DESPERATE MEASURES AT POLARIS WORLD

Admin — Tue, 09 Feb 2010 02:13:23 +0000

FOLLOWING on from last week’s revelations with regards to the financial issues at Polaris World, the EWN approached a Solicitor involved in the saga to try to find out what the best course of action might be for the hundreds of investors that have been affected by its downfall.

According to reports, Murcian Real Estate giant, Polaris World, has accumulated debts of over 100 million euros, for which it now has to recompense its principle creditors, Bancaja, CAM, Banco Popular, Banco de Valencia and CajaMurcia. However, what is worse than this are the consequences to the innumerable house buyers who put their faith in Polaris’ sound reputation, pledging thousands of euros in ‘off-plan’ property investments.

The group was founded in 2001, and has since developed to encompass 60 separate companies and 6 prestigious residential complexes, sprawling over 30 million square metres of residential or commercial land. After two years of declining sales and spiraling running costs, Polaris World has acknowledged that 4 of the urbanizations (El Valle Golf, Alhama Golf, Hacienda Riquelme and Hacienda Verde), and15 subsidiary companies, including two hotels (Mar Menor Golf and La Torre Polaris), Nicklaus Golf Trail, and El Oasis de Alhama commercial centre are among its assets that have fallen into a state of “insolvencia actual”.

BANKRUPTCY

The EWN spoke to Oscar Ricor of ‘Ricor Abogados’ in Torrevieja, who is representing a number of expats who are in fear of losing investments pledged against properties in Polaris World. His first words of advice were that anyone who thinks that they might be affected by the company’s financial struggle must take action immediately as once bankruptcy has been filed it can take more than 5 years to reach a solution.

He claimed that “If investors are to stand any chance of getting their money back then they should file a complaint before the company hands over to its creditors, otherwise the amount owing will be swallowed with the mass of other debts”, emphasizing that “time is of the essence”. He went on to describe the bankruptcy process whereby assets are sold and the first portion of profit is paid to the Government to allay tax and Social Security debts, then the principal financiers, with the remainder being offered to major suppliers and employees, before a thought is spared for house-buyers.

Mr Ricor introduced the question of what substitutes a “completed” property, in the eyes of the authorities, as even those that appear finished and have water and electricity supplies must be officially approved and issued with habitation certificates, which does not usually happen until an entire urbanization or phase is complete, including adequate road links and lighting. This petition must be submitted by the Constructor, who is at present in no position to fulfill this obligation.

ACTION

Mr Ricor stated that several people who have paid deposits have already began court proceedings in the hope of gaining compensation, or at least assurance that the contract will be seen through to completion, accounting for fluctuation in the market price since the contract was agreed. He said that by acting now their cases will take priority and are more likely to end in a satisfactory conclusion, and urged anyone who is in a similar position to follow suit.

It is worth noting that by approaching a Solicitor who is already dealing with Polaris cases or those of Trampolin Hills, the ground work has already been done, and you are guaranteed the support of others in the same situation. Relying on the “Strength in numbers” philosophy, Mr Ricor concluded that “The more people who file complaints against the company the stronger their case for redress”.

Taken from the Euro Weekly News.

The World Begins to Crumble for Polaris

Admin — Thu, 04 Feb 2010 02:16:40 +0000

Article about problems at Polaris World, published in the Euro Weekly News..

A SERIOUS PROPERTY PROBLEM IN SPAIN: FOREIGN BUYERS ARE DESERTING THE SPANISH PROPERTY MARKET

Admin — Fri, 10 Jul 2009 02:18:07 +0000

A) INTRODUCTION: Spain has an enviable climate & quality of life but if you have the intention of moving here to live you need to know all that is necessary so that your dreams do not turn into nightmares. Spain, as we know, is suffering a property crisis, we do not know its roots but it runs very deep. Here we are giving a simplified but concise guide with the “key-points”:

I. - URBAN LAW IN SPAIN IS CONFUSING AND HARSH:

Why confusing?: There exists a national legislation,- covering all of Spain as well each autonomous region (county council) also as its own legislation, in addition to this each local town hall has its own local legislation.
Why harsh?: Faced with an infringement of urban law of which the foreign buyers have been victims, national, regional & local legislation is followed with conviction, treating the buyers/owners as the only person/persons culpable regarding the infringement: fines & demolitions, without consideration that the buyers purchased in good faith and that they have been defrauded by an unscrupulous builder.

II. - IN SPAIN PENAL LAW LOOKS AT THE ACTUAL CRIME AGAINST URBAN LAW AND DOES NOT PROTECT THOSE THAT ARE VICTIMS OF IT:

Spain has this problem because urbanistic and property crimes committed are difficult to prove and the fines/penalties against the offenders are low, this acts as an incentive for corrupt and unscrupulous constructors to continue with their illegal activities, defrauding innocent foreign residents with almost total impunity.
Even thought this problem exists should one still take legal action (denounce) against urbanistic fraud?: YES ALWAYS

III. – IN SPAIN, PROPERTY DEVELOPERS in general work againt the purchasers by not meeting the legal obligations and infringing urban law for example:

