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How to get the best out of building surveys and valuations in Spain – part I

Extracts and Additions from a presentation at a Real Estate Seminar for Estate Agents, Organised in Marbella by My Lawyer in Spain and Survey Spain Network of Chartered Surveyors.

Firstly, for Building Surveyors and Valuers it’s simple, in that we work 100% on behalf of our clearly defined clients, always attempting to avoid or declare any conflicts of interest and undue influence. For Estate Agents it’s more difficult, as the client is the person who pays the fee at the end, the seller, but that only happens if the buyer pays the seller by purchasing the property. Accordingly, there has to be a juggling of the interests of both in order to reach a sale of the property.

property surveys in SpainA building survey is vital for a buyer, so they can know what the real costs in money and hassle will be in purchasing that property and decide whether the unique benefits more than compensate for those. In many northern European countries, an independent building survey and valuation report must be obtained by the seller before they can market their property and be presented to potential buyers if requested. Defects can be corrected by the seller, or the price reduced to allow for them, or the buyer just accepts them as a cost of purchase. It means that all know the background to the property purchase and avoids surprises and conflicts during negotiations and accusations of bad faith. The life and reputation of the estate agent is much simpler as they know that they, the buyer and as importantly, the seller, all know what they are selling. The agent can then concentrate on the marketing and putting forward the property in its best light.

Unfortunately, that doesn’t happen in Spain and so Building Surveys of properties can be a great concern for Estate Agents. If defects in a property, and there are always some, haven’t been noticed by the seller or the agent, but are pointed out by the surveyor, there can be a loss of faith in the agent by the owner, who perhaps looks upon them as having failed to avoid the disclosure; and certainly, by the potential buyer, who may feel that their friendly agent was hiding them all along. It’s unfair, as the average agent is skilled in marketing, but not necessarily an expert in identifying evidence of construction defects, which may have been hidden to casual observation. So, for now, the agent and owner have to sit and wait for the 2 to 3 hours that a building survey may take, hoping that nothing will be found that will put the potential buyer off the purchase. If there are multiple interests (ojalá!), there may be several surveyors intrusively poking into corners of the house and cupboards. So much simpler one pre-acquisition survey and report can be presented by the seller to the buyer.

Where the surveyor, and eventually all others involved, can be assisted is in making sure that water and electricity are switched on, and items that will take time to warm up, such as water heaters and underfloor heating, are started some time before the building surveyor arrives. Otherwise, the report will have many warnings that these things couldn’t be tested and could have defects that are not necessarily there. For similar reasons, all doors should be openable and electricity (both sides), water, IBI and any other appropriate invoices should be available for copying.

First published for Spanish Property Insight


Are you Ready? – First Rain of the Autumn

How to protect your house from the rain in SpainThe forecast is that summer is to end early and the Costa del Sol is to see rain and lightning storms on Monday to Wednesday this week (28th to 30th August). Normally, it has the decency to wait until all are back at school and the office, but this year it’s different.

Damp is the most common fault we see in our building surveys and much of it can be avoided with a little preparation.

Start at the top. Are all the terrace drains clear of weeds and debris and water able to flow down them and away easily? Remember that when it rains here, it can really come down in large amounts so every millimetre of pipe width is important. Otherwise the rainwater ponds and finds its way under the tiles and through into the areas below, or around the patio doors and into the house that way. It’s too late to install new gutters and downpipes, but make sure if you have them that they too are clear and the end of the downpipe directs water away from the building, ideally into a drainage system. Where is the water going from the terrace? We see spouts pouring onto terraces below, with a fierceness to wash away the grout from around the tiles there. Once water gets under tiling, it can flow to the walls and cause damp internally for many years. So, ensure that any water falling from above is caught, even in an empty flowerpot and allowed to overflow from there, which will avoid the damage to the surrounds of the tiles. Continue reading

How to inspect an off-plan property overseas

The Sunday Times

Q My off-plan property in Malaga is due to be completed in the next few months, and I will be inspecting the property soon. What should I look out for, and what are my rights if I find any defects? J Harrison, by email

A Before making the final payment to a developer or builder — usually the remaining 70% at this stage — you need to ensure your home is finished to the required specification. When the builder contacts you to arrange an inspection, commission a chartered surveyor’s report to UK standards, which starts at about €400 (£350). Try the Rics-governed Survey Spain (

Your snagging list should include any damp patches or mould growths; the state of the plasterwork and paintwork, which should be well finished, with no cracking; whether all the appliances you have paid for have been installed; and whether doors and windows open and close properly. Check that the taps and loos run and flush, that electric, phone and internet points are as specified, and that amenities are as promised.

Off-plan buyers are covered by various construction-defect guarantees under Spanish law, but negotiations on flaws must take place before completion, so you have leverage.

Raymundo L Nesbitt, director of Larrain Nesbitt Lawyers;

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Is the Future becoming a Little Clearer?

