Standing up for standards
SO far in this column we have met some of movers and shakers in the regional executive branch such as Vicente García Nebot, the director general of town planning; Manolo Civera DG of the AVPT; Carlos Mazón, president of the Alicante provincial government...
Today the focus is closer to those that currently influence policy and will continue to do so whichever way the wind blows in the regional elections this month.
When it comes to property sales here in the Valencia region, on a regular basis people tell me that it has been a bit like the wild west with expats in the role of the innocent settlers who just want to raise cattle, while playing a bit of golf at the weekends, being unjustly harassed at every turn.
The reality is that as we have been here for so long and there are so many of us – that in some areas in most cases it’s just us selling to us. That happens either directly or through an agency, or more than one agency owned and run by expats.
Established ‘settlers’, granted with help of a few native guides (lawyers, notaries etc.), selling to new ‘settlers’.
Nothing wrong with that, it helps encourage foreigners to come and that rising economic tide floats all boats as they say. Given that 70% of second hand properties (2022) and 37% of all properties (2022) bought in the Valencia region were bought by foreigners it’s clearly a win-win situation.
That said it would help if we wouldn’t all gather in one spot so much, as it leads to towns growing at rates faster than the installations can cope with.
I am planning to encourage people to take a look at different destinations through the ‘two pathologies, one solution’ which with any luck you’ll be hearing about right here.
The ‘us selling to us’ dynamic and the ‘them selling to us, as if they were us’ dynamic does however lead to certain vulnerabilities for foreign buyers. Case in point; the system we use in the Anglo-Saxon sphere for property exchange is called escrow.
Essentially it’s two lawyers, one representing the vendor and another the buyer, looking at all the papers, trying to resolve any issues technical or legal, taking possession of the funds (so they don’t suddenly disappear off the fiscal map) and only when both lawyers give the thumbs up do the funds get transferred.
That system, the escrow system, although imperfect, works really well and has therefore been copied all over the world. It has been so successful for one very simple reason. It’s adversarial.
The interests of the two lawyers are in direct conflict, it’s a zero sum game. Making things peachier for one party makes things worse for the other and the lawyers resist that.
However, this is what happens here for the resident or non-resident potential ‘settlers’; a family contacts an estate agency, they find a nice house, they either request or are given the contact of ONE lawyer, so that lawyer’s income depends very directly on the stream of recommendations coming from the agency. Clearly it shouldn’t, as it’s clearly a conflict of interest.
The agency wants a sale, the settler wants a house, the lawyer, through no fault of their own I would like to add, is essentially now in a facilitating role.
Asking the question ‘how
do I make this happen?’ as opposed to ‘should this be happening?’ on behalf of his client.
We absolutely 100% know this is the case as the tens of thousands of expats that have bought illegal/ unlicensed property in the countryside clearly would not have bought if they had been told by their lawyer that, before MIT licences appeared on the scene, which is essentially this year and last, the only two destinations for that property were natural wrack and ruin, due to their inability to request any municipal licence to maintain or god forbid prolong the useful life of the property, or even worse voluntary demolition i.e, buy a property just so you can knock it down yourself. Not happening, hasn’t happened and not going to happen.
No-one in their right mind would have knowingly bought under those circumstances and they did actually buy.
We know those were the legal and town planning circumstances, we’ve read the law, so that information cannot have been provided to the buyer, or at least not in a format where the consequences were made sufficiently clear.
There are a couple of things that can be done, which are currently not being done, to chaperone the buyers through the ‘ambushable’ bit of the purchase procedure.
Essentially they boil down to breaking the evident conflict of interest and guaranteeing as standard procedure/best practice (has to be like that as it isn’t required by law here) that the relevant questions get asked and that information gets translated from techno babble into ‘human’ and relayed to the purchaser.
Especially questions about the legal and town planning status of a property and the consequences of that status for any potential buyer.
The first, avoiding the conflict of interest, is in theory easy and I’m going to have a bash at making it happen.
The lawyer contact provided to the potential buyer has to come from non-interested source – i.e., not one linked to the success of the sale.
I’m going to have conversations with the college of lawyers for Valencia and get a list of English speaking lawyers so that people can just pick up the phone and call one.
Amongst other things I’m a Judicial Expert Witness, there’s a book, called the red book, nothing left wing about it, it contains the names, numbers and location of a lot (not all as you have to pay to be in it) of Judicial Expert Witnesses.
Something like that would be super useful – the red, white and blue book for example, with that data for professionals competent to do deal with expats in their language.
Plan B is getting the professional college to provide a service whereby owners can just call the college and get one assigned to them by area of competence, geography and the alphabet.
As their next contract won’t depend on the same agency but, may more probably depend on the client recommendation we successfully detach the success of the sale from the advice that’s given.
This is very ‘do-able’, I’m going to push for it, when it’s done you’ll hear about it right here.
The second step, the package of good information as best practice step is also doable, I know that as I had the opportunity last week, and two weeks before that, through the MIT project, to meet and get to know a nonprofit association which is putting it into practice right now. That entity is ASICVAL, the real estate association of the Valencia region. Founded in 2011 since then it has become the main sectorial body in its field the provinces of Castellón, Valencia and Alicante.
It brings together more than 207 agencies made up of thousands of professionals. Is that everyone in the sector? No, unfortunately not. Is it a good start? Yep, it definitely is.
ASICVAL has developed a property certification system, I heard about it when I gave a talk on MIT licences to their members.
I have no commercial links to ASICVAL, they don’t sell properties themselves, and I have no commercial links to any of their agency members, it just sounded like a possible partial solution to the lopsided non adversarial legal advice system described earlier so I wanted to know more about it. To that end I interviewed their president Nora Garcia.