Episode 26: Peter, International Property Lawyer from Judicare

6th August 2018
Podcast host

Guest

Peter Esders

Host

Beth Davison

Podcast location

Profession:

International Property Lawyer

Area of Expertise:

Spanish Law

Episode 26: Peter, International Property Lawyer from Judicare

Beth is joined by special guest Peter Esders from Judicare, who is an International Property Lawyer and shares his advice about the legalities of buying in Spain. Judicare is an international property law firm providing specialist global legal advice related to investments in property and land overseas. Tune in to find out how to best seek advice from a lawyer, the importance of identifying loopholes and hear some infamous case studies.

Show Notes

  • [1:09] How Spanish law differs from UK law
  • [2:45] The most common questions people ask about buying in Spain
  • [3:24] How true are the media ‘horror stories’?
  • [5:16] The importance of not underestimating the cost of buying abroad
  • [6:17] How to find a lawyer you trust
  • [8:00] What you need to know when buying property abroad
  • [12:05] Why people shouldn’t buy property abroad without a lawyer
  • [16:20] Peter’s takeaway message

 

Links:

Kyero.com

Judicare

 

Read Full Transcript

Intro

Welcome to Series 3 of the Kyero.com Spanish Property podcast where we interview people who recently bought their dream home in Spain.

They tell us what worked, what didn’t and what they’d do differently next time.

I’m Beth Davison and this week we have a special guest on the show. I’m speaking with Peter, a solicitor at Judicare, a firm which specializes in providing legal advice for aspects of overseas property. He’ll be telling us about some of the infamous stories where buyers just didn’t seek the advice of a solicitor.

Just wait until you hear about how a cliff-side property, with phenomenal views, may not have been the most perfect purchase on paper

Check out the show notes at kyero.com/podcast to find links and resources mentioned in this episode

Body of Transcript

Peter:  My name is Peter, I’m a solicitor at a firm called Judicare and I specialize in international legal issues mainly relating to overseas property in a whole range of different jurisdictions. But my personal specialization is Spanish law.

Beth:  I was going to say, does Spanish law differ widely from global law or European law? Is Spain a kind of law unto itself?

Peter:  Spanish law is very, very different from UK law. They work in completely different ways. They’re much more codified over there. But, there are actually quite a lot of similarities between Spanish law and some of the other European laws because they are all based, at some point, on Petionic Codes. So, for example, Spanish law is very similar to French, Portuguese and Italian. Although they’re very different from each other, you can see the very basis of how they work and some of the principles are very, very similar.

So as far as the law is concerned it’s probably easier to think of Spain as a mini version of the EU. You get the national governments introducing certain laws but then you get the autonomous regions within Spain being allowed to introduce those laws in certain ways, so some laws are enacted throughout the whole country, other ones are given a bit more free rein in terms of the autonomous regions.

For example, you get things like the rate of Inheritance Tax is slightly different in a lot of the different autonomous regions, as that’s one of the things they are allowed a bit more freedom on. You get things like the ability to rent out properties, on the islands for example it’s a lot more protected than on the mainland, so you do get variations from region to region.

Beth:  In Spain, you mentioned cancellations and things like that, are there any issues that, for you, are at the forefront of your mind as soon as you speak to someone who says, “I’m buying in Spain.” Are there things that come straight to mind as, “OK, watch out for this?”

Peter:  The main question that we get asked, at the moment, is all about legality of properties. We saw a number of years ago all the scare stories came out with regards to new developments and how people were losing their money in illegal planning permission and things like this. That seems to have hung around in people’s minds. So, when people start buying now we often get asked about that sort of issue, and that’s clearly at the forefront of people’s minds when they’re actually buying something that they’re naturally nervous about.

Beth:  How accurate were those horror stories because you always hear the worst ones in the news, but were they true, was there truth in it?

Peter:  I think you were absolutely right. I think there was quite a lot of bad reporting on those back in the day. Obviously, bad news makes the news whereas good news doesn’t. So, when someone buys a property and it all goes OK and they get a good title and all the rest of it, it doesn’t make the papers.

