Spanish Property Investment Advice 

Brought to you each week by our property expert, Iain Maitland.

Posted on 24 March 2006

The Safety of the Bank Guarantee

El Mundo is claiming that Spanish buyers of coastal properties are now looking towards the new coastlines of Cantabria, Huelva, Almeria and Murcia rather than the old favourites of the Costa del Sol and Costa Blanca. UK investors who want to be at the front rather than the back of a property-profiting trend, please take note!

At www.internationalpropertyalerts.co.uk, we have long been providing a free daily email service for subscribers. We are now rolling out the service with the launch of a free monthly newsletter, International Property Alerts, from 1 April. Those who sign up to the site, all free of charge of course, will receive either a PDF or word.doc copy of the newsletter during the first week of April. We have lots on Spain!

We are also now offering a one on one question and answer service. The first question duly arrived from K.P.   "Many thanks for the emails they are invaluable, wish I had heard of you 5 years ago! Do you have info on Spanish builders and off plan delays? My situation is that I bought off plan in Feb 2005 for completion in Feb 2006 that is now going to be June 2007. I have got a bank guarantee. Many thanks K.P".

Our initial response, which should be of universal interest, was "The good news is the bank guarantee. There are fairly draconian measures in place in Spain now to deter builders from delivering late or, worse still, going under but the devil is of course in the detail. Take a look at your contract and it will tell you what delays are allowed ( three months overtime is considered not late ) and indeed what penalties are in place if those limits are exceeded. Do make sure though that your English contract says the same as your Spanish contract, that is not always the case. It is perfectly possible that one version is a little more lax than the other. The only way you can be sure, or at least have some comeback, that the two are the same is if they are both stamped by a state registered translator. Once you've established what delays are allowable then you can look at where to go next. What K does not say is whether she bought direct or through an agent and whether the conveyancing solicitor was appointed or chosen, English or Spanish. Clearly if I had bought through a reputable agent I would expect them to help me resolve the problem, beware though, the agent works for the builder, not for the buyer."

Going back to the trend for Spanish buyers looking at other property areas, much of this shift may be to do with recent government efforts to curb coastal development. The Minister for the environment, Cristina Narbona, has recently confirmed that her department has reserved 50 fincas to preserve them from building speculators. And the Official School of Architects in Malaga confirm that 18.5 per cent fewer residential properties were built in Malaga and along the Costa del Sol during 2005 compared to 2004. However, inland regions of the province are showing a significant increase in construction projects. Figures are to follow.

Warmest Wishes

Iain Maitland

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