Lessons from one unhappy experience of buying a house in Spain

It is an unfortunate fact that the legal system in Spain is at times desperately slow. Anyone considering buying a house in Spain is advised to find a good Spanish lawyer before signing anything at all and before parting with any money.

David Wright has just started a new blog to share his unfortunate experience of buying property in Spain with other people. See the first entry below.

Users interested in following his story as the final part unravels (and as, we hope, justice is finally done and the Wrights win the home and compensation they deserve) should check out his blog: Slow legal system where he intends to keep people updated with events as and when they happen.

Considering tourism and housing investment bring considerable amounts of wealth to Spain, the Spanish law system is appalling slow and expensive.
At the begginning of 2000 we enetred into a contract to buy a house, paid the 10% deposit and arranged a date with the notary and respective lawyers to complete. The seeler did not turn up and decided not to sell. THE BIG SURPRISE... he also would not repay the 10 % deposit never mind the penalty of 10%. Our only alternative was litigation. As we were not living in Spain at the time we left a deposit with a lawyer who told us that it would be a straightforward case.
Well our case was finally heard in the local courts some 18 months later and we "won" including costs. However, the seller chose to appeal on what I understand to be very flimsy grounds. Some 2 years later the case was reheard in the Regional courts of Malaga where the original decision was upheald. ie we "won" again. However, the seller again decided with his lawyer that an appeal was in order and so we have been waiting almost 2 years for the case to come before a judge in MAdrid's high court!!! We still do not have a date nor can the system give us an estimated date as to when the case will be heard.!!!
WHAT CAN fellow EURORESIDENTES learn from this? I believe the following:
1: Entering litigation is very expensive - even though we have "won" twice, we have still had to pay our lawyers fees and costs even though the costs were awarded in our favour. The amount equates roughly to 17% of the purchase/contract price!!!! per hearing. At this point we have paid almost 50% of the orginal house contract price, (deposit plus fees)
2: The seller continues to live in the property and with no penalty or change.
3: We have no idea of timescale as to when the High court can hold the hearing.
4: The so called filtering process that was supposed to be implemented to stop people using the appeal process to delay matters as a tactic does not function.
5: The seller is not obliged to pay the costs awarded against them IF they choose to appeal....SO APPEALING is a good tactic to frustrate.
6: So having a contract from a good lawyer and within the letter of the law, still does not really protect your rights in a timely manner. WHAT then is the point of a contract? it is only worth something to the lawyers in preperation for litigation!!!
7: Perhaps the law will one day help us to retrieve our deposit and costs or even the holiday home we wanted to live in and enjoy in the future. However in the meantime, it has only benefited the lawyers and the vendor.
8: So the law can still be seen as having no "teeth" and benefits the unscrupulous property owner/seller. TAKE GREAT CARE.
Finally, if anyone has any suggestions as to what can be done to improve the law or indeed speed up the process then let me know

Lowest rise in house prices in Spain since 2002

According to the General Director of Arquitecture and Housing Policy, Rafael Pacheco, the rise in the cost property has risen just 13.4 percent in the last 12 months. This represents the lowest rise for 3 years and, according to Pacheco, is the first clear result of the Spanish government's housing policies.

The General Director also indicated the regions in which house prices have risen most. These are Castilla La Mancha (19.8 percent), Aragon (16.4 percent) and the Valencian Region (16.3 percent). In Andalucía, traditionally one of the most popular destination for non-resident house buyers, the rise in house prices at 13.7 percent is only just above the national average.

The most expensive region as far as the cost of housing is concerned is Madrid (2,719 euros per sq. metre), followed by the Basque Country (2,537 euros), Catalonia (2,037 euros) and the Balearic Islands (2,003 euros). The cheapest regions are Extremadura (864.2 euros per sq. metre), Castilla La Mancha (1,255 euros) and Leon (1,297 euros).

Related
Revaluation of property in Spain per region
Investing in property in Spain
Houses for sale in Spain

Spanish-English real estate dictionary

Because of the amount of enquiries we receive from non-Spanish speaking property buyers in Spain about Spanish real estate terms and how the system here works, we are compiling an extensive Spanish-English glossary of real estate terms.

Having completed the glossary, we are now working on full definitions of each term, so that our users can get an idea of how the Spanish property market differs from the property market in the UK. In this sense we want to go beyond a simple bilingual list of property terms.

Send us any words not included. We hope to finish all the definitions in the next few days. Click on each term to get the full definition.

Real estate market in Spain, latest statistics

According to a study carried out by the Pompeu Fabre University (Barcelona) and Tecnocasa, the housing market in Spain has started slowing down and a halt in the massive price increase experienced over the past fews could be near.

The authors have based their opinions and conclusions on the analysis of the sale of over 12,000 second-hand houses and flats and details of mortgages granted to buyers from the first semester of 2004 up to June this year. According to the report, lived-in property (as opposed to brand new) now takes an average of 83 days to sell, which is 15 days longer than a year ago.

Another finding of the report is that property sellers this year are more likely to be prepared to negotiate the price than they were last year, and that on average buyers are able to secure a 5 percent reduction in the original asking price. During the presentation of the report yesterday, executives of Tecnocasa said that this should not be interpreted as an indication that the price of housing in Spain was at last starting to come down, since the reduction was usually agreed on property that was overhoused in the first place. However, in their opinion, the findings of the report do suggest that the conditions necessary for an eventual slowing down in the Spanish real estate market at some time in the near future are starting to appear.

Other findings of the report:

• 30 percent of house-buyers in Spain are foreign.
• 72 percent of all house-buyers come from Spain or another EU country. The rest are non-European, mostly people from South America, Eastern European countries and North Africa who have settled in Spain
• Over 49 percent of second-hand house buyers are between 25 and 35 years old, and 61 percent buy the property together with another person
• The average mortgage in Spain in June was 154.890 euros, a rise of 18.80 percent with respect to the same month last year
• In over 60 percent of all cases, the mortgate loan covers between 75 and 100 percent the total value of the property
• Small flats are proportionally more expensive than larger flats and houses
• The average price of lived in property in Spain per sq. metre is 3,000 euros in the most expensive areas of Spain (Madrid, Barcelona and Vizcaya). dropping to just 1,500 euros per sq. metre in the provinces of Alicante, Cadiz, Seville and Valencia
• The most expensive cities in Spain in terms of housing prices are (in order) Barcelona, Madrid, Bilbao and L'Hospitalet de Llobregat (3.070 euros).

Related links:
Mortages in Spain
Mortgages for non-residents in Spain
The price of housing in Spain
Investing in property in Spain