Whereas, with somebody who where it does wrong, it does. Of course, that’s the sort of thing that sticks in people’s minds. There was quite a lot of bad reporting on this. Clearly, there were some issues, but a lot of the issues weren’t quite as reported. A lot of them weren’t as bad as was made out.

Beth:  Fair enough, and there are individual case studies, which we’ve discussed, that really jumped out at me. I’ve got the man who paid a ten percent deposit in cash, but didn’t know what country he was buying in. Tell me about this, because this seems impossible to me.

Peter:  This is actually an ex partner of mine who dealt with that particular one. He had a client who came to him and said, “You know, I’m buying a property in Portugal. Could you have a look at the contract? I’ve already signed, it, I’ve already paid the deposit. I paid the deposit in cash as a ten percent deposit. Can you have a look at the contract because I’m signing the title deed tomorrow?”

He had a look at it and said, “Well actually the property you’re buying isn’t in Portugal it’s actually in Spain.” This guy was rich enough to take money out of the bank to pay a ten percent deposit in cash, but didn’t actually know what country he was buying in. Admittedly it was relatively on the border. But, it does show how people can get themselves into all sorts of trouble simply because they assume certain things.

Beth:  Do you think that assumption comes from wanting to cut corners, wanting to save a bit of money and not get the independent solicitors involved soon enough?

Peter:  One of the things that we tend to find is that people underestimate the costs of buying abroad. So, one of the major things that they should be looking at is how much is it going to cost them to buy in terms of legal fees, land directory fees, notary fees, taxes – the whole lot. Then work out their budget for buying and work their way backwards to how much they can afford to spend on the property rather than looking at their budget and thinking they can spend that on the property and then worry about everything else later. What I tend to find is that they underestimate how much it costs, and then they start cutting corners, and they start cutting corners on legal fees, valuation surveys, these sorts of things.

Beth:  So, of course, legal advice is imperative. That’s what we’re learning. Can you get the right and wrong type of advice? Are there certain lawyers, like you do, who specialize in Spanish law, but also European law, how does it work?

Peter:  I think there are several things. First of all you obviously need someone who understands what they’re doing. You can’t, generally speaking, just go down to your local High Street lawyer, in the UK, and ask them to help you buy property in Spain, or Italy, or wherever it is because they won’t have the first idea as to what they’re doing, generally speaking. If they try and do it they will probably get themselves into all sorts of trouble because the systems are very different. So, you definitely need someone who actually understands what they’re doing, whether that’s a specialist, like ourselves, or somebody local, on the ground.

The next thing, which is probably just as important, is that that lawyer is independent i.e. they’re acting for you and not for the seller, the developer, the agents, or whoever it is, just like you would do in the UK. So, when you’re buying a property in the UK you would always get your own independent lawyer to advise you on it. It’s exactly the same abroad.

Again, we see this time and time again, where people have used a lawyer. They think that they’re using someone independent, but they’re actually recommended by the agents or the developer, or whatever it is, and they’re acting, really, for them. I know one particular lawyer where all of his work comes from one particular developer. So, of course, he’s not going to annoy that developer because, certainly, he’ll get all his work cut off.

Beth:  Now you mentioned land registry and surveys and that kind of thing – everything that you would associate with buying in the UK. Is right of access, across land, is one thing that you’ve mentioned that I’d not thought about in the UK, certainly. Is this something that crops up a lot when buying abroad? I know there was a specific case involving a celebrity. Love a celebrity story.

Peter:  Yeah, yes absolutely. At the basic level what you’re doing, when you’re buying property abroad, is exactly the same as when you’re buying property over here. You need searches on the property. You need to make sure the seller actually owns it. You need contracts. You need to make sure that the property is all OK. You need to go through to registering the property and signing the title deed and all the rest of it.

So, those basic steps, it’s exactly the same as buying a property over here. Part of that includes things like surveys and valuations and all these sort of ancillary things. As part of searches on the property we do occasionally find rights of way over land, just like you do in the UK. For example, my mother has a right of way through her garden. There’s a pathway where rights affirm that the public can actually walk through her garden and she knew that when she bought it.

