Tel: +44 (0) 330 124 1230  Offices in Leeds, Belfast and Spain

Helping People With Foreign Property Debt & Negative Equity.


Posts Tagged ‘EU Property Solutions’

Buying or selling property in Spain?

This blog will be providing you with tailored advice on how to avoid these pitfalls when buying or selling property in Spain.

The Spanish property market has been through a turbulent period over the last decade. EU Property Solutions work with borrowers assisting them out of difficult situations often not caused by themselves as they fell victim to the Property Crash.

The 2007-2008 crash has led to people looking to sell and get out of the property burden and those looking for a bargain investment.

We have a few pointers if you’re considering buying or selling a property in Spain.

SELLING:

Price the Property to Sell

  • The property market in Spain has masses of supply currently, especially in the British/Foreign investor market.
  • Your property needs to be priced to sell, or it will sit on the market for a long time.

Will you clear any outstanding mortgage and debts?

  • Will your sales proceeds (sales price less costs) clear your outstanding mortgage?
  • Do you owe any debts for IBI taxes or Community Fees?
  • If you do not clear the mortgage your lender will not release their charge on the property and the sale cannot complete.

 Sales Costs

  • 3% Capital Gains tax if you are a non-Spanish Resident.
  • Estate Agent fees are 3-6% of the sales price.
  • Energy Efficiency Certificate typically €150-€300.
  • Plus Valia Tax – this is a local tax on the increase in the value of the rateable value of the land.

BUYING:

Purchase Costs

  • Legal conveyancing fees
  • Land Registry Fees
  • Notary Fees
  • Income Tax Provision when purchasing from non-residents.
  • Bank fees for money transfers and mortgage fees.

 Future Costs of Ownership

  • IBI Taxes
  • Community Fees
  • Utilities
  • Insurance
  • Non-resident tax

It all adds up.

 Understand what you are buying.

  • Research is essential
  • Is your mortgage affordable in the long term? Does the rate change?
  • What rental yield can you achieve – be careful if you have been promised a yield. These often don’t materialise.

Brexit and your registrations.

  • Have your NIE number ready well before starting the purchase process
  • Open a Spanish Bank account well before the purchase process.
  • Brexit implications for use of property need to be understood.

If you’re interested in hearing first-hand from our Chairman Terry Bell elaborate on any of the above, you can sign up for our free webinar that we’re hosting on Thursday 16th September at 6PM ‘FREE WEBINAR | Brexit and Covid-19 | What does this mean for property values?’ Click HERE to sign up!

PS: Don’t forget to visit our YouTube channel to access a full library of our free videos & webinars. CLICK HERE

Title Deeds in Cyprus

It’s estimated the owners of c100,000 properties in Cyprus have not been able to obtain their Title Deeds in Cyprus. This is a massive issue for our EU Property Solutions clients, as to all intents and purposes the property can only be sold to a ‘cash buyer’ – because of the flawed Title on their property.

In Cyprus:

  • The developer,
  • Central Government departments, and
  • Local government/councils are all involved in the process for the issuance of Title Deeds.

Undoubtedly, this gives plenty of opportunity for something to go wrong. Especially in Cyprus which it invariably does where huge delays and problems arise.

Our specialist team then works with the added factor that many developers have also now ceased to trade and are not contactable, thus the likelihood of ever obtaining complete Title Deeds is poor at best.

Many developers did not correctly divide up the plots of land when they were building apartment developments. Therefore could not provide individual separate title deeds for purchasers.

A major problem our clients face is selling without Deeds. Cypriot mortgage lenders will now not lend on properties without title deeds. Thus, the comment above your buyer must be a cash purchaser resulting in far low values/prices.

Despite the many issues for properties not having Title Deeds, the vast majority of EU Property Solutions successes in Cyprus, with Swiss Franc Currency issues and the Negative Equity arising, have been achieved for our client settlements without the right Title Deeds.

EU Property Solutions along with our Cypriot Legal Team understand how the core lenders work and their processes to resolve these property issues and settle mortgage debts. Subsequently, we often avoid sales procedures and assist borrowers with alleviating their Cyprus property debt burden which has been fuelled by the non-existant issues of Title Deeds and Swiss Franc mortgages.

A recent settlement below. This client will speak to any prospective clients about their experience with EU Property Solutions.