Brexit2-300x250With Brexit, we are all in the same boat. Writers based in Spain have the same concerns as readers, but with a slight advantage in that we focus on its effect upon our specialities. Mine are pre-acquisition building surveys and valuations, the latter being principally as an expert witness for UK and other countries’ courts regarding divorce, tax, inheritance, and other disputes relating to the value of properties in Spain.

When the Brexit result was announced, everyone, including many Leave supporters, were in shock. “What have we done?” and “How will it affect me?” For a year, we haven’t had an answer to either of those questions. Now, the UK government has put forward how they will treat EU nationals within the UK, assuming that similar arrangements will be made for UK nationals in Europe.  Continue reading

Brexit Divorce – What does it mean for us?

Brexit2-300x250Divorce has featured much in the last few days. No, it’s OK, my wife and I are still ‘two halves of the orange’ as the Spanish say, but we’ve had an increase in the number of Expert Witness instructions, where we provide current market valuations of disputed Spanish assets for the UK and other Courts. As RICS Registered Valuers, trained in UK and with many years of Spanish living and working experience, our expertise is appreciated. Especially so, as our reports are all by English language native speakers and we value to the current market without regulated variations. Our Court work also includes valuing for inheritance and tax disputes and even for the National Crime Agency where they seize the ‘ill-gotten gains’ of convicted criminals.  But the big ‘divorce’ that’s occupied our minds most this week, is Brexit. Continue reading

Why taking advice when purchasing a home is always a good idea

Survey SpainAfter many years of carrying out expert witness valuations for international courts, I’ve applied to be appointed to the President of RICS’s panel of Expert Witnesses.

The training involves a new section, entitled ‘Professional Ethics for RICS Members’. It was a thought provoking course.

“Professional ethics, that should be a doddle as I’ve been dealing with such decisions all my working life,” I thought to myself.

However, after the online training, in my first question-and-answer test, I didn’t achieve the required 75% pass rate!

So, I went through the questions again and studied the ideal answers, which were all to do with conflicts of interest and respect for RICS and the client above myself and my firm.

I read through the course again and sat a different test, being delighted with the pass now that I knew the type of answers expected.

I don’t necessarily agree that these answers are practical for real life, but it’s certainly made me think.

When somebody comes to Spain wanting to buy a property for the first time, or in an area where they haven’t built a social support system, how do they select the professionals they need to work with?   Continue reading

Do you know importance of studying a home’s Energy Efficiency Certificate?

energy_efficient_homes_1212It’s worth studying the Energy Certificate as this could help you bag the best price for the home of your dreams.

For every property sale to be registered, an Energy Efficiency Certificate (CEE) must be included within all the documents.

The Regulations state that the efficiency rating must be displayed in all selling and letting promotional material and a copy of the full certificate made available to every property enquirer.

Despite that, the convention appears to be not to obtain that certificate until contracts have been signed and everyone is on their way to the notary.

I suppose it will take a few agents and owners being substantially fined for people to comply with the regulations.

Study of the energy certificate should be a part of a buyer’s consideration of a property.

In the south of Spain, the energy consumption in a house will reach two peaks: in winter when heating is required and in summer when air conditioning comes into play.

How efficient the house is in retaining heat in winter and avoiding it in summer, is what the energy certificate is all about. Continue reading

Selling your house: The importance of the home report pack

Holiday rental licences in Spain Survey SpainThe sensible used property seller can compete in the market by having a Home Report prepared that gathers all the information on their property together and offers it as one pack to buyers.

“May you live in interesting times” – Reputedly an ironic ancient Chinese curse, and certainly 2017 is likely to have many opportunities to be ‘interesting’.

Locally, we see many new properties under construction, both individual villas and apartment urbanisations.

The vast majority of these are aimed at the upper price level and we hope that all have done their marketing analysis correctly.

Certainly, many appear to be pre-sold or for individual owners, all of which is good news.

Long may it continue, though for every new property built there are still a number of older properties available.

Investigation of the market shows a definite double level, with older properties being available at often half or less per square metre compared to the new ones.

That’s the effect of everything being offered as one package to a buyer, with guarantees, though sometimes the small print of the latter needs to be read very carefully.

The sensible used property seller can compete with that by having a Home Report prepared that gathers all the information on their property together and offers it as one pack to buyers. Continue reading

Quarterly Property Market Report – Autumn 2016 – January 2017

q-reportAs part of the research we have identified a number of wider and national property comments.

The Overall Market – Increasing divergence of markets.

