Legal or not?

Hi

I placed a deposit down on an apartment in January 2008, in a small village in Axarquia.  The Completion date never arrived due to the local mayor being arrested and the granting of licences frozen......

After a few months of waiting, during which time the trial and release of the mayor and 12 others involved in the corrupt events relating to property development was taking place I was informed of the availability of another apartment in the same small development but in phase 1 (licences in place granted by the corrupt mayor) AND a 2 bedroomed house, available at a reduced price.  So....tempted by the lovely 2 bedded house in phase 1, I arranged with my lawyer to change the contract (September of that year) from the apartment to the house.  The bank honoured the loan, but wanted the townhall to validate the legality of the licences.  Now 12 months later, i have managed to obtain a letter from the townhall stating that there is no known reason for this house not to be legal and stating that the houses are in fact legal.   However, I have been informed that the apartment on which I placed my deposit originally has been built on greenbelt land (rústica) and that the developer should have not built on a proportion of the land he had originally bought. I suppose he got greedy and built as much as he could. 

The development shares all the amenities - swimming pool, parking and the small piece of surrounding shrubs etc. it has, however there are no licences in place for the apartments due to the irregularities. 

My lawyer and the developer say I have no standing and that the house is legal.  My lawyer says I should complete otherwise the developer will force me to.........

I am really confused about my position and have the following questions

1. Part of the development appears illegal - this poses risks to the whole development. Why would I complete on a development that is partially illegal/irregular without having all the key facts?

2. I appear to have been sold originally, an illegal property - do I have any standing here?

3. Apparently 95% of properties in this village are illegal!

Any advice much appreciated !!

Thanks

Is your Lawyer YOUR Lawyer ? - IE without any known associations with the developer in question ? - Even if this is the case it would certainly be worthwhile speaking with another, completely independant Lawyer for a second opinion. Try and chose one who is experienced with property issues and legalities of this magnitude. Maria deCastro would most likely be the best place to start.

I do not believe that my lawyer IS my lawyer, although I have asked that question in the past......  

I was foolish enough to use the lawyers of the agent (Andalucian Dream Homes) - now disappeared I believe!!!!

Thank you!! :-)

What's the name of the law firm?

If you have any doubts whatsoever then you should seriously consider changing lawyers and having your newly appointed lawyer review contract and conduct new searches etc

It sounds like this development will not be without it's problems if you are sharing facilities and no one completes on the apartments. This could well impact on viability of community and/or lead to increased community fees on the houses.

There are many issues to be considered whoch could well mean you will not get what you were promised etc in terms of facilities/gardens/landscaping etc - that might give you sufficient grounds to claim breach of contract.

But you may well end up back in the same situation as many here and that is do you opt to make the best of a bad deal or join the litigation queue. But whatever you decide make sure you know what it is you are getting into. many communities are struggling because developer cannot sell units and will not pay community fees on unsold units - BIG headache!

I hope you did not pay all legal fees up front?

Hi !  Thanks for your response!!

yes, much to think about. My lawyer (Lawyers of Spain - now ceased practicing and is now Lawbird - 2 firms joined up)  - has advised me that whilst there are problems with phase 2, legally this has no bearing on phase 1 - which is legal.

She says that whilst some off plan properties along the costas have had this same problem, the "phase 2" properties have been demolished!  But she says that people are living in the apartments - just a few...This means that they were advised to exchange (without a mortgage I imagine) on the basis of that 3 month silence rule. Most legal experts will tell you not to complete on that basis and that the First Licence of Occupation SHOULD always be obtained.....

Thanks again!

The law firm you mention had a very cosy relationship with ADH which does beg the question as to whether their "new firm" is acting in your best interest.

But you need to look at big picture and see if what you are buying into resembles what you thought you were getting in terms of facilities, overall finish etc. ie landscaping etc I would be very worried about anything half completed or promises that the developer will put that right etc - will finish in due course etc. THEY RARELY DO!!!! So if the car park has no gates now it never will unless the resients pay!

The developer will try to get what he can from a few completers and then walk away and leave the bank to sort the rest out.

You need to look very closely at the community which may not yet be established and find out how that can survive without the additional phase. Without the additional phase community fees could well double? you said it was intended you would share facilities?

The other problem is the viability of the community and becuase you might find the developer will not pay community fees on unsold units and then you have big headaches trying to decide how to run the community.

I would also encourage you to confirm the pool is licensed. I have come across developments where thre is no licence for the pool and lawyers rarely check for this.

There is always a risk when being among the first to complete and move in as to whether others will follow and you definitely do not want to end up with a legal house on some half finished development becuase you will never be able to sell in the future.

Also make sure you check that the development is properly connected for water & electicity and that you have up to date bolitins for both for your property. I have seen many problems here in the past and the last thing you want once you complete is to have to pay out more money to upgrade installations to current standard to get your property connected. No builders supplies etc. etc or stories of it will all be done in due course. Otherwise any problems with the infrastucture will have to be paid for by community after developer has disappeared. ....

You should also undertake a full snagging survey before completion and there are English surveyors working in Spain.

Also make sure all the money you paid to date is reflected on escritura etc

So proceed with caution and if you do not engage another lawyer then make sure you ask a 1000 questions to your lawyer and insist upon written responses and if you do complete make sure you know exactly what you are getting into .....

Well, thank you so much for your response - very much appreciated!!!

My lawyer has today informed me that I must make a decision very very quickly otherwise the developer will do so himself as I am in breach of contract.   He is apparently legally within his rights to cancel and sell on.    She explains that the situation with the phase 2 development (the irregular development of about 18 apartments) is a completely separate issue from a legal perspective.

Yes, you are absolutely right, they were never working for me in practice....of course when I asked the question almost 2 years ago, my lawyer asked me to look at my contract, stating details of the two parties' lawyers (Mine and the developers).... The developers Torrebiznaga S.L has quite a presence in east Malaga and is part of Unión Toboso....Developers/owning estate agencies/hotels/bars in Nerja etc..From what I have seen on the internet they have quite a community presence...

Anyway, yes thanks again!!    I appreciate your notes on the completion and snagging list - i do not think I'll be progressing to this stage again!  i had completed one alreaady soon before the mayor was arrested - a year and a half ago!

Your advice isreally much appreciated!!

Have you written a book ?

Stephie

I don't like the sound of being pushed to complete quickly. I think a consultation with an independent lawyer would be well advised.

Do you know if the community has already been established?

Also is the development connected up to the main supplies such that you can contract directly for water & electricity?

And don't forget to ask about the pool licence.

Hi ya!!

Gracias!!

Yes, I am in touch with Maria...............and yes, I will ask about pool licence

Stephie

Excellent - let us know how you get on and if everything is as legal as it should be etc.