Antonio Flores’ Blog

A row between the Secretariat of Labour and Immigration and the Central Police Station is threatening to discourage hundreds of potential property buyers from taking the plunge. The former has ruled, against the opinion of the latter, that the obligatory NIE numbers can no longer be applied by representatives with a power of attorney and so personal attendance is mandatory (as from the 3^rd Jan 2012).

Although the reason behind the disagreement appears to be how both Government offices interpret a particular norm, the consequences can be devastating given that NIE numbers are now required for almost anything and many people will just not feel that Spain is a country worth investing in if you need to queue up at 6 AM at police stations, get a ticket, walk to a specific bank to pay the fee and then go back to the police station to apply for the number: buying property, setting up a business, signing up for a job and many other legal matters just don’t deserve this third-world treatment. In Madrid, a city that aspires to become a European financial hub, you can expect a 3 month wait for an appointment to apply for the NIE.

Also, there is a total lack of uniformity in what documentation is required: for EU and Non-EU citizens alike, some police stations in the Costa Blanca are asking for notarized documents of the property one wishes to buy, others will accept a reservation contract (original or copy) and proof of payment of deposit and if you are not around to pick the number up, you will have to give an official power of attorney to someone if you are in Ibiza. The random nature of documentation requirements is perplexing to professionals and unbearable to investors.

Spanish Consulates, not particularly equipped to assist investors, have been commissioned to process applications and return an NIE number within 5 working days (RD 557/2011), a tall order for some of such offices not used to dull admin work. And that is if you have a consulate nearby, as cost-cutting has meant that the Spanish Government has closed many (e.g. Manchester and Hamburg), so if you happen to be a billionaire currently in Vladivostok looking at buying a property for a zillion euros that you have already visited and reserved, and you are told that you need to fly to Moscow, or back to Marbella, to apply for the NIE that you forgot to get whilst property hunting, then Spain has a problem.

The property industry is dismayed by what are probably the weirdest, craziest and most idiotic laws around Europe, and is hoping that as with most things, common sense will ultimately prevail.

Antonio Flores Property NIE Number, spanish red tape

It sometimes happens that, when you start off a new business venture where reputation is considered to be crucial, you need to start off with a slate cleaner than clean. Of course, it is quite possible that one has left a few debts unpaid, particularly with lending entities (who cares, really!) and perhaps a bit of social security or taxes, as they are the last to the get paid, generally.

What is just defies prudency and common sense is starting off a business consisting on sorting out other people’s real estate problems when you have a few skeletons in the cupboard that are rattling like a dildo in a biscuit tin.

Because, this is exactly what is happening with Restructuring & Recovery Consulting Group, fronted by Mark Farber. The story (PDF)(the real one might I say) is actually one that he has twisted to make it one of his case histories, the truth being far from what he claims it to be.

Indeed, the project was located in Inland Andalusia, in Casarabonela to be accurate, it was certainly close to 20 hectares, and changes in regional planning laws did render the project unacceptable (no mention of the crisis here nor running out of cash). And this is as far you can stretch the truth, as the rest is a load of imaginative B.S.

Not only was there no proper project in place, but also, nobody proceeded to immediately discuss the situation with local and regional planning authorities, and no agreement was reached that re-zoning would be acceptable if the project was repositioned as a tourist oriented resort rather than a straight residencial developement.

And, on top of the pile, you get the worst lie of all: a large amount of money was also owed to a local savings bank which had already begun the process of recovery. Mark, it is Lawbird’s clients who are owed the money, and they are a British couple and not a local savings bank, unless they have morphed into some rural lender in the last couple of weeks. And they are owed close to €1,300,000 which seems they will never get if, as your lawyers say, the company that owns the cortijo (Rural Excellence S.L.) will be swallowed by the bankrupt Ecur Constructora Urbanizadora S.L., which owns I assume also part of Restructuring & Recovery Consulting Group, given your statements.

And finally, you have not been instrumental in negotiating with the savings bank to refinance the debt, because there is no such thing. If any, you have been instrumental in keeping my clients like a mushroom, in the dark and being fed bullshit. And unpaid. Oh, and also, killing a good number of avocado trees by failing to water them…

See you in court!