You can get the same thing when you buy property abroad. So, one I did recently where we actually identified that there was a right of way over the plot of land that the property stood on. The seller didn’t even know it existed, but it was actually registered, and unfortunately, because of the way it was registered, it wasn’t actually clear on where this right of way actually went, though we think it went through the garden and effectively through a wall in the garden, which meant it was a fairly old right of way and that it was unlikely to be used. But, in theory, because it was a public right of way, in theory people could come along and say, “Actually, we’ve got a right to walk on here, so take that wall down and I’m going to walk through your garden.”

So these things do crop up every so often. As you mentioned, I had another case where we were acting for a drummer in a fairly famous band. We identified that there was a right of way through his garden. This was a purchase is Spain. For somebody like that it’s even more important because the chap that I was telling you about before, they put an insurance policy in place so that if the right of way starts getting used it gets him some sort of compensation for it. But, someone famous buying a property, with a right of way, the last thing that they want is suddenly the paparazzi doing a search on it and finding that they can actually walk within a couple of meters within his back window.

Beth:  Totally, that would be slightly disastrous. It’s never something that you think of unless you’re a famous drummer.

Peter:  It’s something you need to think about anyway. It’s all privacy and you think you’re buying a private plot of land with your own garden and things and then you might find that someone has a right to walk through it. So, all these sorts of things need to be researched when you’re buying.

Beth:  Absolutely, and something else that cropped up on a survey was something that you wouldn’t have realized was the house that you had mentioned, with a beautiful view across a valley, unhindered, but perhaps not for a great reason.

Peter:  Well, absolutely, so we had a client who was buying a property in Italy, many years ago, and they were waxing lyrical over their property and it had beautiful views over the valley, uninterrupted, no one could build in front of them because of the way the valley was and so forth. We recommended that they take out a survey.

They were a bit doubtful whether they should take out a survey because most people don’t take out surveys when you buy property abroad. But, we said it was recommended you get the survey, so they listened to us and went and took out the survey. The survey effectively came back and said, yes, the reason why you’ve got uninterrupted views over the valley is because the house that used to be in front of you is now at the bottom of the valley and you’re house is next. So, understandably, he didn’t buy that one. It does show that a very quick survey may cost you a bit of money to do that but actually saved him an absolute fortune in buying something that could have been disastrous.

Beth:  Of course, you would never think to do that in the UK. So, it’s interesting that people will try and cut corners abroad.

Peter:  The number one problem is that people aren’t using lawyers in the first place. It may surprise you that, as a lawyer, one of the most common questions that we get asked is, “Do I need a lawyer when I’m buying a property abroad?” My stock answer to them is always the same, it is, “Would you buy property in the UK without using a lawyer?” And they say, “No.” And then I say, “Well, why on earth would you think of buying a property in a country where you’ve never bought property before. Where you don’t know the legal system and you probably can’t speak the language without using a lawyer?”

I think part of the reason for that is that they don’t know where to go. They are told that it’s all very easy and in Europe they tend to use the notarial system. So, a lot of people will tell them that they don’t need a lawyer; they only need a notary, whereas, in fact, that’s not true because the notary gets involved right at the end. He doesn’t advise on contracts and all the rest of it, generally speaking. So, it’s a very different system. But, that does allow unscrupulous sellers and agents to try and persuade people that they don’t need a lawyer and they only need a notary.

Beth:  Well you get into holiday mode, I suppose, a little bit.

Peter:  It’s exactly that, absolutely. They forget that actually what you’re doing is exactly the same as when you’re buying a property back in the UK and they do relax. It’s nice and warm, they might have had a bit of drink when they’re looking at the property and they’re not thinking totally straight. As you said, it’s just relax and don’t do it. Then, of course, as I mentioned before, they get told that no one else does it so what’s the problem? So, it’s very easy to get swept up by, “Well, no one does this so I don’t need to.” Whereas, in fact, the same reasons apply no matter which country you’re in.

Beth:  Is it the same legality to what sellers can do? I know that you’ve had a couple of instances of sellers altering the property in some way after prices have been agreed but before completion.

Peter:  Yes, this is possibly the reason why you need an independent lawyer to go through your contract because your contract should set out what’s included, what’s not included, etc, etc. If you’re buying contents and things like this, that needs to be set out in an inventory and so forth.

