An interesting event occurred just a few days ago that was enough to make me want to write about the experience (with my clients’ consent of course). I was representing a British couple for a property purchase on the island and after they confirmed to me the conditions they had agreed with the developer in their initial meeting, I carried out the necessary property searches and in so doing contacted the developer directly. In one of our conversations, the developer mentioned off hand, a couple of other conditions that had not come up before; the buyer would be liable to pay outstanding local council rates and community charges for the previous year. This of course can lead to the buyer being held responsible for any other outstanding community charges three years prior.
As you can imagine, I was not in agreement at all with these new conditions mainly because it is not the buyers’ responsibility to pay the seller’s debts and also because the buyers had not been advised of this at the start. After debating the matter with the developer, they point blank refused to back down so the buyers’ were informed of the situation and of course they were extremely disappointed with this latest development. They were duly informed again of their rights and the correct purchase procedure but felt pressured to continue or risk losing their dream house.
In the days leading up to the proposed completion date, numerous attempts were made to persuade the developer to change their course of action but they all failed as from their standpoint, they could just as easily sell the property to somebody who readily accepts the conditions they want to impose. On the day, the buyers’ were informed one more time of the risks etc involved but they repeated that they did not want to jeopardize the sale and instructed me to proceed. To my amazement, the most unexpected thing happened at the notary’s office; signing was refused! Thirteen years in the industry and I had not witnessed anything like it! The notary refused to sign off on the deed stating that the clauses, terms and conditions therein were indeed abusive and contrary to law. Even though a private agreement had been made between consenting adults who were fully aware of the correct procedure and possible risks, the notary did not feel the same way and did not want to allow the developer to evade payment of taxes and fees that were their responsibility. What a result!
Article 82 of General Law for the Protection of Consumers and Users details terms deemed abusive such as the ones from this latest example of sellers exploiting buyers, “abusive clauses are defined as those practices not expressly consented, that contrary to the requirement of good faith and to the detriment of the consumer, suppose a significant imbalance in the rights and obligations of the parties involved”.
The Official School of Notaries has had reports of similar abusive clauses so at the end of 2014, the following website was launched where consumers can obtain advise as to their rights, www.occa.notariado.org
In any case, the notary plays an important role and as public officials, they are duty bound to ensure the protection of consumer rights by informing them of the meaning of the clauses in the deeds and verifying they do not contain clauses considered abusive by Law or declared invalid by a final judgement entered in the Register of General Conditions. They are obliged to do so, even if the client’s representative has duly advised them of the same previously.
Hopefully this will be a turning point where ruthless developers can no longer take advantage of their position and try to obligate potential buyers to purchase under unfair terms. Also, it shows that notaries will also be held more accountable for the documents they sign off on which can only lead to further security for the consumer. Buying a permanent or a holiday home should be an exciting and memorable experience and buyers should feel safe, that their rights are being taken into consideration at all times and not feel they are at the mercy of sellers.