Zapatero: Fool Me Once, Shame on You; Fool me Twice, Shame on Me!
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.
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