We always also recommend that people inspect the property before completion to make sure that the property is as it should be. So, a couple of examples that come up with that one, yeah, I had an example a few years ago where a client was buying a property in Spain and we recommended that they inspect the property before completely and they turned up to find that the seller had actually ripped out all the solar panels and generators and all the rest of it, despite the fact that they were supposed to be included. If he hadn’t turned up he would have completed and paid all the money and moved into the house to find that that was all missing. That was all specified in the contract. That was all supposed to be there.

Beth:  So, that is, then, either he didn’t have a solicitor, or it’s negligence on the part of the solicitor for not reading that contract correctly?

Peter:  No, we were doing the contract on that, so we actually set out in the contract that all these sort of things should be included.

Beth:  Fine, Ok.

Peter:  It was only because we did that and because he inspected that we spotted the problem and then we were able to put into place a solution for it.

Beth:  Wow! Such disasters that you could walk into unwittingly.

Peter:  Absolutely, then we had another one even more ridiculous. We had one last year where, again, we set out in the contract what was included and all the rest of it, and advised the client to actually go and inspect the property before completion. He turned up on the morning of completion to go and inspect the property and found that the seller had actually taken out the stained glass windows from the property and replaced them with plain glass windows. That’s astonishing. Again, because we advised them to have an inspection beforehand, and because the contract was strong we were able to put into place a solution for that so they ended up paying for new windows to be put in.

Beth:  Absolutely, as you would expect, but it’s all of those little loopholes isn’t it? It’s all of the loopholes you can get caught in if you’re not savvy in your choices. So, the takeaway message for you, what would that be? If you were giving advice to people either right at the beginning or maybe halfway through but not feeling confident, what would you say to them?

Peter:  The first step is to use an independent lawyer and it has to be an independent lawyer and not a lawyer acting for the agents or the developer or the seller. They have to be looking after your interests and not the interests of anybody else. Then second one is to do your research right at the beginning, as early as possible. So, identify how the process works, who’s who, what is what, how the procedure actually happens, how much it costs, and so forth.

Think about what you’re actually doing. Try to do things pretty much in the same way as you would over here, but accepting that the process is different. Don’t expect it to work in exactly the same way as it does over here. These things are different, but the basic building blocks are going to be the same, and be sensible. So, keep your wits about you and if you’re told something that seems to be either too good to be true or seems strange, ask yourself why that is, because so many people that we speak to (a lot of people) sort problems out after they have gotten themselves into trouble. So many people say to us, “I wish I’d thought about that at the time, or it did seem a bit strange at the time.” Giving it just a bit of thought and stepping back from it and thinking, actually, does that make sense can save a lot of heartache.

Beth:  Fantastic. Well, that all makes complete sense to me, but it is the kind of thing that maybe you do forget. I understand what you’re saying about holiday mode. It doesn’t surprise me.

Peter:  No it doesn’t and it happens regularly. Even when we speak to people beforehand and tell them to do these sorts of things they still forget. So, it is a common occurrence. It’s not necessarily the person’s fault, it’s just you get wrapped up in things, don’t you?

Beth:  Absolutely, well, hopefully, after listening to your great advice, that won’t happen to people. Thank you so much for taking the time out to chat to me today, Peter.

Peter:  No problem at all.

Beth:  Cheers, thanks a lot. Have a great evening. Bye.

Peter:  Thank you, and you, bye.

Outtro

Thank you for listening and thanks to Peter for sharing his insights about the pitfalls of not seeking proper legal advice when purchasing a property.

I particularly liked hearing about his celebrity clientele illuminating a few privacy issues that I, genuinely, had never considered.

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This podcast is produced by Kyero.com and our mission is to connect you with estate agents and properties throughout Spain

Whether your dream home is a rustic farmhouse surrounded by olive groves or a lock-up-and-leave apartment on the seafront, you’ll find everything you need at Kyero.com

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And, whenever you’re ready, here are four ways we can help you:

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Tune in next week when I speak with Carol, a teacher from Jordanstown, Northern Ireland. She purchased her new home in Roda Golf Resort, Murcia.

I can’t wait to tell you about how, as a single buyer, Carol surprised her friends and family by taking a leap of faith.

I’m Beth Davison and you’ve been listening to the Kyero.com Spanish property podcast. I’ll see you next week!

 

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