People walk over Westminster Bridge wrapped in Union flags, towards the Queen Elizabeth Tower (Big Ben) and The Houses of Parliament in central London on June 26, 2016. Britain's opposition Labour party plunged into turmoil Sunday and the prospect of Scottish independence drew closer, ahead of a showdown with EU leaders over the country's seismic vote to leave the bloc. Two days after Prime Minister David Cameron resigned over his failure to keep Britain in the European Union, Labour leader Jeremy Corbyn faced a revolt by his lawmakers who called for him, too, to quit. / AFP / Odd ANDERSEN (Photo credit should read ODD ANDERSEN/AFP/Getty Images)

BREXIT AND SPAIN: TWO MONTHS LATER

WHAT WOULD AN EVENTUAL BREXIT MEAN FOR THOSE BRITISH THAT WANT TO BUY PROPERTY IN SPAIN?

How would it affect British people who own properties in Spain? And those who are in the process of buying them?

It is too early to know what is going to happen but the more immediate effect is the depreciation of the sterling pound. If you already own property in Spain then no need to panic and as the old saying states: Keep calm and carry on!

If you are planning to buy a property in Spain or have fallen in love with a specific villa and do not want to wait until there is more certainty about the future of the UK in the European Union, you can compensate the depreciation of the sterling pound with some measures. Below you will see some examples:

  1. You could offer to pay the purchase price in Sterling pound. This may prove interesting for the seller, especially if it is a British seller (something not that unusual these days). By doing this you will not be exposed to the depreciation of the pound and you will not pay a higher price for the property in Spain.
  2. If the above is not possible, you should then use a foreign currency broker who will be able to buy the Euro for a more favourable rate than the one offered by your High Street bank. Unless you are a High Net Worth Individual who has the privilege of having a bank account with a private bank, in which case you may get a similar rate to the one offered by a Foreign Currency broker.
  3. Finally, the economy in Spain and in the UK are not that stable. Use this point to negotiate a reduction in the price. In spite of an increase in property demand in certain areas of Spain, the property market is still far from recovered and the current economic and political uncertainty could help to get a substantial reduction in the price that could compensate the money that you may lose with the depreciation of the sterling pound.

These are just a few recommendations. Obviously, don´t forget to instruct an independent lawyer for your purchase. Whether is Antonio Guillen and Claudia Font at Gunnercooke LLP (or another lawyer) do not make the mistake of using a lawyer recommended by an estate agent or the seller because that could lead to a conflict of interest and eventually to a problem.

 

 

A matter of degrees: icons, branding and a follow up on Santander’s stock of properties

 

 

navigator

This week let me talk about the new branding at the firm where I worked: DWF LLP.

For those who don’t know the firm, DWF LLP is a top 40 law firm with offices in Birmingham, Leeds, Liverpool, London, Manchester, Newcastle and Preston. The firm has grown considerably in recent years and such growth requires a proper branding.

The firm has now chosen a navigator concept, see above, to reflect how the firm combines excellent commercial guidance with a straightforward approachable style.  The firm looked into the best possible way to interpret this concept and came with this icon. It is inspired by the degree symbol and provides a visual link between the navigator concept and the circular “d” in our existing logo. It also reflects the added value of looking at things from every angle, taking a 360-degree approach and maintaining a clear focus in everything we do.

I don’t know what you think but I like the icon. It is innovative and it gives a clear message.

By the way, there has been some follow up to what I explained last week in my post. Santander’s initiative has now created some panick in the property market. There are some rumours that a massive discount in prices could force others to either match the prices or not get the properties sold. This could be quite bad for developers or other banks who cannot exceed certain margins in their properties. Things are moving quickly. Watch this space for more information. 

 

 

 

Everything you wanted to know about Timeshares (but were afraid to ask).

The Spanish holidaying boom that started around 30 years ago brought many positive things: continuous presence of foreign tourists, better hotels and infrastructures and a new hope for the then stagnated economy. During the first years of the boom, a new type of property ownership appeared and proved quite successful. It was known as timeshare and consisted in the right to use a specific holiday property for a specific period of time every year.