Antonio Flores Litigation, Property Restructuring & Recovery Consulting Group

Last Sunday morning, while cycling around La Cala area, I spotted what looked like an isolated bored Spanish donkey with what looked like a kind of a smallish stork on its back, the latter presumably going about the job of cleansing the animal from parasites, and the former happily accepting it. This is what they call symbiosis, or a mutually beneficial relationship involving close physical contact between two organisms that aren’t the same species. I took some pictures but the mobile was not powerful, unfortunately. In a strange mental composition exercise whilst negotiating the curves, I immediately thought of more than a handful of Spanish property developers and Mr. Carlo S. Mottola, in what could be one of the biggest cases or fraud in the Spanish property sector, and the relationship they had struck to bring misery, anguish and pain to, once again, off-plan property buyers. On the one side of the fraud, sitting comfortably on top of the donkey, Mr. Mottola, the man behind the bogus Compagnie Des Garanties de Du Luxembourg S.A., Company of Guaranties Ltd. and Cauzione, flouting every mandatory insurance legislation provision and without a penny behind him, and with the Spanish Insurance watchdog DGS (Dirección General de Seguros) warning about his activities as early as 2003 (and who incidentally have done nothing since), erected himself as the provider of surety contracts worth tens of millions of pounds knowing full well he could have never honoured them, if we notice the following:

1. His Luxembourg company, boasting a share capital of €24,283,800 on the letter head of the policies given out by the hundreds in the years 2003-2008, had actually been referred to the Courts on the 10th of November 2003 by the Luxembourg Prosecution Service and, after a remarkably quick Court process (which we can only dream of here), the company was “pronounced dissolved and ordered its liquidation” for what was deemed as grave legal contraventions, these being not submitting a Balance Sheet nor a Profit Loss Statement since the company’s incorporation, in 1999, nor having a known address since the company was reported to the authorities in 2003. Just as his insured property buyers have been used to, he failed to turn up to the hearing…
2. His accountants in London, Arram Berlyn Gardner, had already warned, in early 2009, that the company was not a viable enterprise.

   

3. Lack of any recorded payments on claims (or perhaps one or two smallish at the beginning to give himself a credibility that he lacked) to any of the hundreds of people who would have been entitled to a payout.
4. Record of payments made to companies under his control, or directly related to him, one in the Channel Islands and the other one in the US: And again in 2008, another payment: And what about the American company?

At the other end of the scam, the Spanish developers, the donkeys in the symbiosis relationship and in real life too, real quadrupeds who, after having their applications for bank guarantees or insurance policies turned down by the likes of Santander, BBVA, AXA, Zurich and many others, resorted to the unscrupulous Mr. Mottola, who would, oblivious to what is right or honourable, and legal too, print off as many policies as required to provide sham covers to the unsuspecting property purchasers. If you wish to know what these policies look like think about the lottery prize certificates that Nigerians send you by email on a monthly basis, when you strike lucky with them: they actually look genuine in comparison to Mottola’s “monopoly” policies.

But the net is now closing: already, the Malaga High Court, in a civil ruling involving a developer currently serving time for tax fraud and indicted on further corruption and swindle charges, stated that: Lastly, to have a perspective on the behaviour of Naviro in this matter, we need to refer also to the surety policy invoked by the defendant, which happens to be completely bogus for the company “Compagnie Des Garanties S.A. is not authorized to operate in Spain, as has been proven in 2 reports, one from the Bank of Spain and a further one from the Insurance Directorate General. And recently, a story about one bogus insurer which is being investigated by the police for insurance fraud for having offered bogus insurance cover and will be presumably soon accused of criminal swindle. The lady in particular was registered with the Companies House to…distribute electrical appliances. Compagnies des Garanties Ltd. is equally currently registered in Spain as a branch operation, and duly registered too with the tax office to carry out the activity of…Maintenance and Repairs of Motor Vehicles. This further dent on Spain’s already appalling reputation for not looking after foreign investors bodes badly for the Government’s plan to bring back foreign investment (a child would see this), not to mention nationals of Spain who have also been caught out in this scam.

And so, who will pay for this? Well, difficult to say now but it seems that a the spectrum of responsibilities will range from possibly criminal to civil and potentially, administrative, given the supervisor’s failure to bring this man to justice, but more importantly, for having allowed him to operate since he was discovered, back in 2003!

