As we have mentioned on numerous occasions, Spanish banks have been left with an array of troubled property loans after many mortgage holders defaulted on their payments and effectively gave up their properties. There are literally thousands of empty homes across Spain although there is a worrying trend in black market trade in Spanish homes. This is something which could be replicated across other troubled European countries and is now headline news in some areas of Spain.
In this day and age, with an array of regulations, rules and legal obligations, you might be surprised to learn that it can take up to 2 years to evict illegal tenants from a property. As a consequence, there are ongoing reports of criminal gangs breaking into empty properties owned by Spanish banks and illegally occupying these homes. Indeed, many of these criminal gangs will offer to “sell” these properties to third parties, or rent them for a relatively small amount, in the knowledge that it could take up to 2 years for eviction notices to be served and actioned.
What can the authorities do?
In many ways Spanish banks and the Spanish authorities have their hands tied because unless they pay for expensive security to protect their properties they will remain susceptible to criminal gangs intent on effectively “squatting”. As a consequence, and as this particular movement gathers pace, we are likely to see a growing number of repossessed Spanish properties entering the “black market” and changing hands for relatively small amount of cash which can be anything up to €2000.
Quote from PropertyForum.com : “There has been intense speculation over the last few months that Spanish banks are on the verge of dumping their troubled real estate portfolios. In many ways this has held back the Spanish property market in the short-term but are we potentially on the verge of a major change in tactics by Spanish banks?”
Unless the authorities bring in some kind of fast-track system which will allow the legal property owners and the local authorities to take action sooner rather than later, it is difficult to see how this new trend can be curtailed?
The Spanish property market
It is common knowledge that many banks across Spain are looking to offload an array of properties which they acquired when their customers defaulted on mortgage payments. In light of the recent developments we can probably expect the Spanish financial sector’s property disposal programme to gather pace. The fact is that if any property is illegally occupied by any individuals or groups then this will see the legal owners paying out for court orders to retain possession. This will take time, money and will squeeze yet further the capital resources available to many Spanish banks.
So far we are not aware of any similar situations emerging in other troubled European countries where large-scale mortgage defaults have led to an array of properties reverting back to bank ownership. The problem is that if criminal gangs in areas such as Greece were to see relative success for those operating in Spain, buying and selling black-market properties, would they follow suit?
It is frightening to think that even in this day and age criminal gangs can illegally occupy vacant properties, sell them on the black market or rent them to third parties, and it could take up to 2 years for the Spanish authorities to issue the relevant paperwork so that the rightful owner can reclaim possession. If this growing trend was to be replicated across other areas of Europe then this would be yet another headache for the real estate sector.