Don't Criticise the Junta's Actions, Only the Delay in Implementing Them

Published on 06/04/2010 in Buying Process

On reading through Forums on many Expat websites the feeling gained is how many negative, depressingly paranoid, 'victim' comments there are to positive action by the Juntas at last. Many more Spanish nationals than Brits have lost out. Think it through.
 
Crisis in SpainMost councillors and mayors of towns are from the local community, voted there by their family, friends and neighbours. It's the natural way. When there is an uncertain town plan (PGOU) or one created many years ago by someone from another neighbourhood or family, it's not going to be treated with much respect.

Then one of the family is approached by a builder who is willing to give so much money for his land that the whole family will become independent, affording to send their children to college or university to better themselves instead of having to take a job as soon as they can leave school to give the family income.

One problem, the land on the old plan isn't zoned for development. So the whole family gets together with the councillors and mayor and they say we'll take the money now and deal with the problems if and when they happen in the future.
 
The developer team is keen to proceed as they are employees and know that they will only have work if they find developments. In the past, the promoter on the one hand had banks pushing money at them for development and on the other buyers greedy to invest in the finished product before it was built, as they saw opportunities and didn't look to closely at the consequences.
 
But somebody, somewhere should have said, STOP, this is illegal and maybe they did. Perhaps a lawyer or a councillor who could foresee that it could end in tears. But they were swept aside in the rush for profit. It appeared to be a winner for all, in the short-term at least.
 
Time went by and things changed. The Junta noticed that the development was happening, was out with their approved plan and put in action the slow legal progress to stop the development and penalise the local politicians for granting the permission. And the money for the development started to run out.

The banks were pulling back with construction funds when the developer eventually had to admit that he hadn't sold enough of the property to independent buyers to cover the construction costs. The options he had given to his friends, directors, employees and even the individual bankers themselves were never going to be taken up.

The greedy buyers were coming to their senses and realising that there wasn't a huge pool of other buyers out there desperate to buy from them at an inflated or indeed any price. And so the whole financial structure crashed, leaving the building skeleton unfinished and unloved.
 
Now the retribution begins. The speculator buyers haven't the money to complete their purchase or don't want to put good money after 'bad' and try by all means to pull out of the contract or just walk away from their deposit. The developer can't finish the development as he isn't getting the completion income he had depended upon.

He has already spent the 'profit' on good living and another development site that is now nearly worthless, but still has to repay the huge loans he received from the bank. He finds that he has no support and only demands from his previously friendly banker and eventually has to tell all his suppliers and employees he can't go on, he can't pay them anything and the company is 'bust'.

Eventually the bank takes back all the land and developments that were the security for the loans, which land they now 'find out' doesn't actually have any development permission and so they have nothing for all the money they have lent. They are in trouble, but if they can keep the original book values in their accounts for long enough, perhaps values will come back. But don't ask them for a mortgage or any loan of any kind because in reality they are as 'bust' as the developer before them.
 
And all the time the legal processes have been grinding on and now the final appeal decisions are coming out against the town hall. The councillors and mayor acted illegally by ignoring the PGOU and must be punished. They are fined and go to prison and are prevented from holding political posts for a few years. Their political party casts them out, ignoring the fact that they were the source of much of it's past income, declared and otherwise.
 
But the families of the village, the councillors and mayor are now wealthier, healthier and better housed and educated if they've been wise. Or owners of depreciating cars, boats and sclerosis of the liver and gout from all the rich living if they've been imprudent, with families unused to earning a living as the 'land money' has meant that they haven't had to. They'll only get up to no good as desperation and the desire to keep up their lifestyle sets in.
 
And the future. Well it can go two ways. We've seen all of this before in the late 1980's and early 90's. "Never again" it was said, but another generation came along and the opportunities were just too good to miss and anyway, the culture is to live for today and let tomorrow take care of itself.

OR

The laws that are already in place can be given teeth and enforced quickly. The lawyers and other professionals will develop a 'professional conscience', even if it's only because now 'big brother' is watching and will catch them before they can hide the gains. And the money laundering laws are sufficiently swift and wide to prevent most professionals advising or even getting involved in the fringes of clients doubtful schemes.
 