And what does the law say?

• Article 4.2 of the 2004 Private Insurance Organization and Supervision Act (Real Decreto Legislativo 6/2004, de 29 de octubre, por el que se aprueba el texto refundido de la Ley de ordenación y supervisión de los seguros privados) states that any “contracts signed with an unauthorized entity, or one whose authorization was revoked, will be deemed null and void…in the event of a claim being registered the persons or entities responsible will have to pay as if the policy had been valid…The obligation will be joint of the company and any persons who would have authorized or permitted the conclusion of a contract.”
• Article 48.3 of the same, when stipulating the administrative fines, states that…the dispositions of this article will be understood to be applicable without prejudice to any other responsibilities, including criminal, that may be incurred in.
• Article 248 of Spain’s Penal Code: A person who, with the intent of gaining a benefit, uses deceit to produce error in another person, inducing him/her to dispose of own or third party valuables, will be liable to be sentenced to imprisonment for 1 to 6 years.

And what about the regulator, the DGS, who did have knowledge of this since, at least, 2003? In my opinion much more could have been done, in 9 years, to prevent this individual from ripping customers off through unscrupulous developers even if that meant filing a denuncia via the Prosecution Service, a job that would have taken a civil servant one morning. To our knowledge, Mottola’s offices are still open, except for the processing claims side of things, which is what he never intended to anyway. This inaction is consistent with nonfeasance in public office, or negligence, which would constitute grounds for a claim against the Spanish State. Documents

• 2007 audited accounts (PDF 275 Kb)
• 2008 and 1st half 2009 accounts (PDF 466 Kb)
• 2005 French Branch of Compagnie des Garanties Forced Liquidation (PDF 1,095 Kb)

Antonio Flores Property, Scams Carlo S. Mottola, Compagnie des Garanties, Compagnie des Guaranties, Company of Guaranties Ltd. and Cauzione, Dirección General de Seguros

About to wind down for the weekend, yesterday evening I received an email from Alexandra Goss, personal finance reporter for the Sunday Times, in relation to a few enquiries sent by Spanish property buyers, and sellers, that were unexpectedly receiving letters from the Spanish tax office challenging the prices at which they had bought, and sold, their properties in Spain, respectively.

Indeed, one thing came to her mind considering the state the Socialist Government has left Spain in: the Spanish Tax Office (AEAT) is desperate for revenue and are finding avenues to levy extra demands for transfer tax from property buyers, and so, if the Spanish property market was not an already depressed sector of Spanish economy, they now come, as real predators, to make it even harder for people to buy, and sell.

This is the real paradox of it all: the Spanish Interior Minister flies out to England to do his silly property-selling road show, and in Spain, those buyers get shafted by the Inland Revenue his Government controls. The good thing? That courts are, mostly, not contaminated with the wrong ideology and will employ reasoning and logic to counteract this property-buying prevention scheme, and will mostly, again, throw out of court these extra tax demands.

What should one do if one receives one of these letters, after of course all the understandable cursing and imprecating? Well, go get a lawyer that knows his stuff and appeal within the stipulated timeframe, by choosing one of the 2 legally available avenues:

1. Challenge the “unreasoned”, “standardized” valuations made by the tax office that happen to be nothing else than some formulas being applied on unknown coefficients by a computer program that pumps out wholly impossible valuations (a 2-bedroom flat on a 200-unit empty development in Manilva worth €280,000?). The funny thing about this is that University graduates sign off these valuations, knowing that they are essentially wrong and untrue (land registrars in most of Andalusia are in charge of the Transfer Tax collection, and/or “arquitectos tecnicos” employed by the Andalusian Government, the same graduates that think that the property is twice as expensive!).This is what the courts in Spain think about these predatory extra tax demands:
   • Supreme Court 14^th December 1998: The valuation carried out by the architect for the Tax Office is a standardized printed form full of scant references that have the weight of an opinion rather than that of a property valuation, and therefore one cannot assume it has any reasoning or justifiable criteria, losing its legally binding effect.
   • Economical Administrative Tribunal 20-06-1995: The legal mandate granted to the Tax Office to raise supplementary tax demand fails due to the Tax Office not following a logical process when arriving at property values but rather by using abstract figures when calculating these. Also, the Tax Office fails to properly provide a valuation when they simply perform arithmetical calculations on the basis of a unitary basic module, without reasoning or justification, and certainly can never comply with the law when to this value or figure, a stereotyped all-purpose text is added on as reasoning. (Tantamount to calling the “arquitecto tecnico” a dumbass).
2. Carry out a proper valuation by a proper “arquitecto técnico”, or as they don’t like to be called, “aparejador”, who will surely determine that the property’s real value is either the price you paid for or sold it for, or perhaps less, and submit it, hoping that the “arquitecto tecnico” working for the Tax Office will abide by the norms of ethics of their profession and admit to being wrong. Because the funny thing here is that, depending on whether these university graduates work for you, or the Tax Office, their opinion of what the quoted property is worth will be €140,000 or €280,000, respectively. It´s funny, certainly, but it is also very worrying.

