Property Purchase has gone wrong!

Hi.  Im new to the forum, but we have been trying to finalise on a resale property since last April.  We made the offer and paid the reservation deposit.   We fell the estate agent telling us "we are getting loads of enquiries" line and couldnt bear the thought of losing the property.  We paid up and then a few weeks later the reservation contract was done (it was checked by our lawyer, who made some minor changes).  The agent held the deposit, and although we asked him to forward to our lawyer, he failed to do this. 

So, we were told by the agent that the paperwork was in "tip top order" and "sqeaky clean" this turned out to be not the case, the pool wasnt listed at LR, the plans were incorrect, the size of the plot reduced over the course of the transaction by more than 5000 sqm!  To get this all sorted out meant that the 30 days to enter the PPC was long gone and so we just accepted that it was going to take longer.  When all the paperwork was returned to us we were really upset to find that we had been misled by both the seller and the agent as to the status of the driveway from the public road to the property.  We were told that this was "shared" but in fact it was not shared, there was no proprietary interest in the first 100 m from the public road by the property.  The owner readily admitted that they had used it on a daily basis and the owner of the land hadnt stopped them!!!  If the owner of the land which appeared to be all the land to the front of the property and in effect the bit that gave us access onto a public area took it into his mind to cause issues this would have meant we had no way of getting to the house. 

Our lawyer tried to find any kind of legal pathway to the property by visiting the town hall and checking all maps etc, but it turned out to be completed landlocked by land that was in the ownership of private individuals.  As such we asked for some kind of agreement to be drawn up, in the UK it is the perpetual easement, but I think it is called something else in Spain, and that was agreed.  Then the seller refused to execute it between themselves and the owner of the land, and we were pushed to have the third party as a party to our purchase!  In all honesty, we should have walked away some time ago, but we carried on and found the guide to purchasing property in spain written by The Spanish LR, the UK RICS, and AIPP - this broke down the process into easy to understand steps. 

The sellers then stated that they would not accept the contract, they wanted to have the 10% deposit paid into their private bank account, they wanted to a fixed completion date, and there were some other things that we had been disucssing that they then said they wouldnt agree on.  So back to the drawing board, except that the sellers refused to negotiate or to offer any alternative suggestions for the contract.  The situation was in stalemate; but we found that whilst this situation of stalemate existed they had commenced marketing the property with another agent.

OK.  If you have stuck with this sad story so far - well done.  But now we are fighting to get our Euro 3000 deposit back from the agent.  He contacted us last week and suggested that we split the money 50/50 with the seller.  But we feel that the reason that the sale did not progress or go through was down to the seller, and we dont consider that we should pay 1500 Euro to them. 

Has anybody any thoughts on this?  Any advice to give?  A shoulder to cry on??

Thanks

x

Hi.  

My first thoughts on this are from early on in the process when you mention your lawyer, and the small amendments they made to the contract.

This definitely implies they read and understood the contract they were given, because they advised you on it.   You should have been protected from that moment at least, and they should be responsible for not recognising the issues you have since brought up, and for giving you bad advice.

 The Spanish property market is very poorly regulated and scams that were around in the past, will be back!    Be careful out there.  

I would take the offer of the 50/50 split. Yes its a lot of money to lose, but in my opinion trying to get it back through the spanish legal system will cost you thousands more and probably headaches for the next couple of years. It also seems you are lucky that you didn't progress further, try to look on the bright side and put it down to experience.

I know that this is 20/20 hindsight but I always advise that all paynents are made to and via your lawyer

Question 1 is did the agent provude the lawyer or is this one that your found independantly

The process is normally that although you have to pay a reservation fee that this isn't passed onto the vendor till the sal;es contract is agreed and the legal paperwork checked and then it is often another say 10%, so question 2 is did you sign a reservation or sales contract, if yes to the reservation contract what were the terms. The 10% is normally paid directly to the vendor, ideally agian via your lawyer and the vendors and buyers are bound, but again only on signing of the sales contract

The sales contract should also have an agreed completion date

I cannot see why there is any obligation to split the initial deposit 50/50, perhaps the seller is a mate of the agent and is on a bung of the €1500, but is should be the lawyer who is sorting this out for you, especially if the lawyer still has the deposit, which it sounds like he does

Geta advice from the lawyer, unfortunately Jarvi might be correct

inspectahomespain I know that this is 20/20 hindsight but I always advise that all paynents are made to and via your lawyer

Good advice. But why are estate agents allowed to take deposits?. Is it legal?. Do they hold it in a separate segregated client bank account?. What if they go bankrupt the following day?. Do estate agents abide by any code of conduct?. Are they regulated by anyone?.

Only asking you because of your 30 years experience.

