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Madrid crackdown on dodgy Spanish property charges

14th September 2005 | back to article listings BACK    print this article PRINT

The regional authority of Madrid is considering tough new measures that will clamp down on notoriously opaque Spanish property contracts and the unregulated Spanish mortgage market. The steps are part of a bundle of consumer protection measures that will also tackle utility and parking companies who regularly round up utility bills and overcharge customers.

"With this law we want to put an end those interminable questions which you have to go through when a simple call should be enough if you want to sign up to a contract and finish with the abuses in which the buyer of a house pays for services which should be paid for by the seller, " deputy prime minister Maria Teresa Fernandez de la Vega told EFE.

The new rules, which will include potential prison sentences for companies and individuals found to have violated them, will attempt to put an end to the idiosyncrasies which can plague property investment in Spain, such as upping the sale price if the buyer refuses to take a mortgage with the bank used by the seller or constructor.

Other ruses, such as charging to have jet to let investment property attached to the mains water, sewage and gas after the sale had apparently been completed are all too common, especially when the buyer has, at best, a shaky grasp of Spanish. Often developers will receive 'incentives' from their bank to encourage buyers to take out a mortgage with them.

Other real estate companies take the simple measure of opening their own mortgage brokerages. "When I set up this company I did many months of research and was pretty shocked at a) the relatively infancy of the concept of mortgage brokers in Spain and b) the bad practice that was going on," John Murphy, director of Spanish Mortgages Direct told New Sky News.

While Madrid property buyers may soon have some protection from the cowboys of the Sierra Nevada, property investors elsewhere in Spain are recommended to use large and reputable brokerages for the time being.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/2203.html. Alternatively, please see our full press release archive.

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