So don't criticise 'Stop Notices' or the like. They could have prevented the worst of it happening in the first place

Written by: Campbell D Ferguson

About the author:

Campbell D Ferguson, FRICS. Chartered Surveyor in Spain.  Survey Spain are Independent, Experienced, Professional Chartered Surveyors based in Marbella and Estepona on the Costa del Sol, Spain, who speak both English and Spanish. Through the Survey Spain Network they can arrange for valuations, building surveys and structural surveys to be carried out on any of the Costas of Spain, it's Islands and the Portuguese Algarve.




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Comments:

www.billinspain.com said:
19 October 2010 @ 21:21

your artical is very good and covers one aspect of these problems,our estate agents,billinspain worked within the law, told investers not to buy on farm land, most chose to go to other agents for fincas. The problem is not about quick buck merchants in town halls but a large long grown problem of outright criminals that have had controll of Spain locally that have worked together for 40 years or more,we have left Spain to fight our case from the UK,through the EU, our son has now had an embargo for 8000 euros put on him by our local property office in falset Tarragona,this group of officials just do not get it. the British will attack back in the end although we talk about things for far to long.This group canot reach or stop our complaint so like spoilt children begin to attack our son in our absence,our web site has many hits and could easily convert to negative action about Spanish problems, but it will be better for all for Spain to arrest these groups and face the facts, Spain may even recover by doing this.WAR with the UK may be the other option.


dunn said:
11 July 2010 @ 14:01

THE ANDALUCIAN ILLEGAL HOUSING SOLUTION.
The ministers at the Junta de Andalucia have worked hard over the last few years to resolve the problem of 250,000 illegal homes. We have had many reassuring words, "stay calm, don´t be concerned, it may not happen,we are doing everything possible, and we must remember, that in Spain, the law is the law". How many elderly expatriates living in Spain were reassured by those words? These "Despots", who succeeded in terrorising thousands of the most vulnerable European settlers have now been sacked, many of us breathed a sigh of relief, wonderful news, at long last the authorities have come to their senses. Unbelievable, but true we have a new Minister for housing, who is also working hard to resolve the illegal housing problems, with her slogan, "we have rules and they must be obeyed" and another reassuring message to stay calm, we should not be worried as the illegal homes would be dealt with on a case by case bases and not be demolished all at once.
So after all the hard work put in by these "buffoons" the figures for illegal homes has increased to 300,000.
In the Almanzora valley a figure of 1200 illegal homes was bandied about some four years ago, many voiced their opinions that these were largely exaggerated, again after much hard work and many promises over the last few years, these figures increased to an approximate 5000 to 6000.
With these sort of numbers the Junta has now taken things serious, working even faster and harder, an Inspection team to collect an inventory of housing, of course they have learnt some lessons and know what they are doing.
They nominate a reputable local company, which markets illegal houses built and sold by their boss who is subject to criminal proceedings.
Now with an illegal homes builder and developer onboard, we would, if nothing else expect the numbers to be reduced.
Having calmed our fears with explanations of work going on as fast as possible for a solution to these problems, we now find 11000 illegal homes in the Almanzora valley and an escalation of court hearings with charges for more and more demolitions.
The Junta de Andalucia has already threatened the victims with the bill for legalising their homes. It does not take a lot of savvy who benefits by these increased number of illegal properties.
"PLEASE DO NOT BE CONCERNED, IT MAY NEVER HAPPEN", OR "TRUST US, WE ARE DOING EVERYTHING WE CAN".



www.billinspain.com said:
12 April 2010 @ 16:58

07.04.2010 David Ashby - answer - see BHtheTRUTH on YouTube, this is local families, including the court simply getting together and taking what they like, the Falset court in tarragona took 78.000 euros off us without even doing any paperwork, this in effect bankrupt us while they shared our properties out between themselves and their friends, all because we employed a local boy and caught him stealing big time, put together a few English drunks and hey presto! We were not greedy, did not con anyone on permissions or commissions and are gutted that the courts have taken these actions against us, we are now promoting the problem and can even boast Barak Obama as a friend on youTube, check it out, its not good for Spain