  • A couple* approached EU Property Solutions after struggling for years with their holiday home and the mortgage thereon,
  • They owned a 3-bedroom Townhouse in Paphos with no Title Deeds,
  • Their outstanding mortgage at the time of our appointment was SwFr399,000 equating to £313,000 (Sterling).
  • The property was valued at €70,000 
  • EU Property Solutions negotiated the successful settlement of the mortgage account.
  • Including our fees and settlement with their developer, the clients saved over £200,000 and most importantly protected their UK assets.

*This client will speak to any prospective clients about their experience with EU Property Solutions.

If you are struggling with a property with no Title Deeds and a mortgage sold to you in Swiss Francs make sure you call EU Property Solutions now: 0044 330 124 1230

Cypriot Vulture Funds

Since the start of 2020, we have seen a spike in enquiries, particularly from those with problematic Cypriot mortgages due to Cypriot Vulture Funds.

It has been common knowledge for some time now, but the Cypriot & Greek Banks have been lining up the sale of their NPL loan books for a while.

A recent article in the excellent ‘Cyprus Property News’ https://www.news.cyprus-property-buyers.com/, confirms a €4 billion sale by two players in the mortgage market. This will develop as the Banks look to ‘tidy up’ their loan books STILL reeling from the 2008/9 crash.

With any Foreign mortgage, trying to decipher what is truly going on, is difficult. Sometimes the teams within the Banks don’t even know, so why should you.

This niche area needs serious negotiators with strong knowledgeable legal representation on the ground in the country in question. EU Property Solutions has the complete package here – right across Europe.

Getting the right advice, from afar is difficult at best….impossible in most instances.

NPL’s can arise from any Banking covenant failure that may arise. Typically, these Banking covenant failures can arise from:

  • Mortgages with arrears on them,
  • Title and Deeds issues,
  • Swiss Franc mortgages,
  • The loan being greater than the value i.e. Negative Equity, and

Loans that revert from Interest Only to Repayment.

The issues above continue to plague mortgage holders and with over 60,000 British and Irish mortgage holders in Cyprus alone, these problems are not going away any time soon.

EU Property Solutions only ever act for the client and despite offers, would never act for banks.

That said, we recognize that the Banks of today are in an invidious position as they try to move on. They face the task of trying to unravel the awful loans written by less than scrupulous Banks and Brokers back in the day.

At best, the Banks are in zombie mode with all the pressure to bear from Bank of Cyprus, IMF etc, requiring them to sort these issues, but not providing them with the resources such as a Land Registry system that works.

EU Property Solutions and their sister company Bell & Company www.bellcomp.co.uk have over the past 10 years come across many, many debt purchasers such as the debt purchasers listed below.

The comments above are not in any way malicious about the teams in these Vulture Funds, but realistic. The teams within Vulture Funds have a job to do…and do it they will. Vulture Funds buy distressed debt/NPL’s from struggling financial institutions but get all the rights of the debt at their outstanding value i.e. the loan amount plus all costs and interest.

They are not long-term holders of this type of debt and look merely to maximize their return on the loan book and each and every loan in it.

What does this mean to those under such pressure, knowing a Vulture Fund now owns your mortgage?

  1. If you have a problematic debt with them, they will look to resolve it from their angle a soon as possible,
  2. This includes litigation in Cyprus and in the U.K. and Ireland,
  3. Their due diligence process will be far more stringent than the Banks to date when determining assets and liabilities,
  4. They will work on the premise that if a client is deemed to have sufficient assets to cover their debt…they will look to maximise their recovery from these,
  5. These include property assets including your home, pensions, cash in the bank, investments, etc and

Any other actions they see fit to maximise the return on their loan purchase.

HOW TO AVOID THE WRATH AND FURY OF VULTURE FUNDS….

Active engagement is vital, but, be aware Vulture Funds are far more clinical in their approach. There are no friendly chats here. They will hang on your every word; unlike previous conversations, you may have had with the Banks and their debt collection teams in Cyprus.

Third-Party Representation in such cases, where Vulture Funds now own your mortgage, is absolutely vital.

Vulture Funds are very effective in their work – which could possibly put mortgage holders at serious risk with UK assets.

Our mantra in our sister company – Bell & Company is always #KnowtheWorstAchievetheBest and it is so relevant with the Vulture Funds now buying up NPL’s in Cyprus

FINAL COMMENT – DOING NOTHING IS NOT AN OPTION HERE.