MEP Diana Wallis, Vice-President of the EU Parliament, has worked hard to introduce legislation that will assist foreigners who have bought property in Spain. The new laws allow the purchasing procedure to be settled in the buyer's home country, where they will also be protected by that nation's legal system. This initiative has been set up by the European Land Registry Association and is being funded by the EU.

Piloted in Holland and Spain, the Cross Border Electronic Conveyancing (or CROBECO) project has enabled Dutch buyers to apply their own laws to the contract and apply to a Dutch court for compensation from the vendor, should it later be discovered that there are limitations on the property, such as retrospective planning laws. Pilot schemes involving other countries will be launched later in the year.

It is anticipated that this new system will give the Spanish property market a much-needed boost. Potential investors who have been disillusioned by horror stories of enforced demolitions can now consult and receive support from legal experts in their own countries, a move which must surely improve their levels of confidence in the Spanish market.

Details of the CROBECO system were released at a seminar delivered by Diana Wallis on June 14^th at the EU Parliament. Ms. Wallis was clearly confident that cross-border co-operation offered a new way forward for buyers – and sellers – of property throughout the EU.

"The beauty of it is that a buyer can have a direct contractual relationship with a person in their own country, which is what is needed because a lot of people don't know whether they are coming or going when it comes to buying abroad,” stated Ms. Wallis.

 “I've had so many people knocking at my door, dreadfully distressed, having bought in good faith and then lost their home or had serious problems with it because of unknown restrictions. The EU has a role to play in helping to facilitate property deals across borders and at the very least providing a framework of legal certainty. In practice, this means we must ensure that there is full access to information on the state of a property, the conditions attached to it and any other legal obligations or obstacles. This must go hand in hand with a transparent administration of the property deal and a quick and clear judicial process in case something goes wrong."

The Spanish government has also stepped in to improve conditions for mortgage holders. Until now, banks have had the right to seize the homes of defaulting clients and sell the property for as little as 50 per cent of its value. This has now been increased to 60 per cent, meaning that mortgagees will have a significantly smaller debt to meet.

In addition to these new measures, the government has also agreed to raise the amount of the borrower's income that cannot be seized by the bank from 641€ to 961€, which should ease the financial burden on householders. Good news not only for homeowners but also for the future transparency and fluidity of the Spanish property market in general.

If you have any questions about the legalities of buying a property in Spain please do not hesitate to contact the team at Perez Legal Group.