Pal let me EXPLAIN dealing with any one from SPAIN is like RUSSIAN ROULETTE only that there are 5 bullets instead of ONE it's that RISKY

TAKE the HIT walk away and use it as a VALUABLE LESSON KAPEESH 

Love Hugh xx

I don't have 30 years experience only being in Spain 13 years howvever I can only advise from the agents that I have worked with who DO NOT take any deposits from clients but advise them to pay the lawyer

Also not sure how it works but there are a number of the developers who have card machines in their offices, again I would recommend, pay the lawyer and check that the money is going into their client account, get them to send the lawyer the reservation contract fir checking, before, signing anything

inspectahomespain Sorry to have troubled you, just thought you would have the answers. ** EDITED - Against forum rules **

It is just a case of perhaps asking the individual agent but the best advice and safest route just make payments through the lawyers

** EDITED - inciting **

Elsie.   

Just open a shop and stick some properties in a window.   Tell anyone who comes in that you can't fail.  

Stick the card in the slot and take the money.   Then do what you want.  

Simples.   

Want your money back?  10 years and we will be long gone anyway.  

What a crappy system

Until such time as there are trusted regulated accreditation systems in place for agents and lawyers ( which ironically would be in all good professionals  best interests), plus effective Banking regulation, where adequate and swift disincentives are in place to deter abuse at point of abuse,  then the message presumably has to remain BUYER BEWARE IN SPAIN.

It never fails to surprise why good professionals don't strive for such regulatory mechanisms to "clean up" the real estate industry from within.....  The sad thing is, it does a disservice to those good honest professionals who are working hard to establish their reputations in what still appears as a "potentially corrupt unregulated industry".

All too many keep saying this...But it doesn't have to be like this!

eI know it may not seem like it but you are lucky to get out of this, even if you loose half your deposit.

There have been plenty of cases of people 'buying' and finding out later that the property has been built completely illegally. Some even having to watch as their 'home' representing their life savings is demolished in front of their eyes.

Things are getting better in Spain, but it is still a case of buyer beware and the absolute neccessity of finding a competant, independent abogado (lawyer).

Last year I gave a agent 3k deposit money on a property, then a few weeks later the selling bank also wanted a deposit  3k so that 6k in deposits, anyway I due to circumstances I pulled out of the sale, the bank gave me the 3k back near enough straight away, but the agent wasn't as keen,until my solicitor had a chat with agent, then I got it back apart from a so called ad min fee. Vultures 

Brian said

"My first thoughts on this are from early on in the process when you mention your lawyer.... You should have been protected from that moment at least, and they should be responsible for not recognising the issues you have since brought up, and for giving you bad advice."

In fairness to the lawyer, reading Lisa's post again it sounds like the lawyer only came into the picture after the initial reservation deposit had already been paid to the agent. If Lisa had not involved a lawyer subsequently, she may well have parted with the full 10% too, so in this case I don't think the lawyer is at fault. Whilst all the comments about never paying a deposit to an agent and only to your lawyer are good and sound advice, let's face it, it is common for agents to ask for a small reservation deposit, and newbies to the Spanish property market can be forgiven for thinking that this is normal (well, it is!) and that agents are probably regulated and honest. (Ha!)

Depending on the wording of the initial reservation contract, there may be very little chance of getting the €3,000 back without a fight. I suspect Lisa's lawyer has already had words with the agent, and the offer of 50% refund was probably offered in the hope it would be enough to get the lawyer to recommend Lisa takes the offer and leaves him alone. Unless the agent is a mate of the vendor, I very much doubt that the remaining 50% will go to the vendor anyway - more likely the agent intends to keep it himself for "costs incurred" or some such.

It may be I am still not grasping a market for such important a transaction doesn't start with a lawyer in the process. 

If an agent takes a deposit I see it as holding a future transaction, with all consumer rights in place.  In that case I don't see why a lawyer appointed can't start the procedure of sale when they are instructed.   It really is a curious system to be involved in, so my comments can't really contend with the silly structure in place maybe????

I think many agents take the deposit as there commission  I sold a property and the buyer put down 8k, and that's what he was charging me to sell, so he gets his commission early on in the process.  He not waiting round for the day of sale at the notery, Who know what these agents declare to the tax man. If anything

Commission before it's sold Paris?   Wow even more curious, scammers paradise. 

Considering the property market ‘’new and resale’’ in Spain is or has been a massive part of the economy why do the authorities ignore it’s tarnished reputation caused by builders/developers, banks, lawyers, estate agents. Why don’t they get a grip of it?.

Why not take action and make Spain one of the safest places to buy and invest in property.

1. They think it already is.
2. The authorities are corrupt.
3. They cannot be bothered.

Well, the first mistake is believeing anything an agent says.  And for those who think this only applies to Spain, think again.  It is a global rule.  They are after the fee, period. Assume that everyone is lying to you and verify everything, even in countries with strong legal remedies. 

The second mistake is attempting to buy a place that you can't walk away from.  If you show any signs of attachment to the property, you are vulnerable to being being taken advantage of. 

I hope this gets resolved for you.