They do not guarantee refund of deposits.
They do not guarantee imdemnization for possible damage to the building.
They do not build to the building regulations stated by law, concerning noise; humidity/damp; thermal insulation; accesses for handicapped & elderly people;
They charge the buyer for builder’s electricity & water, this is prohibited by law.
They do not provide a license for the work nor a license for first occupancy without these the buyer will not be able to contract electricity, water & gas supply.
They use contracts that are previously written with abusive clauses against the buyers.
They use solicitors that are on the payroll of other companies, they charge their fees through these firms, making proof of payment more difficult.
They hand over the properties without them being finished, with damage and construction faults that affect habitability of the house or the whole urbanization.
They make multiple extra charges: damage repair; finishing incomplete work; legal action, contracts, disputes & reclamations.
They declare themselves bankrupt when they receive judicial reclamations so that the buyer has to then “quita” (which means, be paid less), and also has to “esperar” (which means, in most cases wait various years to recover part of the money).

B) WHAT TO DO IN THE FOLLOWING SITUATIONS ( real situations which our law firm are defending at the present time)?:

I. If you purchase a newly built rural house, on rustic land with less than 10.000 square meters:

Don’t trust this, as it is a fraud!

The buyer will be faced with four main problems, apart from many others:1º) Problems with the Town Hall:

Because of the urbanistic violation: fine & demolition. They will deny the license of first occupancy (Licencia de Primera Ocupación). They will deny your registration to the towns padron(similar to the electoral roll). They may possibly demolish the property, making you pay the fine & the costs of demolishment.· Because of the possible re-classification: If the land is Rustic (country land) and it is decided by the town hall to re-classify the land as urbanisable then the purchasers will be obliged to pay the costs of this procedure. These costs will be registered as debt against the property with the land registry until paid. If the debt was to remain unpaid a charge can be put on the property and forced sale is a possibility. 2º) Problems with the companies supplying electricity, water & gas: you will be UNABLE to contract their services. 3º) Problems with the legally registered land owner: Those rustic lands that are passed on from fathers to sons working in agriculture will have problems with the Land Registry Office: They are often missing registration on one or some of the owners. The size of the land is incorrect and the square meters declared are wrong as the land registered may have more or less area than has actually been sold. There is no record of the land having ever been registered with the Land Registry.

4º) Problems with the seller: If the farmer sells the land to a speculator, this being done under the cover of another company can then be sold by private contract to the unsuspecting foreigner, without anything being registered at the land registry and without the knowledge of the actual registered landowner, and in the process the value of the land that doubled or tripled in price from its true market value, and later the company that has carried out this “speculation” goes out of business.

II. If you purchase a house on plan that never gets built: The buyer will have to reclaim the refund of what has been paid, in the penal and civil courts. Important judicial costs involved.

III. If you purchase a property & before it is handed to you, the property Developer declare themselves bankrupt ( for example “Grupo San José”): The buyer will have to try to recuperate their money at the penal & civil courts, they will also have go to the Company Courts (for those that have gone bankrupt) Juzgados de lo Mercantil (los de la quiebra) as soon as possible, because the later you act, less money you will be able to recuperate & the longer it will take. Also important judicial costs.

IV. If you purchase an urban plot and when you try to build a house, the town hall because it is in “floodable area” even though it has more than 10.000 square metresSi usted compra un terreno urbano, y al intentar construir una casa, el Ayuntamiento se lo prohíbe porque está en “zona inundable”, aunque tenga más de 10.000 metros cuadrados: One thing that is not known is that in the Comunidad Valenciana, the land is exposed to periodical serious floods. There is a law that defines the level of flood danger in each area, which also specifies what this land may not be used for, to avoid deaths & damage. If you are in this situation you must take out a lawsuit against the Town Hall & against the seller.

V. If you purchase a property with a private contract, & without a public deed of sale escritura de venta, then one day you find out that the seller has again sold the property to a third person with whom they also failed to sign a deed of sale at the Notary escritura de venta:

Another thing you should know about Spain is that there are three different types of owners of properties: the owner by Escritura Pública (PUBLIC DEED OF SALE); the owner by contrato privado (Private Contract); & finally, the owner that does not have a contract or Escritura but for some reason is “owner” as he lives in the property.

The first situation the most preferable by far you are protected by the law. The second situation second preferable, but nothing goes against information registered at the land registry. The third & last situation you can with the passing of time (30 years) acquire the property, but later before buying the property you have to prove there is NO existence of a third owner.

C) CONCLUSION: Do not trust intermediaries or the solicitors recommended by the estate agent (most likely on salary from the promoters or estate agents) & always consult with independent solicitors & experts in this area, like RICOR ABOGADOS, from the first moment: when choosing your land or property to purchase, when choosing the promoter/estate agent or intermediary, and when choosing the contract and clauses within that contract therefore ensuring your rights. Remember at the first moment of the appearance of any problems or symptoms of problems, you must not wait; it must be dealt with immediately in order to resolve the problem, time is always against the trusting buyer.

spainsolicitors.co.uk » Articles

DESPERATE MEASURES AT POLARIS WORLD

The World Begins to Crumble for Polaris

A SERIOUS PROPERTY PROBLEM IN SPAIN: FOREIGN BUYERS ARE DESERTING THE SPANISH PROPERTY MARKET