Antonio Flores’ Blog

If you thought a team of lawyers would resemble the above, you were mistaken!

When instructing a lawyer to defend a matter one has to identify a number of qualities within which we should highlight decency, professionalism, independency, honour, etc. The Consejo General de la Abogacia Española (Bar Association) establishes that not only these but a rather larger number of other obligations have to be met by the professional in charge of the matter before he undertakes to carry out the assignment.

As a lawyer I have to admit to a rather lack of conformity of lawyers’ modes and behaviours with the spirit of this legislative document which is also there to protect them. Invariably, age and experience (and of course financial success) makes some of us feel of an irritating superior kind which at times can be seen as patronizing by the layman, clearly a mistaken attitude if we want to be, ultimately, respected.

Fortunately younger generations are fully abiding, to the syllabus, with the obligations set forth by the “Estatuto General de la Abogacia”, which is the manual or rule book of the Spanish Bar Association, and one lawyer in particular, codenamed Panchito, has appreciatively condescended to our intellectual level in order to be fully understood.

Panchito, member of the Costaluz Lawyers Team, and who has distinguished himself with fully taking onboard every recommendation and obligation the lawyers’ bible sets forth, including that of appearing in Court with a full suit, tie, black shoes, white shirt and a robe, and at choice, a cap or beret (although looking at the suspect’s photograph I would propose to his honour that a wig is accepted), is setting the standards of the legal profession in Spain.

On a recent speech given by Panchito about Spanish Consumer Law, his field of expertise, at the Spanish Consumers Association annual convention, we were astounded by the force of his words: his clear, concise, jargon-free intervention is to be remembered in coming years. One will say that it is a triumph of speechwriting in this mind-numbing issue.

If you wish to contact Panchito you may do so by visiting this link. I swear you’ll not be disappointed with the services rendered just as Real Madrid is not regretting for one minute having hired Cristiano Ronaldo.

aflores Uncategorized costaluz lawyers

Over the years I have been working as a lawyer I have often had to listen to harsh criticism, from our clients, of the Spanish legal system. This, although understandable, was almost always accompanied by the phrase “this would not happen in the UK” which left me intrigued as to the virtues of a legal system which I am aware protects far more consumers than companies.

Last week I was confronted by a client (possibly soon to be ex after listening to a popular ambulance-chasing solicitor operating from a popular expat website) who had a good go at us for what she thought was a deficient protection of her interests. The matter in question involved UK clients who had bought at a development called Cortijo del Mar, being built by Grupo Labaro (which went into voluntary receivership) and subsequently bought by FM Consulting.

All the ingredients of a legal nightmare were put in place: a significant deposit paid, a developer which went bust, the 2008 property crash and presumably the loss of regular income of the investors. Significantly, the new developers FM Consulting bought the development (in cash so I’ve heard) and progressed with the construction, advising clients that some delay would be expected but nonetheless the properties would be finished. All the while, the investor’s money had been guaranteed by a bank guarantee.

Yesterday I was reading the Times Online and came across an article about investors who stood to lose hundreds of thousands of Euros to a developer that went bust, here we go, I thought! According to the article, Dylan Harvey Residential Ltd (DHR), part of the Dylan Harvey Group, had gone into administration two weeks ago with debts of £100 million. I then read that “the investors’ case against the group has been building for more than a year, as angry depositors tried and failed to get their money back on the projects that had still not been started. Many who asked for a full refund were invited to transfer their deposits to another project.”  Inmediately the comment “this would not happen in the UK” came to mind although in a reverse manner: bank guarantees would never happen in the UK and that is why these investors are out of pocket! In Spain, most developers had given bank guarantees so investor options had the backing of, in principle, solid banks and insurance companies.

