Author Archives: akinloch

A Mallorca surveying horror story and why you should have a building survey

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We were instructed to visit a property in a well-respected area of SW Mallorca and asked to look at an entrance lobby, which appeared to be leaning.

Once within the property, we noted repairs had been carried out to the original property and permission to investigate further was obtained from the owner.

This involved taking up a few tiles and exposing a few filled cracks. It also involved a more detailed study of the house and ground.

Further research was carried out on the history of the property including going back to study the original plans and documents.

The information provided did not specify exactly where the soil tests were carried out on the plot or surrounding area.

Our research found that the architectural recommendations at the time of the report include the use of a slab or rigid foundation as the land contains aggressive sulphates and gypsum limestone and that caves and mines are known to have existed in the area. this hadn’t occurred.

Furthermore, heavy rains or extended droughts can bring on cover collapse. Each weakens the soil over a grike (natural pothole), either by saturating the soil with water or robbing it of cohesion.

Near buildings, downspouts and leaking utility pipes can accelerate the process. Eroded soil falls into the grike and water moves the soil to an underlying cave, forming a cavity in the mantling soil. In high-flow events, water in the cave may back flood into the overlying soil. As the water recedes, the cave and grike drain faster than the soil, which means that saturated soil spans the void in the grike. The overloaded soil arch falls into the soil cavity and the cover collapses.

The resulting research coincided with further movement cracks opening up in the land and building.

We, therefore, advised the owners of our findings and shortly after the property had to be vacated as imminent collapse was likely.

The owner of this 4m€ property is now left with a condemned house on a plot that is likely to disappear down a big hole.

They had bought a house that had serious problems covered up and disguised at the time of the purchase and the whole situation could probably have been avoided if he has had a survey at the time of purchase.

 

Deia

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Deia is renowned for its wealthy and artistic residents and visitors, such as Andrew Lloyd Webber, Bob Geldolf, Lynn Franks, Pierce Brosnan…

Historically it is known as the home of Robert Graves. It is possible to visit his house.

It is a small village with a resident population of approx. 1,000 and with a municipal area of approx. 15km.

However, in spite of its size, there are many essential facilities and amenities in the village, such as a primary school, restaurants, banks and a small supermarket. More amenities and facilities are available in nearby Sóller  (7km) or Palma (30km), the island’s capital.

The countryside and geography of the area are outstanding. The 1,000m high mountain range of La Tramuntana forms a dramatic backdrop to the village and falls steeply to the sea.

This area forms part of the Tramuntana Protected Area of Natural Beauty (ARIP), and has recently been categorized as a world heritage site. The surrounding land is mainly un-spoilt ancient terraces that slope naturally and steeply towards the sea. These hillsides are stocked with pine, olive, orange and lemon trees.

There is an interesting archeological museum in Deia, set up in honour of William Waldron.

The town has a very attractive pebble beach known as Cala Deia, with an excellent restaurant. It can get busy in the summer though, so best visited in the morning.

 

 

What is a nota simple?

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A “nota simple” is a summary report from the Property Registry that describes the property in the deeds, known as the “Escritura”.

It should be noted that a nota simple is only informative and is not valid in front of a court. A registry certificate is needed for the courts.

Judicial information is brief, and usually covers outstanding debts (mortgages or unpaid taxes), the current owners, the boundaries, the total square meters of the land and of the house.

It also describes the type of land, any rights that others may have on the property, such as public paths/roads, water or sewage lines, etc.

 

Formula One Racing in Mallorca?

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Plans for a Formula One race on the Balearic Islands are still progressing.

Mid last year, it emerged that Llucmajor, a short drive from Mallorca’s major Palma airport, was the likely site for the project, which would replace the European Grand Prix at Valencia.

The German-language Mallorca Zeitung reports that organisers are now seeking investors to fund the first race in 2012, with the estimated cost at between 160-200 million euros.

“The project would help not only the local community but give the whole island a tremendous economic boost,” said Llucmajor mayor Joan Jaume.

The track’s local designer Gabriel Palmer has been criticised for his inexperience, but he said he has consulted with the Ferrari team.

“I have included their (Ferrari’s) corrections in my current draft,” said Palmer.

The head of the Balearic racing federation and mayor Jaume have already met with F1 chief executive Bernie Ecclestone, and F1 event guru Philippe Gurdjian has reportedly also been involved.