Meijoo said:
09 April 2010 @ 22:06

Campbell D Ferguson, spanish or foreigners makes no difference. The corrupt individuals are abusing the vulnerable individuals. The Junta should have acted a long time ago starting with their employees. Instead they ignored the corruption as long as it made money for the greedy liars. I blame the Junta for not doing their job in the first place. They have to take the responsibility instead of passing it onto the last in line, the owners. Shame on the Junta. It is about time they acted with dignity, if they know what it means of course.


www.billinspain.com said:
09 April 2010 @ 11:16

See BHtheTRUTH, ON YOUTUBE,this problem is deep into the courts themselves this is destroying any chance for Spain to recover, we have promoted Spain for a decade and now cannot feel confident in giving advise to investers to spend in Spain,we have some big investers.The Spanish people are the ones suffering for such a small amount of criminals,the whole system is mad.


Anne said:
08 April 2010 @ 11:01

The bottom line for purchasers was that there was supposed to have been consumer protection set in place in the form of Bank Guarantees, presumably approved and initiated by the Spanish government in the hope of encouraging safe offplan investment in Spain and approved by the Banks. Neither the government nor Banks however now appear to be acknowledging their responsibility to ensure that these guarantees hold fast in the light (or darkness!) of economic downturn when developer breach of contract has legitimately occurred , nor that due diligence by the Banks was ever given to their initial provision.


Surveyor said:
07 April 2010 @ 21:41

The buyers are at the start of it! If nobody was buying the apartments, none of the rest would work. Look around you now!. It all comes down to the lawyers. If they represented their clients properly and said, "Don't buy as it hasn't permissions", none of it would have happened. I'm stating what are logical events to have happened. There has been greed in all directions.
Tom, if you know it all, you write an article.



Surveyor said:
07 April 2010 @ 20:40

The buyers are at the start of it! If nobody was buying the apartments, none of the rest would work. Look around you now!. It all comes down to the lawyers. If they represented their clients properly and said, "Don't buy as it hasn't permissions", none of it would have happened. I'm stating what are logical events to have happened. There has been greed in all directions.
Tom, if you know it all, you write an article.



Tom said:
07 April 2010 @ 18:49

I nearly fell of my chair reading this ridiculous article. "The greedy buyers" the author writes. What planet is he on?! The whole problem here is not the buyers, it is the Spanish system who sells properties that are laden with problems. The Spanish system should stop illegal builds and enforce it properly to make sure the building is not completed and then sold. The town halls are all corrupt, so power needs to be taken away from them asap. The Spanish lawyers, town halls, banks and notaries all play a part in this. None of them ever see the problems, indeed they turn a blind eye, because they want their money.

Justin, please get someone to write sensible articles for your website.



dr david ashby said:
07 April 2010 @ 03:23

I have only one comment on this why did it take so long for the junta to act, one wonders if the corruption go all the way up


Meijoo said:
06 April 2010 @ 19:32

What the author has outlined in his article is that of human greed and the pursuit of power. Greed on the part of everyone who participated in this process.

Power corrupts and absolute power corrupts absolutely. The problem is once the lies and deception begins (let's face it there is always a reason for it) it is like a cancer that eventually eats at the very fabric of that society.

Trying to arrest the cancer is time consuming becasue there is no one answer. Education alone will not lead to a more ethical society. It has to come from the heart and soul of the people that make up that society.

Money is not the answer to a better society either. Often it generates more greed. So think about it, what kind of society do we want for the future? More deception, lies, money, education, property, pollution, cruelty, abuse, power?

"A society is judged by the way they treat their animals". If we cannot treat a simple thing like an animal with respect than, what chance do we have in treating our fellow humans with respect?

We are not talking about a third world country here, we are talking about Spain, a member of the EU.



Karl Dunn said:
06 April 2010 @ 15:56

What a load of "hog wash"
The article by Campbell D Ferguson, get real, maybe you should check where these buffoons at the Junta have made their money before ruining the lives and dreams of so many elderly BRITISH expatriates.
The Junta and local authorities are still collaborating with the racketeers. They feed on the credibility given by people attempting to resurrect the Spanish property market.
I for one support the victims, not the crooked lawyers, estate agents, developers or politicians.
Give the Junta a fair trial, then throw the keys away.



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