This subject matter is very very interesting, and so expect some interesting, and surprising, developments very soon, including a legal suit against the Andalusian Tax Office.

Anyhow, check tomorrow the Money Section in the Sunday Times, I am quoted there.

Antonio Flores Property, Taxes spanish property taxes, Spanish Tax Office, spanish transfer tax

Spanish Minister Jose Blanco, “Pepiño” as he is known to his closer aides, has made a right fool of himself, again, by traveling to the United Kingdom with a bag full of unsold substandard properties that are unlikely to find buyers in the next 5 years, unless, of course, prices are slashed by at least half.

What he was not expecting the outrage among representatives of thousands of people who have not had their properties built (and deposits returned), or have had licenses on new properties revoked, demolition orders passed (in a number of cases, well-deserved), supplementary tax requests filed by the regional tax offices and a few other property-buying prevention measures applied by the Socialist authorities.

The only good thing, I suppose, is that thanks to the suffering inflicted on thousands of Brits (and Spaniards, French etc.) who bought a few years ago, we can say that one can safely trod through the Spanish property-legality minefield because all explosive artifacts have been identified and defused.

There still seem to be doubts in respect of the bona fide buyer, or good-faith-third-party buyer that buys a property, and the license of subsequently declared illegal. Well, according to the Spanish Supreme Court, in a recent ruling (December 2010) that quotes similar resolutions, anyone buying a property that has its original license revoked, is not protected by the reliance placed on the records of the land registry.

The reason is, according to the Magistrates, that the protection dispensed by the registry is only applicable to rights acquired in good faith and with good title, even if the previous one is declared void, and it is not therefore applicable to vices or defects appertaining to the object being transferred, so that if a license has to be declared null and void by application of the laws, then the new buyer “subrogates” the position of the prior owner and will be obliged to sustain the consequence the law envisages (and we all think about demolition here). Luckily though, most real estate professionals now know full well what is kosher and is meant to stay like that, or being legal could be potentially declared illegal (rural properties, mostly).

And so, what is the recourse for anyone caught up in the above situation then? The Supreme Court leaves the door open to file an action requesting compensation, from the Spanish State, if it was proved that the owner was a victim of a defective application of administrative decisions (typically, the grant of a license declared illegal later).

And what about the missing bank guarantees on failed developments? This is probably the hottest of topics (or potatoes), alongside the stupid retrospective coastal laws approved by our Socialist Business-Killer Government (soon to be ousted, thank God!). In relation to this topic, I have to admit that, even though I do not agree with some of Keith Rule’s antics, particularly the blind endorsement of a particular law firm, he has demonstrated that there is substance behind his proposal.

Antonio Flores Property bank guarantees

Acting on behalf of over 160 claimants (of a total of 290), Lawbird, in conjunction with the Prosecutor and other accusing lawyers, has secured prison sentences for 10 individuals acussed of masterminding the largest timeshare resale scam ever to hit the Costa del Sol. A further 8 are on the run and a ninth passed away.

The agreement was almost inevitable given the particulars of a complex case that, lasting more than 10 years, would have been downplayed due to the mitigating effect of the abnormal judicial delay in administering justice. In the end, all of the accused individuals have agreed to prison sentences that, due to an pre-agreed reduction (under 2 years) , will not see them spend time as an Alhaurin prison immate for illicit association and swindle by theft.

