Thousands of buyers who have not yet taken ownership of their properties on what has become known as the "Costa del Crash" could lose everything.
Thousands of buyers who have not yet taken ownership of their properties on what has become known as the "Costa del Crash" could lose everything. Lawyers specialising in real estate report a surge in the number of British buyers contacting them for advice after the developers they bought from have gone under. Spain is suffering similar economic jitters and rising prices as the United Kingdom. Others who have paid in full now own homes on resorts that may never be completed. They are seeking to recoup their losses to salvage what remains of their dream move abroad or hope of a perfect holiday home. "I've now got dozens of British clients who all want to know where they stand," said Martin de la Herran of the Spanish law firm Abolex.He said that the biggest problem lies with those who have paid deposits on properties that may never be built. "Some people have paid 50-60 per cent of the final cost of the home, the company goes into administration and it's a long process to get their money back. Courts are not fast in Spain as we know."
At the resort of Costa Esuri in Ayamonte, on the border of Spain and Portugal, building work has ceased. The developers Martinsa-Fadesa, one of Spain's largest real estate firms, filed for bankruptcy last week following the path of about 60 smaller construction firms that have gone under since the start of the year when the bubble burst on a decade-long construction boom that had fuelled Spain's economy.
The development of 2,184 homes and two golf courses on the bank of the Guadiana river is far from complete. Semi-constructed buildings cover one hillside, cranes loom over a half built hotel, and one golf course is little more than bare earth.
Ben and Kate Byrne, newlyweds from Warrington in Cheshire, have just taken possession of their three-bedroom "townhouse". The couple, who paid 230,000 euros (£180,000) for their property, hoped to use it as a holiday retreat and to rent it out for the rest of the year. "It's an eye sore and not exactly what we thought we were buying into," said Mrs Byrne, 30, a PA at the Environment Agency.
"Unfortunately, its rental potential isn't much at the moment." The house has not been connected to mains water and has been without electricity since Martinsa-Fadesa went into administration last week and stopped running the generator.
The large roof terrace is supposed to have views of the resort's second golf course but instead it overlooks earthworks and a tarmac road that leads nowhere. A commercial centre that would have contained shops and restaurants has not been finished. "This was supposed to be a self-contained community but there is nothing here at the moment except for the club house," said Mrs Bryne of the golf club which houses the resort's only bar and restaurant. The estimated 1,000 people, around 700 of them British, who have already taken possession of Costa Esuri properties, are frustrated at the complete absence of information from Martinsa-Fadesa about what will happen next. They have formed a residents' committee and are taking legal advice. "We've been told nothing by the company," said Mr Byrne, 31, a musician. "We have been left in limbo, not knowing if or when the resort will be finished or who to turn to for maintenance issues." But they feel they are lucky ones. "Hundreds of others have yet to complete on their properties here so they could end up with nothing," he said.
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