Many tourists, especially from countries like the UK, Germany and Sweden, purchased timeshares in Spain with the idea of being able to use them for the same week every year. However, the timeshares were not properly regulated and in many occasions those tourists signed very dubious contracts that did not have any legal grounds. The opportunistic found a golden mine in this type of ownership and suddenly dozens of companies started to sell timeshare. Interestingly, most of those companies were domiciled in an off-shore jurisdiction and the contracts that the purchasers signed did not make any legal sense as in most of the cases were subject to foreign jurisdictions. This lack of regulation led to the first scams and frauds.  

Then, in 1994, the EU enacted a new European Council Regulation with the aim of protecting those purchasers against this type of scams. When it comes to Spain, the said Regulation was not implemented until 1998 when a new law was created to regulate timeshares. The aforementioned law contained measures for the transparency in the purchase of this type of structures, granting the purchasers enough rights to avoid being defrauded such as, for instance, the seller’s obligation to register the development with the Land Registry, the prohibition of registering the company in an off-shore jurisdiction and the obligation to provide accurate and transparent information to the potential purchaser. At the same time, the purchaser was granted a 10 day cooling off period and, after that, a 3 month right to resolve the agreement in the event of a breach of contract.

In spite of the good intentions of the EU Regulation and the Spanish law, those dealing with timeshares continued to create illegal structures which did not comply with the aforementioned laws. Things such as Holiday Clubs, Holiday Certificates and many other similar names were created with the purpose of avoiding the strong Timeshare regulations. Once again, those new contracts were subject to dodgy clauses and foreign jurisdictions with no connection to Spain. Then, sometime in the past decade, things started to get really wild and fraudsters managed to obtain full lists of foreign nationals, many of them British, who presumably owned a timeshare in Spain. They contacted them under false pretences and indicated that they had found a purchaser, requesting amounts of money in advance for taxes that did not exist.

In the end, a structure that started more than 3 decades ago ended up being associated with fraud and waste of money. Nowadays, there are thousands of British who think they own a timeshare in Spain and are religiously paying the annual fees even if they do not use the place at all, being afraid of the potential consequences of not paying the fees. A little of research on the internet and any reader will see that some people are so desperate to get rid of their timeshare that they are willing to give it for free. Unfortunately, no one is interested in those timeshares anymore.

I have been dealing with British clients since 2003. I have seen more than 30 clients coming for advice in respect of their timeshares. However, only one of them had a proper timeshare title deed. The others did not own anything. They only had a certificate that it was not worth the word it was written and did not comply with the existing timeshare laws.

So what is next for those who own a timeshare in Spain? First of all, check if you have a proper title deed. This means a Spanish notary deed and not some sort of certificate issued in English by a company domiciled in an off-shore jurisdiction. If you have a proper title deed, then try to sell it. Some investors are interested in buying the apartments back from those who have proper registered timeshares. If you do not have a proper deed, which is quite likely to happen, then your next step depends on whether you are really using the timeshare or not. If you are and you like the place, then keep it. Keep paying the maintenance fee and using the place on the allocated weeks. If you are not using it and you feel it is more a burden than an asset, seek legal advice as you might be able to terminate your agreement and get rid of the timeshare. In our firm we have dealt with many cases and, fortunately, most of them have a way out.

If, on the other hand you are one of the thousands who have been defrauded by the so called timeshare estate agents that took money for selling timeshares and run away, there is a big case in Malaga against an organisation who defrauded foreign purchasers from France, Germany and UK. It has been estimated that the organisation managed to generate 8.6 million euros through this strategy. If you are one of them and have not appeared in the procedure bear in mind that the trial has been listed for the 9th May 2011. 

To conclude, a timeshare does not necessarily have to be associated with bad press. Some people own timeshare through a proper title deed which is compliant with the current laws. On the other hand, there is a large majority who think they own a timeshare when in fact the only thing they have is an empty paper with no rights and numerous obligations. In those cases, specialised legal advice may prove advisable.