W. Prinsloo, a man of frail appearance deemed the gang´s ideological beacon, was absent due to having died some years earlier. He had also been accused possessing an unlicensed gun, a .22 rimfire pistol, that would have made him not eligible for a suspended sentence. Being familiar with handguns as a licensed owner (I too have a .22, and a 9 mm., plus a .357), we have better places to store them rather than, well, in his “office” desk drawer, as Prinsloo did…

The ruling also obliges the convicted conmen to repay over half a million Euros, as civil liability compensation, within a period of 2 years.

And what about Argentinian conman Fabian Marcelo Ramirez, a man who is still cold-calling hundreds in spite of having being arrested 4 times? I do hope that he now sees that his moment is coming.

Documents

• 2011-05 – Timeshare Resale Scam Case Sentence (PDF – 2 Mbytes)

Antonio Flores Litigation, Property, Scams courts, malaga, muldoon, prinsloo, Ramirez and Ramirez Asesores, scam, timeshare

Convicted conman John Doust was right in one thing, when reflecting on the reasons why he had become exposed as one of the longest-serving crooks around: “internet is a terrible thing”. It definetely proved awful to him, to the point that even a  relative of his found out about his latest scam via the cyberspace!

For Nykredit and Sydbank, Internet can administer the coup de grace for equity release contracts, signed with otherwise happy British unencumbered property owners, that invariably failed to achieve what was intended from them, leaving the supposedly happy beneficiaries in dire financial ruin.

It is not known how many people actually signed with them but what is clear is that Nykredit and Sydbank, in the process of recruiting their clients and getting them to sign up for their losing financial product, broke every existing law, regulation, norm, code of conduct, you name it. So since my previous post was boring enough with all the laws that these guys infringed, I will just outline 2 decisive aspects of their actions that would define their activities:

• They arrived in Spain through the back door: if the first stop for any entity or person who wishes to legally and properly advise on financial products or services in Spain is the CNMV (Spanish regulator), then the duet Nykredit/Sydbank must have swam in from Mediterranean to reach the Costa del Sol, or perhaps used the vehicle of the photo. If you go to the CNMV website you will not find trace of any of the two Danish banks…

• They arrived in Spain through the back door and actually knew they were doing so. You see, the WayBackMachine.org site tells us that back in 2007, Nykredit was selling equity release in Spain but were aware that they could not do so, and to warn people they actually posted a warning on their website that read:

“Please note that due to legal barriers, we currently only offer mortgage loans in France and Spain to Scandinavian retail customers.”

Because once you get into the habit of breaking the laws and other inconvenient regulations implemented by a different country , you end up doing the same with self-imposed prohibitions like the one above. Nykredit and Sydbank were just never allowed/authorised/cleared/legally entitled offer or sell equity release programmes to anyone in Spain, whether Scandis or not.

Shortly after realizing  how wrong they were, they removed the equity release page…

And my clients, all over 60, British, and retired, have had to rent their property, start working (a lady in particular is now cleaning other people’s homes) and suffer untold levels of stress since having the misfortune of crossing paths with the chap on the picture…

Antonio Flores Litigation, Mortgages, Property, Scams equi, equity release, Nykredit, Sydbank

The clients thought they’d be soon grinning from ear to ear once their application was approved, but the lenders knew that this ability to grin could be quickly challenged by grimace…

The equity release fiasco threatens to not only leave hundreds of deceived investors destitute, but also physically eliminate a few after enduring years of unbearable stress when faced with a prospect of financial ruin when retirement has been reached.

“I should have known better” is the statement I come across the most, and I fully agree but let me qualify this statement to add that yes, but when are told the truth and not lied to in such a vile manner as the Rothschild, Danske Bank, Sydbank/Nykredit, Landsbanki, Jyske etc., assisted by their cronies, did to pensioners, mostly from the United Kingdom. Interestingly, all these banks were paying commissions to unregistered and unregulated pseudo-financial professionals to bring in the punters on to the dock…

But enough of this now, let’s get with the positive side, because recent Supreme Court case law in Spain seems can make these contracts not worth the paper they are written on, and consequently, courts of first instance are now ruling in favour of consumers of financial products that were not only ill-advised, but also, ill-chosen, given that these products could have never been suitable for them due to their profile.

