotted a country house for sale on a bank website that required ‘finishing off’. Investigation revealed that the land it was built on was owned by the vendor’s family and an argument had caused a family rift. In order to access the house the new buyer was obliged to make a financial deal with the family to cross their land so the property would cost considerably more than expected as all the legal costs would be borne by the buyer as well as the ransom money demanded by the family on top of the buying price.

Another important point when considering a ‘snatch-back’ is the reception you will get from locals! Spanish families and extended families are very close and very often live in the same villages or developments so if a stranger comes along and ‘steals’ a  property that their relative had been paying for and, as a result of foreclosure have lost everything then a happy future at that address may not be guaranteed.

Be very careful. There is a terrace of properties near me that the bank has on sale, claiming them to be a new build, complete and in perfect condition. In fact they are not anywhere near complete on the inside, only the pilot unit is. But the bank is trying to sell this pilot house to prosepctive buyers without telling them the rest of the terrace is virtually unsellable and they won't have any neighbours for a very long time. The entire terrace has been empty for about four years and some of the houses have developed cracks in the walls which have been covered on the cheap with putty and paint. There are also some nasty cracks in the retaining wall. So be very careful what you buy. Don't trust the bank any more than you would trust some other seller. Don't trust paperwork (thebank can fudge that) but have an independent surveyor take a look.

Another important point when considering a ‘snatch-back’ is the reception you will get from locals! Spanish families and extended families are very close and very often live in the same villages or developments so if a stranger comes along and ‘steals’ a  property that their relative had been paying for and, as a result of foreclosure have lost everything then a happy future at that address may not be guaranteed.

It can go the other way though. A friend of mine bought a reposssed property and it turned out the previous owner wasn't a local and that he was generally disliked by all neighbours. His financial decline hadn't been sudden or unexpected but had been a long and protracted suffering during whilch time he had done zero maintenance, making his house the sore thumb of the neighbourhood, he had collected all sorts of junk and scrap metal in the garden and to make things worse had developed an attitude about it and behaved very antisocially and used threatening language towards neighbours. They were thus very welcoming when word got around that a new family was moving in who were going to be a bit more normal.

In these close-knit communities where extended families own the entire village, people are normally also prepared to keep things that way, and this may mean that stronger members will bail out weaker ones financially.