Going back to our clients, I advised them that it was not us who found a development for them, it was not us urged them to invest and it was certainly not us who went bust. Now that the developer has resumed construction they are eager to pull out as the property may not be worth the original price they agreed to buy it at. It does seem that although a contract protects their position, a bank guarantee protects their investment and the Courts their interest we are to blame for everything which has happened and this view is unfortunately shared by a couple of self-proclaimed “bank guarantee” experts and I-will-tell-you-what-you-wish-to-listen legal advisors.

aflores Uncategorized ambulance chasers, Cortijo del Mar, FM Consulting, Grupo Labaro

Yesterday morning saw the arrest of the mayor of Alcaucin, his 2 daughters and several other persons in connection to an alleged corruption case involving illegal constructions. The arrest took place a few days prior to the regional elections in the Basque country and Galicia and although the main suspect is of Socialist affiliation it does seem that the Government may have wanted to set an example within their own ranks and play down the accusations of bias for previous police actions against municipalities governed by non-socialist parties (in Marbella, Alhaurin and in Madrid just recently). 

It appears that some some 4 developments and an undetermined number of houses are in the epicenter of the investigations for having obtained planning permission ilegally although no confirmation has yet been released.  

What is surprising is that the Junta de Andalucia did not take action before as they did in other villages and pueblos in respect of ´abnormal´ licenses (Coin, Mijas, Gaucin), following normal legal administrative channels, but rather preferred that the Guardia Civil proceeded to mount an anti-terrorist operation very much geared for public consumption.

aflores Uncategorized

The weakness of the pound is already affecting thousands of property owners with an Euro mortgage, and according to many it would not seem that the English currency will revive in the short run. As we worry about the adverse effect of the exchange rate, some banks are already making predictions in respect of where the pound will be in June 2009, and you would be surprised that they are mostly well away from the terrifying “parity” word.

The chart below has been taken directly from the Sunday Times (Money supplement):

Even if the worst forecaster got it right, the Euribor applied by the banks (higher than the Euro current interest rate) is now at 3.025%, and there is almost unanimity in that they should be in the region of 2% by mid next year, which would mean that mortgages would cost up to 34% less than at the highest Euribor mark (5.5%), at the beginning of October 2008, comfortably making up for the depreciation of the British currency.

Expats and pensioners living on a fixed income paid out in sterling may have lost in real terms approximately 30% of their purchasing power in the eurozone. This is certainly a problem for many thousands of people but is already being tackled successfully by many by either buying in Gibraltar, a good option for Costa del Sol residents, or buying by internet in the UK, for certain products.

And for many who have decided to sell, the benefits are clear: if they managed to buy at a time when the sterling was trading at 1.5 times to the euro and can sell when a euro buys you 1.08 pounds, they are getting a good deal. In this respect many private purchase contract holders who have pulled out of their contracts due to contractual default by the developer are getting, in some instances, 40% more pounds than those they invested.

Finally, anyone deciding to buy one of many bargains which can now be found will necessarily need to take out a Euro mortgage to cover as much as possible of the purchase price so that the immediate exposure to currency risk is limited to the deposit (for example, a typical 70% mortgage). Of course, the euro mortgage repayments will still have to be funded from sterling sources, but at least the exposure to the unfavourable exchange rate is minimal and staggered over a considerable time. And when the pound/euro exchange rate returns to normal values, your mortgage capital in euros will still be the same, but in pounds it will have shrunk to 70-80% of the original amount.

If you live in the UK and have a property in Spain, and you are struggling to pay the mortgage, I would advise that you rent the property out, even if it’s below market rental value. You will be receiving the rent in euros which will cover a large amount of the monthly mortgage repayment. If you are worried about non-paying tenants, you must note that the goverment is enacting new laws which will allow evictions to be performed in a very short period of time.

aflores Uncategorized

At last the Government has pre-approved a law proposal (PDF-Spanish) to encourage property owners to rent out their properties. Even though property sales have slowed down substantially, the property rental market is not increasing, and a staggering 2.8 million properties in Spain remain empty. 