The case in particular refers to, again, hundreds of investors who signed what they thought were safe deposit contracts, and ended up losing almost all the capital. It was won by the creditors in the first instance, appealed by Caja Rural but thrown out and finally went to the Supreme Court, who could not be more in agreement with their subordinate peers. The latter ruling consists of 45 pages that I will try to condense, as it mainly refers to a number of legal arguments of difficult rebuttal. The excerpt below can accurately summarize, in a nutshell, what happened:

This product was sold and contracted in an indiscriminate manner by the branch offices of Caja Rural in the Valencia area, by the branch manager directly and without explaining the client the particulars of the product, inasmuch as it was not a typical fixed deposit but something different where they could lose part or all of the capital, especially considering that they were pensioners, agriculture-based workers, builders, etc. with a conservative mentality, averse to assuming risks and that had never invested in sophisticated financial products. Also, most of the customers would have not read the contracts as they would trust what was told to them, aloof of any damaging potential consequence but also, unable to discern the risk associated with this investment as the contract was not possible to understand unless they were financial-savvy.

The Supreme Court articulates the ruling on the basis of parameters that were breached by the bank:

1. Parameters based on financial services’ applicable legislation, which is deemed to have been breached.
2. Parameters based on civil and consumer protection laws, in particular, in respect of lack of consent of the client due to error, impregnated with negligence, during the formation of the contract, and breaches of consumer protections legislation referring to clarity, transparency and simplicity of contracts.

Although not part of this court ruling nor mentioned in it, and to get it out of the way, I confirm that all references are made to applicable Spanish law, and not Luxembourg, Swiss, Icelandic or any other convenience laws, as these banks were pretending to, according to article 90 of the Consumer Protection and other Complementary Laws Act 1/2007, which stipulates that any of the following will be deemed null and void:

1. Submission to Courts or Judges different to that of the address of the consumer, the place where the obligation is to be carried out or where the property is located.
2. Submission of the contract to a foreign law in relation to where the consumer undertakes to contract or where the business carries out its activity directed to promoting contracts of equal or similar nature.

The applicable law objection is easily dumped by on wayside, but requires explanation to avoid it being used to interfere in the more important nullity of the whole contract. By the way, all the above banks are susceptible of being fined for inserting clauses declared abusive, and consequently, null and void.

Theory of the “Customer Profile” or “Client Profile”

Considering that most of these contracts were signed prior to the 21st of November 2007, when the Mifid Directive was introduced in Spain, the Courts were guided by the Ley del Mercado de Valores y Código General de Conducta de los Mercados de Valores, which is the Stock Exchange Act and General Code of Conduct of the Financial Markets, in respect of the information to be supplied to consumers, and Royal Decree 629/1993 in respect to norms of conduct in the financial markets and obligatory registries.

The above legislation has developed what is known as the theory of the customer, or client profile. Article 79 of the Stock Exchange Act stipulated, prior to further amendments (this article was amended 3 times), among other points, that credit entities that act in the financial markets will have to observe the following principles and requirements:

1. Behave diligently and transparency in the interest of their clients and in the defense of the integrity of the market.
2. Develop an ordered and prudent administration, looking after the interests of the clients as it they were their own
3. Ensure that the clients had all the required information.

Act 47/2007 introduced article 78, differentiating between a “retail” client, as opposed to a “professional” client:

[..] including other banks or financial entities, or those of whom experience, knowledge or qualifications in the financial markets is presumed, to the extent of being able to undertake to make their own decisions over financial products and value their risks correctly. Business people will be deemed professional clients provided they have assets of at least 20m euros, of their annual return is over 40m (hardly a pensioner). Any client may request that he is considered a professional client, but the acceptance of this application will be made subject to the company assessment over the experience and knowledge of the client in relation to the operations or services he requests, ensuring that he is able to make his own decisions and can value the risks correctly.

When carrying out the assessment as above, the financial service provider will have to ensure that at least 2 of the following are met:

1. That the client has transacted a significant volume of operations in the financial markets, with a frequency (average) or at least 10 per quarter during the last 4 quarters.
2. That the sums invested exceed €500,000
3. That the client has held a professional job, for at least 1 year, in the financial sector that would require knowledge of the operations or services granted.

