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Avoiding Problems Q&A

Frequently Asked Questions

With a market that attracts such large amounts of attention and money, there will always be unsavoury elements in the overseas property industry who take advantage of unwary or trusting buyers, but as the industry continues to grow, efforts are being made from within the industry to improve both standards and understanding between agents and customers. Some of the problems that BuyAssociation members have encountered in the past, along with possible ways to remedy the situation, are listed below.

Suspect in Spain?

We purchased a week in a timeshare complex eight years ago. We have now been approached by a Spanish solicitor who has a client wishing to purchase our week. Do you think this could be genuine? We have received telephone calls and the contracts have arrived. An English member of the solicitor’s team phoned to go through paperwork (most of it in English). Then said we would need to send the 25% tax payment to Spanish government before anything else continues — i.e. transfer approx £2,000 into an account. Is this a scam or genuine?

My first reaction to this is that it is a scam. What does the money need to be paid in advance for, and what specifically will it cover? The capital gains tax, if it applies to you, is paid only on a capital gain you have received, and that is paid to the government, not through another agent. If you are buying and making payments, even these should only go into a recognised solicitor's escrow account ahead of the final completion of the sale. I have also conferred with a colleague of mine in Spain, who also thinks this is suspect. Be wary...

Inspection Trips

I have paid a deposit to reserve a property until we go on an inspection tour the end of November. The firm we are dealing with have asked us to sign a preliminary contract. Is this correct? I was under the impression that our 1,000 euros would be enough.

We would always advise against handing over any kind of deposit or reservation fee without having any kind of paperwork to protect you. To be honest, at the moment, there is nothing besides an ethereal, verbal agreement in principle between yourselves and the developer. Although I am not suggesting that this would be the case, but until you have a contract in place, there is nothing to stop the company you are dealing with from disappearing with your cash, and there have been instances of this happening when people have dealt with unscrupulous companies in the past. If you are happy with the document, have had it checked by an independent legal expert to make sure it allows you to have the deposit returned should the development or plot not be what you have been led to believe. In the normal run of things, I would recommend that you should visit the development and plot before you commit to putting any money down, but in this instance, you may be best advised to make sure you get hold of some paperwork in order to protect yourselves and your initial deposit as far as possible.

Planning in Greece

What happens when you build a property in Corfu without a building license? Can you put it on the property market for sale?

I think it depends on how open you are with potential buyers as to the status of the property with regards to the Greek laws. Although many properties that have been built in Greece since the Second World War have no official permission or license, as the property market continues to grow, the government will no doubt be getting stricter with those properties built without specific permissions. Essentially, this means that somewhere along the line, whoever owns the property will have to get the appropriate permissions to be able to sell on. You may find it far easier to sell your property if you now apply for retrospective planning permission and licenses — buyers are ever more knowledgeable about what they buy and what they need to ask for, and the possibility is that in the future the Greek government may introduce penalties for those who failed to gain the appropriate permissions in advance.

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