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Bank, Lawyers and Developers Profit through Expat Misery

Mon 5th Sep 2011

A number of expat investors have been left with a feeling of contempt by the systematic failing of the Spanish authorities to assist them in a lengthy dispute between their bankrupt developer and the Bank.

Around 100 owners of property at the Monte San Juan development in Pulpi, Almeria, had paid staged payments of between £40,000 and £140,000 and look unlikely to see a penny of their money returned to them.

When the developer, Prolacon Mar, filed for Bankruptcy earlier this year the Cajamar Bank immediately seized the properties and took steps to liquidate their assets by selling them on.

The first many of the owners knew of this was when Bank and Town Hall officials arrived at the development to conduct a survey and compile a full list of the assets and the state of the project. The Lawyers, Developer and Bank made no steps to contact the owners.

Even though the official contract for the development expressly mentioned being covered by a Bank Guarantee, the Bank denied the existence of any such arrangement.

So have the Spanish Lawyers concerned with this case acted negligently, or even corruptly here, or does the fault lie with the repossessing Bank who looks set to keep all the money that should righly be handed over to the 'owners' ?

A Spanish court subsequently approved the sale by auction of the properties in order to raise funds - which would be handed to the Spanish Tax Authorities and the Cajamar Bank - to cover their costs. No provision was made for recompensing the hundreds of private investors who had in many cases lost their life savings.

The Bank agreed that the residents could bid to 'buy back' their own properties, however, no details were ever forthcoming to advise those effected how, when or where this could be done, and it was only after the event that owners found that site had been sold in it's entirety to a local business for 1 Million Euros.

The Businessman then allegedly sold the properties on to a second developer some weeks later for 2 Million Euros ! and many of the properties have now appeared on the market - below their initial market price, but still representing a considerable profit for both the Banks, the Businessman AND the Developer.

There are way too many unanswered questions to list in full here, but surely some of the most important ones are this :

WHY should it be that it is the lone property owner who has to forego their life savings at the expense of a Lawyer, Banker, Developer or faceless corporation ?

WHY do the Spanish authorities allow this to happen time and time again ?

WHY did the lawyers involved here not pick up on the fact that the Bank Guarantee was not in place, and WHY are the lawyers not held accountable for this oversight ? WHY have a lawyer at all if the buyer has to then double check all the work that they are supposed to be doing themselves ?

WHY are others allowed to profit so freely on the back of the financial loss of others ?

Perhaps most importantly of all WHY was Spain's Minister for Housing, Beatriz Corredor, sent on a road show of Europe's major cities to promote foreign investment in the country's property ?

The Minister quite worryingly refused to acknowledge the scale of such problems in Spain, claiming that it was less than 1% of all expats who encountered problems, but more so that Government would not get involved in any compensation claims unless the Courts had expressly ordered it.

One of the 'former owners' of Monte San Juan, Jane Christie, perhaps sums it up best " I contributed towards those bricks and those foundations and for the kitchen and bathrooms - so why should I be left with nothing ?"

Comment on this Story

In 1988 when we bought in Spain the banks were corrupt, you would have thought that being in the euro after all these years things would have changed but obviously not,no wonder the Spainish property is in the mire,and NO chance of getting out of it !
Pottsy189 - Fri, 4th Nov 2011

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