Any other client that does not come under the above will be deemed a retail client.

Realistically, how the hell were the “equity release” providers meant to have applied the above complex legislation if the agents used by them were not qualified in the European Union to provide this advice, were not regulated in Spain to provide this advice, and had little, or not knowledge, of Spanish language, without mentioning that, as a result of these grave, could have never understood the extent of these protection laws?

Furthermore, Annex to Royal Decree 629/1993 stipulates that all operators in the financial services markets must act, when exercising their activities, with impartiality and without placing their interest before those of their clients. Article 4 and 5 of this annex are particularly important, when construing the doctrine or theory of the investor profile:

Article 4:

The entities will request from their clients the necessary information for its correct identification, as well as information on its financial situation, financial experience, investment experience and objectives of the investment when the latter is relevant for the services that are to be provided.

Article 5:

1. The entities will offer and provide to their clients any information they have that may be relevant to adopting investment decisions, and will dedicate time and attention to ensure that the best product or service is obtained, in relation to the objectives pursued.
2. The entities shall have available any information systems updated so that the relevant information is provided correctly.
3. The information provided to the clients must be clear, correct, precise, sufficient and delivered on time to avoid an incorrect interpretation, stressing the risks undertaken on each operation, in particular high risk financial products, so that the client is in knowledge of the precise effects the operation entails. Any prediction must be correctly justified and expanded with the necessary explanations to avoid misunderstandings.

And so we reach article 7, that clearly stipulates a prohibition openly flaunted, still today, by entities, in particular Rothschild:

1. Entities will refuse any operation from non-authorized intermediaries, as well as those in which they have knowledge that the relevant legislation applicable to the former may be infringed.

Antonio Flores Litigation, Property, Scams Caja Rural, Danske Bank, equity release, Jyske Bank, Landsbanki, Rothschild, Sydbank/Nykredit

I make no disguise that, professionally, I am closely connected to property, therefore this post, to many, will have limited significance due to obvious bias. If I was however to collate my experiences over the years, good and bad, when dealing in real estate in Spain, and I compare them with how transactions are conducted these days, I would necessarily conclude that it is now safer than ever to invest in property in Spain.

The crisis has operated like an unstoppable tsunami that has swept right across the property market, sucking in its wake dodgy agents, opportunistic developers, corrupt town hall officials, crooked mortgage brokers (like the one that conned Banesto out of a few millions) and a handful of funny lawyers. And with them, a myriad of very questionable anti-property purchaser practices that had dangerously became close to standard, in spite of almost everyone living, directly or indirectly, on these bona fide consumers or investors. It may be convenient to enumerate these unethical antics, by trades, to keep things in perspective.

We must remember that:

1. Never again should anyone pay any monies to a developer unless a bank guarantee or an insurance policy is available…, obvious isn’t it? More the point is that, realistically, insurance companies will never touch advance off-plan property payments and banks are likely to request unthinkable amounts of collateral. The immediate consequence of this is that only the very cash-strong will be able to develop and this is just good news.
2. Never again should anyone pay monies to a developer who:
   
   1. Does not own the land (Citrus Europe Ltd.)
   2. Does not have a building license (Aifos)
   3. Cannot give bank guarantees (not enough space in this post to name them),
   4. Uses the deposits for a Murcia development to run a complex in Venezuela (Proyectos Antele S.L.)
   5. Uses a bent-as-hell agent as a deposit-collector who then ends up keeping them (Grupo Mirador and Palmera Properties/Gotardo)
   6. Runs away with the portion of the purchase price, earmarked for cancelling the loan on your property, to Germany (Abacon Delta S.L.)
   7. Sells a half built complex to a third party and does not refund (Citrus Playa Macenas S.L. and Ready2Invest )
   8. Takes 60 deposits for an Almeria development to a UK company and then dissolves it (again, Citrus Europe Ltd.)
   9. Or all of those together plus sets up a Ponzi scheme, is known to have never built one property in his entire life in spite of claiming, at a fastouos ceremony, to have erected no less than 6,000 in the Costal del Sol, even persuading gullible Prince Albert to believe such bullshit!  (Sun Golf Desarrollo Inmobiliario S.A. or Mr. Ricardo Miranda Miret).
3. Never again will developers bully buyers as they were used to doing, as for example La Reserva de Marbella S.A. were experts at. I always wondered why was it that when you bought an apartment for €200,000 you were almost expecting to be treated like s**t, but if you went for a meal you were the king if you tipped handsomely…
4. Never again will developers make you sign a private purchase contract for 70% of its real price, the balance of 30% to be paid to a Switzerland account, in advance, undocumented and, of course, never to be reflected on the private purchase sale deeds…(any ideas?? )
5. Very unlikely (never say never) will a Socialist/Communist Government, regional or otherwise, allow licenses to be granted on thousands of properties only to later, due to political opportunism and a spate of much publicized corrupt Town Hall officials arrests (which I agree with but without the cameras), instigate the revocation of almost all of these licenses, promote demolitions, warn of impending heavy fines on everyone, including the bona fide owners and, in sum, scare the hell out of thousands of those owners plus an undetermined number of potential investors in Spain.