The proposed changes will mainly target the excessive length of proceedings (which in some instances can take up to 12 months) to enforce an eviction process. Below is a summary of the main law changes to be approved in due course:

• Notice of payment prior to going to Court is reduced from 2 months to 1.
• The Court proceedings are now conducted via an equivalent to a small claims court procedure and are therefore a ruling can be reached in a couple of months (depending on the specific Court).
• The Court ruling will now be enough to evict a tenant and will be enforced within 30 days, without having to execute the ruling (whereas before the ruling was not automatically enforceable as the landlord had to instigate this action). If the tenant cannot be found the ruling will be notified in the notice board which each Court has and will proceed to send the bailiffs.
• Landlords will be able to demand return of the property if they need it not only for their own use but for that of parents and children. This clause will have to be inserted into the contract in order to be enforceable.

It will be interesting to see how these measures, in addition to others, bring dynamism to an otherwise stagnant market and, more importantly, if the court system will be able to cope with the expectations these changes will introduce.

aflores Uncategorized rental contracts in spain, rental spain, spanish rental contracts, spanish rentals, spanish tenancy agreement

The tragic Barajas accident has brought about a singular controversy, never heard before in this part of Europe (or at least Spain). Spanish newspapers started it all off and the Spanish Law Society has now taken an interest in the matter. I am referring to the so called “ambulance chasers“, a funny and graphic term given to lawyers who hurry to disaster sites to solicit business from the injured or the relatives of those who have died.

The Spanish Law Society is now studying whether to take disciplinary actions against Spanish law firms who have hooked up with their American counterparts in a quest to attract as much of the personal injury legal compensation business as possible, almost right at the scene of the accident. Also, the Dean of the Las Palmas Law Society has affirmed that that some Spanish law firms are in clear breach of the Law Society Rules and Statutes in respect of legal business solicitation (articles 7. and 8.) and has equally recommended exemplary disciplinary action.

Aggressive solicitation of legal work  is not uncommon in Spain and temptations arise when those targeted are foreigners caught up in nightmarish legal wrangles, for example when buying property. I suppose it is not always possible to differentiate what is ethical from unscrupulous but the above case seems a clear example of someone wanting to profit from someone else’s misfortune. Too bad for those Spanish firms!

aflores Uncategorized ambulance chasers, spanair accident, spanish lawyers

Yesterday I was filmed by the Inside Out crew (BBC Northwest) in our offices in connection to the difficulties encountered by the family of Gary Dunne in the repatriation of his body back to the UK. Gary was stabbed to death by a machete-wielding gang in a resort near Torremolinos on the Costa Del Sol in March 2006 and his family have been fighting ever since to have his body repatriated to Liverpool, his home town.

Unfortunately Spanish law is strict with the repatriation of human remains as it will only allow a body to be transported outside the country if it has been previously embalmed (within 48 hours from death) or cremated, or 5 years have passed since the death in any event (in which case it is considered not to pose a sanitary hazard).

The trial is to take place this coming week and full cover is being given by the BBC Northwest in the above programme Inside Out. You obtain more information on the Dunne family ordeal by going to their blog, and can also contribute with a donation at any HSBC bank to the GARY DUNNE FUND.

We would like to offer our full support to the family and demand that justice is rightly served.

The programme is to be aired on the 24th of September on the BBC Northwest channel.

aflores Uncategorized

It may sound strange but it is true. Among the new changes Spanish driving laws have implemented is the point system, which would only apply to Spanish driving license holders. So whilst the latter driver can lose his license if he is caught twice doing 151 km/h in a motorway, for example (he/she would lose 6 points every time, plus a fine), a foreign license driver will not be affected and even if the infringement consists in driving over 110 km/h in urban roads, 180 km/h in normal roads or 200 km/h in motorways, for example, where the law envisages the suspension of the drivers license for up to 4 years, drivers with foreign license still remain unaffected, since the traffic authorities are not connected with other countries (which may not even have the point system).

However, beware of committing certain offenses: prisons terms are applicable regardless of the nationality or license of the driver for exceeding the above speed limits as well as drink-driving (where it is not possible to refuse to be ´breathalised´). 

aflores Uncategorized driving laws in Spain