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Independent legal advice |
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Independent legal advice |
It is interesting to see that in most of the
publications currently circulating in the main tourist resorts
in Spain, especially in those directed to the foreign investors
in Spanish home, there is certainly no shortage of legal
advice and professionals being offered.
This legal advice, albeit occasionally overwhelming (i.e.
Sur in English special home section), serves as a reminder
to the investor of the need of engaging a solicitor prior
to embarking on the purchase of home, and is not superfluous.
However, on reading the magazines edited by real estate
companies, Bargain Homes Abroad see that they normally publicise lawyers (our
colleagues) which then appear to be the ones who are recommended
to buyers and can more often than not be seen flying abroad
with the sales team on home exhibition trips, to help
sales people close as many deals as possible by providing
legal assurances.
These ´company´ or ´corporate´ lawyers,
which occasionally are also seen onboard some real estate
companies´ sail boats as part of the trained crew,
come short of what should be regarded as independent legal
advice when dealing with those clients who have been recommended
by the real estate company with whom they sail, race and
fly.
I would like to stress that this article is no crusade against
some of my respected colleagues of the legal profession.
But it is important to call apples to apples and pears to
pears, in order to avoid confusion and misunderstandings.
In my opinion, legal advice given by lawyers regularly recommended
cannot be considered as truly independent, for the following
reasons:
The buyer, the seller and the agent have relationships of
different nature amongst them. The buyer, although he does
not normally sign any legally binding agreement with the
agent, the latter acting on his own behalf, does commit
to the purchase a deposit which is lodged with the agent
until the vendor accepts the offer. The regularly recommended
lawyer is obviously not going to conduct any search on the
soundness of the real estate agent with whom they fly, sail
and race.
The lawyer, given his regular recommendation by the agent,
is somewhat inclined to assist the agent in the obtaining
of commission in addition to providing a service to his
client. This is a logical conclusion, when is known to us
that some of these lawyers take on personnel to deal exclusively
with the clients provided by the agent and needs the client
influx to cover the costs: it is therefore vital to please
the business provider.
A lawyer regularly recommended by the agent, out of dire
logic, in the event of a foreseeable problematic conclusion
of the sale, will not advise his client-buyer on pulling
out from the purchase where the vendor does not comply with
his obligations. For some agents, a commission on a sale
can represent many months of work and any legal advice not
directed to satisfactorily concluding the sale is not acceptable.
This is often made clear in heated telephone conversations
where the regularly recommended lawyer fruitlessly tries
to explain the agent what is the most favorable legal move
for his client (but seemingly not for the agent). This puts
the regularly recommended lawyer under enormous pressure.
Very rarely (I hope), legal representatives of some kind
regularly recommended by some real estate agents are instructed
to deal with their clients in a particular manner: the vendor
of the home who sells through the agent is offered a
net price which the agent says he can obtain. When a buyer
comes along, the asking price he is given is way above what
the vendor is getting, and far more than a normal intermediation
commission. The buyer does not know where his money is going,
and the vendor is similarly oblivious of the real offered
purchase price.
But how does the agent manage to avoid both parties from
meeting and discovering this gross malpractice? Simple:
they recommend the purchaser a legal representative of some
kind who will complete the deal on his behalf either with
a power of attorney or preferably with a mandate, verbal
or written, (in Spanish notarial practice it is considered
to be verbal), concealing from the vendor the real price
the buyer is paying and diverting a good portion of it to
the agent. A few days later, the buyer arrives in Spain
to ratify the acts of his legal representative of some kind,
with the result that he never meets the vendor and never
gets to know the moneys that have been sucked by the agent.
True independence is not achieved in these cases, although
this by no means signifies that all deals are doomed when
the agents recommends his lawyer friend. Most of them will
almost certainly act honorably with their clients, and most
of the introductions will create solid client-lawyer relationships
to endure the test of time. But from the agent’s point
of view it would be honest to advise the client-purchaser
that the designation of a regularly recommended legal representative
is intended to serve the agent’s purpose more than
the purchaser’s.
I would like to finish this article mentioning a particularly
immoral and almost illegal form of recommended legal representation.
It refers to big UK companies operating in the Alicante
area who organise inspection flights for prospective purchasers
to view pre-designated new developments. Within the package
inclusive of accommodation, flights, scheduled viewings
and other services, these big companies have a special discounted
offer on a legal representation service. Within the legal
package one cannot detect a trace of ´independent´
advice.
Not only does this lawyer accept that large percentages
of the purchase price are paid to the UK Company, sometimes
through UK accounts, rather than to the Spain-based developer
but is also unconcerned on whether the developer guarantees
the down payments. If the client insists on having all payments
guaranteed, as the law provides, they will try to charge
the buyer for arranging the guarantees which by law are
totally free from cost for the buyer and on account of the
developer. The supplement charge will be of 1% of the guaranteed
amount, totally outrageous.
Paying for such a legal representative is not advisable.
The consequences of using one are definitely counterproductive.
All of the above is based on experiences of first time home
purchasers in different areas in Spain. |
This page has been reproduced
with the permission of Antonio Flores Vila of Marbella
lawyers.
Disclaimer:
Bargain homes abroad does not accept any liability
for the accuracy of the above legal articles and are intended
as general guidance, it does not constitute legal advice,
nor should it be relied upon, you should always consult
a lawyer to discuss your own personal situation. |
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