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14/12/06 Corruption in the housing market

During the last few months many cases of corruption have appeared in media. As Mark Stucklin wrote, many attractive areas have been mindlessly overdeveloped, rising prices have shut young, first-time buyers out of the market, and the economy has diverted productive recourses into building a glut of empty properties. But perhaps the worst consequence of the boom has been an increase in corruption, particularly in town halls. Property-related corruption scandals are now reported almost daily in the Spanish press.

Anti-corruption prosecutors are investigating dozens of cases, largely concentrated in municipalities on the Mediterranean coast, and around Madrid. Marbella may be the best-known, and most egregious example of town hall corruption in Spain, but it is also just the tip of the iceberg.

The majority of the corruption cases under investigation involve mayors, or other officials, taking bribes for issuing building licences, or for reclassifying land from rural to residential.

Though corruption harms the long-term interests of Spaniards more than anyone, it can also affect foreigners buying property in Spain. Many English-speakers have invested a chunk of their life’s savings in a property in Spain, only to find that corrupt local practices have left them with an illegal property.

Although the Government has announced policy of zero tolerance of corruption in town planning departments, it would be a very difficult matter to solve. Choosing an independent lawyer may help you to avoid potential problems in the purchase of the house of your dreams. Foreign investors can be safe choosing a qualified legal service.

 

 
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