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General: Overseas Property Problems: Construction - Simon Conn

Problem: construction issues

Sadly it appears that levels of poor overseas property construction have increased in recent years. High levels of demand a few years ago, particularly in some Spanish regions, led to some builders taking shortcuts in their haste to finish specific projects. Pressure to build more quickly quite simply led to the use of poor working methods, the bypassing of building controls, and the use of sub-standard building materials. This has been an issue in some new-build developments for a number of years now, but whilst problems were previously limited to the quality of the finish and general attention to detail, it seems that things are now more far more serious.

We’re now hearing reports of some property foundations which have been found to go down only a few metres instead of the correct depth, and sometimes in very poor soil. There are also examples of properties that have been built on flood plains which didn’t become evident until it started to rain, whereupon owners discovered to their horror that their homes were actually built in the river. Unfortunately it doesn’t stop there – some homes have been built on rubbish dumps or disused mines, and in some overseas coastal resorts, they’ve been built too close to nearby cliffs.

There is also evidence coming to light of a connection between substandard construction and cases of damp problems. There can’t be many owners of brand new properties who could ever have imagined that this would become an issue, especially those with homes located in very warm and dry locations. But it’s a sad truth and the most likely cause is the speed at which the new developments along some coasts were erected to cater for huge demand a few years ago.

However, it’s important to note that construction issues are not unique to new properties. Older properties, similar to those in the UK, may have ‘hidden’ problems such as damp, timber rot, wiring defects or subsidence. And, naturally, you’d like to be aware of any such problems before proceeding with a purchase.

How to avoid this situation

It’s absolutely imperative that you arrange for an independent valuation to be carried out on the property you want to buy, and this applies to new-builds as well as re-sales, regardless of age. This should point out any issues such as subsidence, damp and wiring defects, and very importantly, any potential boundary disputes.

If you’re taking out a mortgage to pay for your home overseas, the lender will arrange a valuation as part of the normal mortgage process. If you’re lucky enough to be a cash buyer, there is obviously no lender involved to carry out the usual checks, so it’s crucial that you arrange this yourself through an independent surveyor.

If the property involved is more than five years old, this should be the equivalent of a full structural survey. And remember, overseas property salesmen earn the highest commissions on nice shiny white houses rather than ones that look a little sad in the midday sun. There could be a difference of up to 10 per cent.

And while it may sound very obvious to some, but you’d be surprised at how many overseas property buyers sign on the dotted line without asking basic questions such as who the developer is and how long they’ve been trading. Some have never even visited the site, or looked at other properties built by the developer to see for themselves just how well, or badly, they’ve managed to survive wind, rain and high temperatures. If you’re buying from a developer, you should check their track record and how long have they been trading. If possible, obtain some references from previous buyers, and check comparable properties in the area and any re-sales offered on the same development.

Simon Conn

Simon has over 25 years' experience in arranging overseas mortgages in over 45 countries. He is involved in a number of projects, especially those involved in consumer protection. Simon has a strong media profile and is an established industry expert on matters relating to the purchase or refinancing of overseas property.

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