Call for Regulation of Overseas Property Agents

Published on 15/11/2006 in Investing in Spanish Property

Many Eye-on-Spain members have puchased 'off-plan' property from agents or developers in the boom period 4-5 years ago. With these purchases were no doubt attached false promises of the guarantee of selling on before completion, guaraneed rent, exortionate capital growth figures etc etc in an effort to 'seal the deal.' So what happens now - your completion time is due, you have completion costs to pay, mortgages to arrange, snagging to undertake and the possibility that your orginal agent does not want to know?

The most hard hitting fact is that agents on the Costa Del Sol continue to falsify the potential of the market. Formal regulation of estate agents could not come at a better time. However, are you aware that even in the UK, estate agents are not legally bound by a regulatory body? There are very reputable voluntary organisations such as the NAEA and the Estate Agents Ombudsman which do a great job in promoting ethical practices for estate agents and to shed the tarnished negative images that seem to go hand in hand with declaring that one might work in such profession.

The UK public has been furnished with all the tools necessary to sound out 'rogue agents' both in the UK and in Spain. The BBC brought home some shocking truths to the viewers through their 'Whistleblower' television programme unveiling that even on home turf, agents can be guilty of unethical conduct.

So what action is being taken? Which? Consumer magazine has been heavily involved in pressuring the UK Parliament to make time to pass the The Estate Agents Independent Redress Scheme Bill, and as such it is believed that this will be addressed by the Queen in November of this year. This of course will only apply to UK agents.

We are a small innovative real estate company, Merck Estates (Australian owned) and we are currently spearheading a clean up campaign within its sector and calling on the Government to not only devote Parliamentary time to the regulation of estate agents within the UK, but to extend such regulation to overseas agents providing services to UK customers.

Founder of our company, Julian Merck has said: "We are wholly supportive of Which? Consumer magazines call for Lord Dubs Private Members Bill ­ The Estate Agents (Independent Redress Scheme) Bill to become law. At present, the estate agents sector in the UK is unregulated and clients who are making one of the most important and stressful purchases of their lives have little or no protection.

"The same is true in Spain, where professional accreditation is wholly voluntary. We want to see Lord Dubs Bill not only passed by Parliament, but also extended in its scope to cover overseas agents. Only then can British consumers, who are carrying out transactions in the property market, be fully protected.

"Estate agents in Marbella are being unfairly adjudged by the consumer, in the wake of the Marbella Town Hall scandal, but there's no smoke without fire and many agents need to put their house in order before they can feel aggrieved by the consumer backlash."

News of the Marbella and Manilva arrests hit the UK consumers very quickly and has obviously added further dark clouds in our area, now, more than ever, people will be cautious about buying property on the Costa Del Sol. Such public reaction is hardly suprising, fellow agents only have themselves to blame if they are viewed in a dim light, given the antics that they employ in relation to property sales.

Standards must be raised that must apply in the world of real estate, both at home and in those countries where British consumers can have their rights trampled upon by cowboy operators.

Degree level entry to the profession, trainee schemes for graduates, continuous professional development and a regulatory complaints procedure for buyers and sellers alike should all be mandatory procedures for practicing in the real estate industry. Agents may be based in Marbella, but 90% of clients are typically from the UK or Ireland. As EU citizens, these consumers should receive the same level of support and service as if they were purchasing a property in their primary area of residence.

Our stand on the need to clean up the Costa del Sol real estate scene comes from our founder's experience gained with one of the largest estate agents in the area and his distaste for the lack of service that clients received there. This led him to found Merck Estates, with the offer of a very different approach to real estate, based upon cherry-picking the property portfolio and ensuring that owners are matched with the properties that they need, rather than the ones that need to be sold. Renouned for having his own standards in terms of location, specification and price per square meter for listing property. If a property does not match up to the criteria, it will not be included in the Merck Estates portfolio. For this reason, the 250 properties in our select portfolio are truly la crème de la crème.

We frequently finds ourselves having to rescue British and Irish property owners who have been sold property off plan and then left to fend for themselves. These clients had been advised by their original agent that their property would be sold before completion, but received no after-care support once they had bought their property. We have taken on these owners, assisting them with the completion process by undertaking their snagging, getting the right finance in place and structuring a realistic rental scheme for them, so that they can earn income by letting out their property.

We also take a dim view of the subsidising of "viewing visits" and take no part in this sort of exercise which we believe typically sees a prospective owner being bombarded with property details and coerced into buying the wrong property for their needs, very often "off plan". We will advise customers where to stay, arrange travel for them and generally assist as much as possible, but the client pays their own way and is under no obligation to view, buy or sign up for anything.

Similarly, we take a hard line with regards to not misleading owners about the yield attainable from their property. We advise clients that a net yield per annum will be 8-12% and not the 30%+ that other agents tout around.

As Julian Merck concludes: "We need to clean up the Marbella property scene and ensure British owners only deal with honest and ethical agents. The Costa del Sol offers the most fabulous infrastructure for a property owner and we are calling on the Government to ensure that it is does not forget its duties to protect the consumer rights of those Brits who wish to take advantage of this when pursuing their dream, or life-changing experience."

Written by: Victoria Foxton

About the author:Merck Estate

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misty1 said:
19 March 2007 @ 23:18

I have read your piece and would like to say that I have bought from RESTASSUREDPROPERTIES of whom is a member of FOPDAC which their members must adhere to the fopdac cod of practise

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