With all we know now in respect of the degrees of criminality so many property developers ran into, an off-plan property industry that is almost non-existent (good old Taylor-Wimpey seems the only one around) and the property-associated corruption almost disappearing, the very few developers that are still around will no doubt jump through hoops to ensure that only la creme de la creme will be sold, at the right price of course!

Antonio Flores Litigation, Property, Scams Abacon Delta S.L., Aifos, Citrus Europe Ltd, Citrus Playa Macenas S.L., Grupo Mirador, Jesus Gotardo, La Reserva de Marbella S.A., Palmera Properties, Proyectos Antele S.L., Ready2Invest, Ricardo Miranda Miret, Sungolf Desarrollo Inmobiliario S.A, Taylor-Wimpey

The SunGolf and Ocean View Property scandal has now hit the headlines, just where it should have been long time ago. But whether this is portrayed as a struggle between two powerful property developing lobbies fighting to control the Dominican turf (Ricardo Miranda on the one side and Sanchez & Lietor on the other), as some wish to put it, the reality is that still over 120 British and Irish property investors are out of pocket through no fault of their own, and no one takes one bit of responsibility.

Mr. Miranda accuses me of perverting the truth in pursuit of media relevance and yet, he does not address the questions raised many times over.

Mr. Miranda accuses me of perverting the truth in pursuit of media relevance and yet, he does not address the questions raised many times over.

It is my understanding that both the President of the Dominican Republic and Monaco Prince Albert, lending their presence to endorse a ghost development, should be held responsible for losses sustained by investors who, having relied on their international prestige when choosing to invest in Punta Perla, are now out of pocket. Their irresponsibility when carrying out appropriate due diligence on the records of Mr. Miranda who, as been published, claimed to have successfully built thousands of properties on the Costa Del Sol (which is false), has to be attributable to a mix of poor advice and, perhaps, succulent incentives.

Some headlines

• Dominican President, Monaco Prince named in Spain “macrofraud” case - 18 February 2011 – Dominican Today
• Northern Ireland home buyers sue British real estate agents for Estepona fraud – 17 February 2011 – Typically Spanish

• Británicos afectados por una macroestafa inmobiliaria presentan una querella – 17 February 2011 – El Mundo
• Un centenar de familias británicas denuncian a un promotor por una supuesta estafa inmobiliaria – 17 February 2011 – Diario Sur
• Casi cien familias extranjeras se querellan contra una promotora marbellí por una estafa de 4,5 millones - 17 February 2011 – Europa Press
• Palacio niega tribunal España citara a  Leonel como testigo  litis – 17 February 2011 – El Nacional (Dominican Republic)
• Ricardo Miranda dice acusación busca crear escándalo mediático – 17 February 2011 – Diario Digital (Dominican Republic)
• Unos 70 extranjeros acusan a un promotor de estafa en Estepona - 18 February 2011 – La opinion de Malaga
• Un juez investiga una estafa masiva a británicos en la Costa del Sol - 18 February 2011 -El Pais

Antonio Flores Litigation, Property, Scams Estepona Beach and Country Club, Ocean View Properties, OVP, Punta Perla, Ricardo Miranda Miret, Sungolf Desarrollo Inmobiliario S.A