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A new window of opportunity for Spanish property buyers

A landmark legal ruling offers long-awaited closure to around 130,000 UK buyers who lost deposits against off-plan properties in Spain during the financial crisis. 

Spanish bricks and mortar offered investors a low risk high return gateway to sunnier shores for many years. Even now around 17% of properties in Spain are owned by Brits, with many still taking advantage of what’s often hailed as one of the most undervalued property markets.

Last year the International Monetary Fund praised the country for it’s remarkable return to stability and foreign cash made a gradual reappearance. Since then the sun has continued to shine on the once turbulent property market, with the outlook for 2017 looking bright.

But the hangover from the 2008 property crash is still felt by many. Before the market crumbled, buyers ploughed cash into Spanish real estate, with many opting for off-plan investments, parting ways with significant deposits and stage payments in the process.

During the boom period, around 800,000 holiday homes were built in Spain each year. But when the bottom fell out of the market, leaving builders and developers bankrupt and off-plan homes nowhere to be seen, buyers had little hope of recovering their money. Official figures put unsold and incomplete homes in the region of 617,000, although unofficial figures double this. While many fought lengthy legal battles to reclaim their cash, few succeeded.

Fresh hope for investors who lost deposits

In December 2015, a new ruling offered fresh hope for out-of-pocket buyers. The Spanish Supreme Court in Madrid ruled that banks should be held jointly responsible, alongside property developers, for the lost cash. Even those whose money was never deposited in an account with a bank guarantee, or those that fought to reclaim their money back in the past, were deemed eligible.

Figures from Spanish Legal Reclaims and the Centre for Business and Economic Research put the estimated bill for lost deposits at £5.3 billion and that’s without the lost interest that banks must also shell out for. With around 130,000 British buyers eligible to reclaim under the new ruling, buyers are already seeing their funds, plus healthy interest, being returned. The research also states that 86% of the British population is unaware of the Supreme Court ruling.

Time is ticking

Technically speaking those looking to recover their deposits have a 15-year window to reclaim which sounds generous on the face of it, but with many buyers having lost money almost a decade ago, and some cases taking a while to complete, experts are urging those affected to act sooner rather than later.

The claims process itself should be simple as most firms will do the legwork and the ruling itself is clear and difficult to contradict. The biggest risk to clients is finding the right legal expert, as buyers only have one opportunity to claim.

The £5.3 billion claims pot has inevitably prompted less specialised law firms to come forward in pursuit of new clients, although many lack the resource and expertise needed to take on heavy-weight financial institutions. And while many promise a ‘no-win, no-fee’ payment structure which can leave buyers out of pocket if the decision is appealed, fee structures used by firms like Spanish Legal Reclaims, which only takes a fee upon complete success, allow buyers to avoid parting ways with any cash at any time, until their claim is successful.

Moving forward

Support from the Spanish legal system, like this new ruling, breeds confidence in the market amongst both old and new investors. The financial equivalent of a bank-funded A&E that buyers will hopefully never need but find invaluable if they do.

The team at Spanish Legal Reclaims is no stranger to this concept as they’ve been dealing with similar cases for over 10 years and the advice to clients has remained the same throughout – ‘just pick up the phone’. The first step for a client that’s lost money is finding out if they are eligible and how much they are likely to recover and from there, the claim can be filed, fought and hopefully won.

For many buyers, the decade-long financial hangover they’ve suffered could soon be over. Dreams of enjoying sangria on sunnier shores may not have materialised first time but for those with an appetite, recovering their deposits may well lay the foundations for a new investment opportunity.

If you have clients affected by this issue or would like more information, please get in touch:

Daniel Butcher, Spanish Legal Reclaims
t. +44 (0)7809 896210
e. dbutcher@spanishlegalreclaims.com w. www.spanishlegalreclaims.com

 

[Sponsored article by Spanish Legal Reclaims]

 

About Spanish Legal Reclaims

Spanish Legal Reclaims is one of Spain’s most experienced legal networks, specialising in the recovery of off-plan deposits for Spanish properties. Operating since 2007, its experts have more than 10 years’ experience resolving legal issues affecting foreign nationals and expatriates.

Unlike many legal firms, Spanish Legal Reclaims is completely independent from banks and property developers. The service it offers is transparent and impartial, with clients only paying a fee upon the successful completion of a claim.

Luis Cuervo, CEO, Spanish Legal Reclaim. 

 

Author: LifeTalk Admin (Bella)
Posted: Tuesday, February 28, 2017 | 10:38:02 AM


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