Buying a property abroad? Get protection!
Posted: 3rd January 2017
Buying homes abroad is not without risks and you should always consult solicitors at the English end of the bargain to ensure that you are protected. In one case where that sadly did not happen, 16 British buyers endured a lengthy High Court trial before receiving substantial compensation from a Spanish lawyer who let them down.
The buyers, many of them retired, had each paid the whole of the purchase price for properties on the Costa Blanca. They had been handed the keys, and went into occupation, before discovering that the properties were subject to mortgages that had not been discharged by the developer, who subsequently became insolvent.
Estate agents with whom they had dealt in England had also gone into liquidation and only 4 of the 16 managed to raise sufficient funds to pay off the mortgages. The remainder never obtained good title to the properties and vacated them when unsatisfied lenders launched repossession proceedings in Spain.
In upholding the buyers’ claims against a Spanish lawyer who had represented them in the transactions, the Court found that he had negligently failed to warn them that there was no bank guarantee in place, as required by Spanish law. There had been no proof that the developer would be able to pass on good title to the buyers and that serious risk had been deliberately concealed from them.
The buyers who never obtained good title were awarded damages equivalent to the value of each property at or around the time when the purchases should have been completed. The four who had eventually obtained title were awarded the sums they had paid to satisfy the mortgages. All 16 were also entitled to interest on those sums and to recoup fees that they had paid to the Spanish lawyer. Awards were also made for the distress and inconvenience they had endured. The precise sums payable to each of the buyers had yet to be finally assessed but were likely to run well into six figures in each case.