kathml

Cut out the estate agent use a lawyer to check all legal details don't pay a deposit at the moment the buyer's in the driving seat & if the agent doesn't like it walk away

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With the self-same winds that blow;
'Tis the set of the sails
And not the gales
That tells them the way to go

Periklês

Sorry, this makes absolutely no sense at all, grammatically or logically. Are you saying that you can use an estate agent, then expect a lawyer to do all the work on a purchase where no money has been deposited? Why on earth would anybody take the risk?

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Antes se coge al mentiroso que al cojo.

Janet

Lifer will go into voluntary liquidation in order to find a way to return the two million Euros it owes to more than 300 Canarians from whom it took a deposit, says the company's lawyer, Eduardo López Mendoza. 170 of these creditors are in Gran Canaria alone.

The lawyer claims that Lifer's assets total 4.8 million Euros, and that the issue is one of cash flow problems, but the press is reporting it is still not certain that those affected will be able to get their money back nor that Lifer has the means to repay them, given that the information was provided to the lawyer by the company itself and that it had not been checked out. The lawyer himself clarified that all this was still to be verified.

Sr López Mendoza insisted that there had been no fraud, but a business crisis grounded in the present financial situation. He admitted, however, that Lifer had not complied with standard practice of not using client's deposits. He was also unable to supply money to those clients of the business who had been given worthless IOUs.

Finally, he assured the 50 or so workers who had not been paid, some for up to eight months, that the voluntary liquidation procedure guaranteed that they would be the first to be paid, and that the law recognized their particular privilege in being at the top of the list of creditors.

The Director.
Sr López Mendoza indicated that Patricia Fernanda Nato is the sole administrator (Director) of the two businesses that form the Lifer Group (the estate agency, and the asesoria Credi-Canarias), and that she had contracted his services. He said that she had gone to his office accompanied by her partner, Julio Díaz Merino, better known as Don Pedro.

Meeting of those affected.
Around 4 or 5 November, the firm of Sr López Mendoza will call together all those involved in the Lifer failure to establish a final list of creditors, and begin the process of identifying each one of the cases. Those affected can elect a legal representative to take their place. A group action is also possible for alleged fraud, though in his opinion a civil or business process was more appropriate, and he considered the case of Lifer to be similar to the failure of Martinsa Fadesa.

Canarias7

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kathml

I didn't mean don't pay the lawyer but do not give the estate agent a deposit if he doen't like it approach the seller direct

The buyer is the boss at the moment as long as he has money & for the next few years that is what counts

__________________
One ship drives east and another drives west
With the self-same winds that blow;
'Tis the set of the sails
And not the gales
That tells them the way to go

Janet

This would be difficult because the prospective buyer would not have the vendor's details. In my opinion, it would also be unethical if the property was first viewed via an estate agent.

There's nothing wrong with paying a deposit, and it forms an integral part of the legal contract to purchase. The question is the safety of the deposit.

The main problems are the possible closure of an agency, or fraud. Although neither is impossible, a buyer's refusal to commit to the purchase by paying a deposit would probably mean that the sale couldn't happen at all. Possible solutions might be to agree a reduced deposit, and I know of a few instances where this has happened recently, or to arrange to pay the deposit to a lawyer or an escrow account.

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Lifeline

Mistrust of estate agents here boils down to the deregulated nature of the industry. To set up as an estate agent, all you need is a mobile phone and an advert. You have to be better qualified to sell carrots than houses. Firms have no obligation to protect their client, so they don't. Professional Indemnity Insurance, for example, is a rather expensive insurance that (amongst other things) guarantees a client deposit held in a client account. Because it is not obligatory and costs money, hardly any estate agents would even consider taking it out. Lawyers (through their registration with the colegio) do have PII, and so have that extra tier if security.

Janet

I agree with you in principle, Leslie, but feel that the statement in bold is just a mite too sweeping. There are agencies out there, and particularly there are a few individual estate agents, who most definitely do look after their clients from a sense of obligation to protect them.

I agree about the insurance too, and the fact that lawyers have it to me is pretty much not an issue, because they're unlikely to go bust or do a runner. Lawyers rip you off in very different ways!

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fixer

Janets probably right a reduced deposit we paid 2000 euros as a deposit you should not pay big sums to a estate agent. David

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Lifeline

Yes you're right Janet, the statement is probably too sweeping. But an agent, even with the best will and conscience, can still find themselves financially up against the wall, especially these days. Slow payments from developers, for instance, or banks refusing to renew long standing lines of credit can drive the best intentioned agent under. When that happens, the buyers whose deposits are being held will often have to line up with the rest of the creditors.

My point is that nowadays honesty and integrity are sometimes not enough. I would like to see proper licensing in this industry, legislation covering best practice and accountability. We need to restore buyer confidence after the excesses of the boom and ensure that buyer (and seller) are protected by more than promises and good intentions.

Janet

I think we'd all like to see licensing, but legislation already exists to ensure accountability. The problem is that with the best will in the world, the law is an empty threat if someone has scarpered and left the island. If criminal intent is there, no law is going to be enough, as has been demonstrated in the past ... and the fairly recent past at that.

I don't honestly think that restoring buyer confidence is the answer either ... sorry Leslie, not disagreeing for the sake of it, honestly! I think that the lack of confidence is precisely what Tenerife has been needing for far too long. People have been over-confident and consequence-disregarding, and daring beyond their means. I think it's boredom that's needed, as Mervyn King said in the BoE, not restored confidence to give a boom another shot. I think the boom times are the problem to a certain extent.

What Tenerife (and the rest of the Canaries) needs is a period where people buy property because they want the property. Not because they want a quick profit, nor because they want a "good little renter", nor even because they want to make some money disappear ... none of these will happen any more in remotely the same way as they happened in the past. The only reasons for buying here now are modest long term capital growth and personal use. If one gets good rental in the meantime, great, but that should be seen as the bonus, not the norm.

What we need is buyer common sense, not buyer confidence ... in my opinion.

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