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View Full Version : Don’t criticise the Junta’s actions, only the delay in implementing them.



Surveyor
04-05-2010, 12:31 PM
On reading through Forums on many Expat websites the feeling gained is how many negative, depressingly paranoid, 'victim' comments there are to positive action by the Juntas at last. Many more Spanish nationals than Brits have lost out. Think it through.

Most councillors and mayors of towns are from the local community, voted there by their family, friends and neighbours. It's the natural way. When there is an uncertain town plan (PGOU) or one created many years ago by someone from another neighbourhood or family, it's not going to be treated with much respect. Then one of the family is approached by a builder who is willing to give so much money for his land that the whole family will become independent, affording to send their children to college or university to better themselves instead of having to take a job as soon as they can leave school to give the family income. One problem, the land on the old plan isn't zoned for development. So the whole family gets together with the councillors and mayor and they say we'll take the money now and deal with the problems if and when they happen in the future.

The developer team is keen to proceed as they are employees and know that they will only have work if they find developments. In the past, the promoter on the one hand had banks pushing money at them for development and on the other buyers greedy to invest in the finished product before it was built, as they saw opportunities and didn't look to closely at the consequences.

But somebody, somewhere should have said, STOP, this is illegal and maybe they did. Perhaps a lawyer or a councillor who could foresee that it could end in tears. But they were swept aside in the rush for profit. It appeared to be a winner for all, in the short-term at least.

Time went by and things changed. The Junta noticed that the development was happening, was outwith their approved plan and put in action the slow legal progress to stop the development and penalise the local politicians for granting the permission. And the money for the development started to run out. The banks were pulling back with construction funds when the developer eventually had to admit that he hadn't sold enough of the property to independent buyers to cover the construction costs. The options he had given to his friends, directors, employees and even the individual bankers themselves were never going to be taken up. The greedy buyers were coming to their senses and realising that there wasn't a huge pool of other buyers out there desperate to buy from them at an inflated or indeed any price. And so the whole financial structure crashed, leaving the building skeleton unfinished and unloved.

Now the retribution begins. The speculator buyers haven't the money to complete their purchase or don't want to put good money after 'bad' and try by all means to pull out of the contract or just walk away from their deposit. The developer can't finish the development as he isn't getting the completion income he had depended upon. He has already spent the 'profit' on good living and another development site that is now nearly worthless, but still has to repay the huge loans he received from the bank. He finds that he has no support and only demands from his previously friendly banker and eventually has to tell all his suppliers and employees he can't go on, he can't pay them anything and the company is 'bust'. Eventually the bank takes back all the land and developments that were the security for the loans, which land they now 'find out' doesn't actually have any development permission and so they have nothing for all the money they have lent. They are in trouble, but if they can keep the original book values in their accounts for long enough, perhaps values will come back. But don't ask them for a mortgage or any loan of any kind because in reality they are as 'bust' as the developer before them.

And all the time the legal processes have been grinding on and now the final appeal decisions are coming out against the town hall. The councillors and mayor acted illegally by ignoring the PGOU and must be punished. They are fined and go to prison and are prevented from holding political posts for a few years. Their political party casts them out, ignoring the fact that they were the source of much of it's past income, declared and otherwise.

But the families of the village, the councillors and mayor are now wealthier, healthier and better housed and educated if they've been wise. Or owners of depreciating cars, boats and sclerosis of the liver and gout from all the rich living if they've been imprudent, with families unused to earning a living as the 'land money' has meant that they haven't had to. They'll only get up to no good as desperation and the desire to keep up their lifestyle sets in.

And the future. Well it can go two ways. We've seen all of this before in the late 1980's and early 90's. "Never again" it was said, but another generation came along and the opportunities were just too good to miss and anyway, the culture is to live for today and let tomorrow take care of itself.
OR
The laws that are already in place can be given teeth and enforced quickly. The lawyers and other professionals will develop a 'professional conscience', even if it's only because now 'big brother' is watching and will catch them before they can hide the gains. And the money laundering laws are sufficiently swift and wide to prevent most professionals advising or even getting involved in the fringes of clients doubtful schemes.

So don't criticise 'Stop Notices' or the like. They could have prevented the worst of it happening in the first place.


Campbell Ferguson FRICS
Survey Spain Network of Chartered Surveyors
surveyspain com