  • “Where it is good, it is very, very good, but where it is bad it is horrid” (Adapted from Henry Longfellow)
  • In the prime locations in the main towns of the Costas, there is increasing demand for ‘the best’, with ripples out a short distance from those locations. Increasing numbers of construction cranes are seen to be working on individual and small groups of luxury villas and urbanisations of luxury apartments.
  • Elsewhere and especially in locations and buildings without any special selling features, lower prices are the only way any properties sell.
  • Banks, and especially the large investment companies that have acquired portfolios of properties and/or management companies from them, are carrying out renovation and completion of part completed shell buildings and taking up the planning licences where they have already been granted.
  • All this activity is good for the construction industry and for initial investors, but there is concern that it is perhaps being overdone, with the number of actual purchaser/occupiers being uncertain. Is another property bubble being inflated?
  • Undoubtedly, there are fewer British buyers, but since the beginning of the year, at Survey Spain we have seen a considerable increase in enquiries and instructions from UK and other northern European purchasers. This indicates to us that demand is still strong, with any reduction in interest from UK buyers and perhaps increasing interest in selling by UK owners in Spain, encouraging other nationalities, both Euro and independent currency based, to take up any ‘exceptional’ opportunities.
  • One other point of note, by both ourselves and reliable estate agents, is that buyers appear to be prepared to pay well over the market level for new property, when with a little research they could obtain equal or better second-hand properties at much lesser price. It appears that strong marketing, confidence in the builder and ease of acquisition are the prime reasons for this. Individual property sellers cannot compete with the marketing budgets and mortgage offers that developers/banks can provide.
  • As stated before, the apparent ‘exceptional’ drop in exchange rates gets the blame for much of the decrease in UK demand, but from recent research we have carried out at 1GBP = 1.17€ euro we are 13% above the lowest level in the last 10 years and only 3% below the average. After today’s speech by the UK Prime Minister, the pound has rallied from about 1.137 to 1.155€ euro. We are in for a rollercoaster two years, with formal declaration of leaving Europe expected before the end of March, plus President Trump, French, Dutch and German elections all to happen within 2017.
  • Within Spain the market is still difficult and extremely fractured. Similar to the Costas, the main cities are experiencing significant demand and rising prices, though much of that could be investment based, which can be fickle and could reverse quickly in the event of problems with the euro exchange rates and/or the EU. Mortgages for the average Spaniard are still at a relatively low percentage of valuation, with these valuations themselves being held significantly below actual market value due to the prevalence of MLV valuations. Accordingly, a substantial deposit has to be found by the individual purchaser and, with there still being so much individual debt, this situation is unlikely to change. Market predictions vary, with developers and estate agents anticipating an increase in value, whilst other pundits are indicating that there could be a drop during the year.
  • The high costs of acquisition and sale and the apparent increasing costs of holding property are bound to be influencing some potential purchasers/investors. The requirement for licensing of tourist property and the potential for restrictions of the numbers of those that may be granted in the future, will also affect values.
  • Many of the comments in previous reports are still current.

Continue reading

Quarterly Market Report – Summer 2016 – 12th October 2016

q-reportIn September we celebrated our 3rd year of Survey Spain, helping with ‘All Property Matters’.

This is our 11th Quarterly Report. We shall be pleased to provide more information if requested. As part of the research we have identified a number of wider and national property matters.

The Overall Market – Currency Fluctuations are having a big effect.

  • Brexit and the continuing uncertainty and bemusement caused by it, both in the UK based market and throughout Europe, has undoubtedly been the greatest factor affecting the ‘international’ property market in which we largely operate.
  • The immediate factor has been the two significant drops in exchange rate, with the latest ‘storm’ perhaps having more psychological effect than previously. Buyers and sellers are realising that sterling is likely to drop further and is reaching a new base level and unlikely to bounce back to what it was before the vote. The full effect of the most recent drop is still to be seen in values, but we expect that it will reduce the number of UK buyers.
  • The effect on sellers intending to return and sale price to UK will be mixed. Some may decide to wait for further drops in exchange rates to their benefit, but others will be more nervous at the reduction of buyer numbers. Either way, it’s likely to lead to a preparedness to drop their selling price. This will be especially evident in areas where UK owners traditionally dominate, such as in areas of Almeria and Fuengirola to Torremolinos on Costa del Sol.
  • Foreign exchange companies are still reporting that they have experienced a considerable drop in enquiries from UK, but many enquiries from Costa del Sol to transfer funds into sterling.
  • However, thankfully for many reasons, the British market is not by any means the only one and thus buyers from other currencies will have found more bargains. This appears to be the case for Nordic buyers who have shown a considerable increase in activity, although the overall EU and Euro uncertainties must still cause the more cautious to reconsider
  • Within Spain, the political situation is if anything more chaotic than before. It appears unlikely that there will be a Government with a secure majority any time soon and the likelihood of a third election is becoming more and more probable. The polls appear to show that there is more likelihood of a return of a right wing Government, though it will still be by a very small margin or possibly requiring an agreement to work with another party. In the meantime, the statistics for the Spanish economy appear to show growth so maybe the absence of government is not a completely bad thing!
  • Given that the property markets of the Costas are so heavily influenced by international buyers, the areas where these buyers predominate are largely unaffected by Spanish national politics except with regard to buying costs and general property and wealth taxes. These appear to be increasing and we have had conversations with individuals interested in a home in the sun, but looking at the costs and deciding that it just doesn’t make financial sense.
  • There is continuing and increasing concern at the attitude of Spain to Gibraltar. This is likely to be affecting the local market in Sotogrande and around.

Continue reading