“Ecclestone was enthusiastic and encouraged us to pursue the project,” said federation president Agustin Arbex.

He also revealed that September 2012 has been earmarked for the inaugural race date.

The Bad Bank – coming to Spain soon.

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The Spanish government is creating a “Bad Bank”, or “Banco Malo”, in which to put all the toxic property assets.

The idea is to progress from the current building crisis by drawing a line under the current woes in the construction sector.

Basically, the Government of Spain issues debt and buys from Spanish banks all their bad investments, which are accumulated in a “bad bank”.

Presumably, the acquisition takes place at a significant discount relative to the actual value, so that in the long-term, taxpayers could even win when the assets are re-sold.

At Property Works, we beleive that this measure, although not without its risks, could be of some help to help the Spanish economy overcome the deflation of its recent property bubble.

Time will tell…

Cronyism in Spain according to the Guardian

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A good article has appeared in the Guardian on the antiquated and unproductive system where the corruption of “amiguismo” prevails.

The journalist has talked to some spaniards who work abroad – in London, Holland, Germany, the US. They all miss the sunshine, the food, the strong family bonds, the warm, easy Spanish way of living. They also share – and here is the thing – an exasperation with the Spanish way of work.

One, who started out as a waiter, is now the operations manager of a successful restaurant chain. “To have got ahead the way I have in London I’d need an uncle with good connections. I didn’t, so I left.”

Another one works in the digital video industry. He had entered some work for a prize, but a number of prestigious British companies were running against him so he had no expectation of winning. Yet win he did. On pure merit. The notion of an unconnected unknown like him winning an equivalent prize in Spain was, he said, unthinkable.

For the author of the article, the lessons from these two stories, entirely typical of Spaniards abroad, are clear: the Spanish are not inherently idle; the labour market in Spain does not sufficiently reward talent and hard work. The Spanish disease that both these young men said they had fled was “amiguismo” –”friendism” – a system where one gets ahead by who one knows.

Using RICS Surveyors in Mallorca

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In Mallorca and Spain, RICS (Royal Institution of Chartered Surveyors) residential chartered surveyors are well-placed to offer varied and comprehensive property services.

The complex and foreign Spanish property market requires independent and professional guidance. Members of the RICS are qualified and experienced property professionals who offer independent and impartial advice. They can be identified by the letters after their name, MRICS or FRICS.

The Royal Institution of Chartered Surveyors (RICS) is a worldwide professional body whose members are also present in Spain, with some 30-40 members working across the peninsula and the islands.

Our aim is to provide professional support services relating to property throughout Spain.

Areas covered by the expert knowledge and awareness of the RICS residential surveyors in Spain may include:

Property valuations

Building surveys

Homebuyer’s reports

Measurement of sites and premises

Assessing the impact of a development in terms of economic viability

Land and property agency

Project and construction management

Selling and buying properties and sites on behalf of clients

Advising clients on the purchase and sale of individual investments

Managing property portfolios

General property consultancy

Our remit is broad and diverse with each residential surveyor offering different specialities. Please note, if one of the listed surveyors does not carry out the required specific specialized activity, he or she should be happy to point you in the direction of a colleague who should be able to help.

info@propertyworks.org

www.propertyworks.org

“La Opción de Compra del Inmueble” or “Property Purchase Option Contract”

“Opción de Compra” or “Purchase Option”

This is a contract signed by both parties outlining the terms and conditions of the sale.

It should  describe:

  • the property to be sold including the building’s size and land size, neighbours, rights of way, easements, etc
  • its registry and deed number
  • its ratings number
  • the price
  • the vendor and purchaser’s name, id and addresses
  • the deposit amount
  • the date of completion
  • what will happen if the contract is broken
  • who will hold the deposit
  • the commission payable to the agent by the vendor
  • consider subject to survey clause.
Comments:
  • Do not confuse an  “opción” or option with a “señal” or deposit. A señal is a small deposit, perhaps 1,000€ to hold the property until contracts are drawn up.  It has no legal status and is usually done over a handshake.
  • These contracts are often provided by the agents and primarily represent their interests or the vendors interests.  Do not be afraid to suggest that your lawyer will want  to be provided with this document.
  • You will need independent and impartial legal advise on a purchase contract, so get a lawyer.
  • Ensure you have an English translation so you know what you a signing/buying.
  • The days of paying 10% deposits are gone . Try negotiating down to 5%. This is much more reasonable.
  • Do not expect to get your option deposit back easily without a fight if the money is held with the agent, vendor’s lawyer or vendor, so make sure the money is held by a trusted third party.  If it goes to court it can take years.
  • Do not sign an option until a minimum amount of due diligence is carried out. Most vendor’s can and should wait for you to check out some basic pre-purchase details.
  • Remember an unprofessional agent wants your signature as soon as possible in order to claim a commission.
  • Forget paying cash for the option, however much the agent or vendor likes it. This is an antiquated and unreasonable request.
 
