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Unregistered
07-15-2010, 08:35 PM
we had agreed the sale of a house but the owner has had to withdraw from the sale because he is being sued - and his own lawyer has told him it would be a criminal offence for him to sell the house. The owner is british, but spanish resident, paying taxes etc here in spain.

the civil case against him is nothing to do with the house we want to purchase, everything would be declared legally etc. and we would be arranging our mortgage with the existing mortgage holder.

the house owner can no longer cover his mortgage payments and is desperate to sell - but his lawyer has warned it may take 2-3 years to be resolved in the andalucian courts.

1) is there anything that can be done to allow the sale.
2) if he lets the bank take back the house (dacion en pago) can we buy it directly from the bank, or will it have to go to public auction? we are not the only party interested in buying the house.

mulberry
07-16-2010, 09:57 PM
hi, I'm registered now.
Just wanted to add to this question I posted the other day.
If we agreed a rent-to-buy option with the owner, if the eventual court case went against him, how would that effect our contract to buy the house. this house is not in habitable condition, so we would have to start putting money into it in order to live there.

Lawbird Lawyer
07-26-2010, 01:10 PM
Dear Sir or Madam

Addressing your legal queries:

1) is there anything that can be done to allow the sale.

The vendor's lawyer has already made it clear that the sale cannot go through least him risking being Criminally prosecuted for it.

2) if he lets the bank take back the house (dacion en pago) can we buy it directly from the bank, or will it have to go to public auction? we are not the only party interested in buying the house.

Yes. Going through a Public Auction is unnecessary if the lender has taken over the property by way of a "daciĆ³n en pago". You can buy the property straight from the bank like any normal resale. More on this in a reply to a legal query:

What is the best way of buying a property directly from a bank? (http://belegal.com/forums/showthread.php?t=70)
John C.

3)If we agreed a rent-to-buy option with the owner, if the eventual court case went against him, how would that effect our contract to buy the house. this house is not in habitable condition, so we would have to start putting money into it in order to live there.



As explained in my article on rent-to-buy (http://belegal.com/articles/showArticle/spanish-lease-to-own-in-spain) your legal position would be compromised as he may not be able to sell on the property legally and you would have lost your money as if in a normal rental contract.

Lease-To-Own Purchase Or How To Profit From Spain's Market Downturn (http://belegal.com/articles/showArticle/spanish-lease-to-own-in-spain) - 05 Nov 2009

Shemelessly quoting an excerpt:




Potential Disadvantages

For the option holder:

•You are actually letting a property. You must ensure you will be able to meet the let on time otherwise you will be jeopardising the contract. Bear in mind the currency exchange rate fluctuation if you’re source of income comes from abroad i.e. sterling pounds or dollars against the euro.

•As it’s a let, the rent premium may be revised annually by your landlord in line with inflation. Spanish Tenancy Agreements are normally referred to the Consumer Price Index (IPC in Spanish).

•For very long-term options, exceeding normally 3 years, an additional deposit (option fee) may be requested by the landlord besides the normal 1 or 2 months’ deposit for letting out the property. This may not appeal to everyone of course but it is done as prove of a serious commitment on behalf of the potential buyer.

•The main disadvantage is that these contracts last typically 2-5 years and in the interim the landlord’s financial circumstances may change. i.e. if the property has a mortgage loan taken against it and the landlord defaults, it may lead to a repossession procedure. You would still have a right to let the property if it’s repossessed, as the lender must respect a long term tenant, albeit you may no longer have the option to exercise the purchase of the property in the same conditions as you agreed to initially. You would actually have to raise the funds now and pay off the outstanding mortgage on the property if you wish to buy it off from the bank. Not to mention that if you additionally paid an option fee you would likely forfeit it in the event of a foreclosure.

•Buyers prefer long-term options to build up equity and in the interim keep an eye on where the property market is heading. Short-term options appeal to vendors but on doing they will be reducing the pool of potential buyers as few buyers will be interested. It’s a tug of war on which a consensus, balancing both opposed interests, must be sought.


•Another problem is that you are committing yourself on a pre-agreed price that in a few years time, despite the hefty worded in discount, may still be above the current market price. Obviously it makes no sense to execute the option if you are buying a property above the current market value. It would then be a case of a lost opportunity really as at no time are you forced to buy the property but you will of course forfeit in full the paid rental (opportunity cost) over the years negating the main advantage of following this option.



Yours sincerely
Raymundo LarraĆ*n Nesbitt