 
 
 

Property Works Mallorca featured in The Financial Times

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Property Works is proud to have featured in an article published by Emma Mahony in the Financial Times:

Alastair Kinloch of Chartered Surveyors Property Works says:

“Blue-chip properties and locations attract buyers who are not affected by borrowing, so these purchases are still quite strong and they are the only area where there is movement at the moment.”

Inland, it’s a different picture. “It seems that properties up to €2.5m are the ones that are suffering”, says Kinloch. “Below €500,000, the situation is more comparable to the mainland.”

Kinloch’s says Mallorca’s government has helped to maintained prices: “A lot of money goes into infrastructure – from local taxes, Madrid and Europe, and there have been sensible zoning and expansion plans, as well as strict control of frontline development.” Kinloch’s own property in Sóller has risen in value because of the construction of a tunnel through the Trumantana mountains, reducing the commute to Palma to half an hour.

Follow this link for the full article http://www.ft.com/cms/s/2/d7dadcce-a028-11e1-90f3-00144feabdc0.html#axzz1w49Xsgub

 

Daily Mail reports a slump in villa values

The Daily Mail has reported that Spanish property prices are still falling and many homes are left unsold. The focus of the article is on southern Spain and recommends those trying to sell-up and cut their losses to hold out for another 2 years.

The Spanish government estimates there are 700,000 unsold new-build houses across the country. In the article, the Mail reveals some of the heartbreak behind the figures…

Like Marian Henderson, who moved to the south of Spain seven years ago with £1million in her pocket. But when – or perhaps that should be if – she finally makes it back to Britain, she will be lucky to do so with one quarter of that sum. She’s no spendthrift – the money she has lost has been on bricks and mortar. Her home, a beautiful four-bedroom country house surrounded by orange groves, a swimming pool and stables, was once valued at £725,000. Today, it is on the market for just under £270,000.

Marian’s is a desperately sad tale, but, unfortunately, it is not an unusual one. Across Spain, the British expat dream is fast turning into a nightmare. Having left these shores in the hope of finding a better life abroad, a legion of Brits have instead found themselves caught in the midst of an economic storm. The properties in which they invested have fallen in value by as much as 50 per cent in the past four years. This is down to massive over-supply. The Spanish government estimates there are 700,000 unsold new-build houses across the country.Of these, 400,000 are on the coast, the vast majority in the south of Spain where many British people have bought properties. Take into account the fact that there are the same number of older homes being advertised for sale, and it is little wonder that experts are predicting prices will fall still further.

As the property bubble has burst, so the rest of the Spanish economy has suffered. The banks are sitting on vast amounts of bad debt, while the construction industry has collapsed. Reports recently showed that of 60,000 property sector companies, 23,600 have gone bust, with debts of more than £100 billion. As a result of this economic turmoil, Spain is now in the midst of its worst recession for 50 years. A record  4.6 million Spanish workers, or one in five, are now unemployed. This figure is the highest in Europe.

And if that weren’t bad enough, many British expats, particularly pensioners, have been hit by the weakness of the pound against the euro. Where a £10,000-a-year pension would have been the equivalent of €16,500 nine years ago, today it is worth nearly €5,000 less.

Hardly surprising, then, that so many Britons are desperate to bail out and return home. Companies that specialise in exchanging large sums of money – such as the proceeds from a house sale – have seen a 50 per cent increase in transactions linked to repatriations.

You can read the full article here : http://www.dailymail.co.uk/news/article-1359029/Spains-villa-values-HALVED-UK-immigrants-afford-come-home.html#