THE RUSSIANS ARE COMING!

‘Twitters from the Atlantic’ – by Barrie Mahoney

Barrie Mahoney was a head teacher and school inspector in the UK, as well as a reporter in Spain, before moving to the Canary Islands to launch and edit a new English language newspaper. He enjoys life in the sun as a columnist and author, and continues to write a series of popular novels, books for expats, as well as designing mobile apps and websites to promote the Canary Islands.

The Russians are Coming!

It is fascinating to look at the origins of expats moving to the Canary Islands over the last two centuries or so. In the nineteenth and twentieth centuries it was the British who stamped an almost colonial footprint on the city of Las Palmas de Gran Canaria and the north of the island. We can still see epitaphs, such as the British Church, British Cemetery and British street names dedicated to the great and good of the city at that time, and who brought great prosperity to the island in the form of shipping bananas and other fruit and vegetables to the UK. Cruise ships also regularly plied their trade to these islands, bringing with them a privileged few to enjoy these much favoured and popular “Fortunate Isles”.

In later years, it was Tenerife that found the greatest favour with British holidaymakers and expats, and who still flock in great numbers to its shores. However, it was its neighbour, Gran Canaria, which attracted more discerning German holidaymakers and expats.

The reunification of Germany, following the collapse of the Berlin Wall, together with a joint taxation agreement between Germany and Spain, forced many cash strapped German expats, as well as those with holiday homes, to sell their homes. Many British purchasers, who found themselves with more ready cash than anticipated, due to rapidly rising domestic house prices on the home market, were happy to take full advantage of a property market that was rapidly falling in value.

We are now at another stage in the on going transition of the island. Since the world recession of 2008, many traditional purchasers of properties in Spain and the Canary Islands, such as the British and Irish, have been forced to sell their homes, often at much reduced prices. Scandinavians, and particularly Norwegians, whose strong currency has allowed many to view the purchase of a holiday home on the island as a rather pleasant alternative to buying the traditional summer cabin in the Norwegian lakes and mountains, have swiftly taken their place.

These islands are a wonderful patchwork of nationalities, colour, religion and race that live and work harmoniously together for most of the time. Interestingly, there is a significant Korean population on the islands, which occurred by accident following the sudden collapse of the Korean whaling industry. Hundreds of workers and their families were stranded on the island, which quickly became their home. Chinese and Indian business owners also maintain a significant presence on the island, which I strongly suspect the islands could not do without.

The identity of the islands continues to change, as it is now the Russians who are buying properties in great numbers in the Canary Islands, as well as in Peninsular Spain. In Tenerife, for instance, many companies are now sending their employees on Russian language courses, in order to better serve the needs of their new affluent clients. Indeed, it is reported that the Government is considering the relaxation of Spanish residency laws to Russians who purchase a property of sufficient value to gain automatic residency. It is thought that this measure would help to reinvigorate property sales in the country.

Personally, I have no problem with who my neighbours are, just as long as they obey the laws, traditions and culture of the country that they are in. However, I have recently received several disturbing accounts from several residents who are desperately trying to sell their homes, both in the Canary Islands and in Peninsular Spain, and who are being taken advantage of by potential Russian purchasers who, it would seem, are not always the most straightforward of clients to deal with.

The scenarios that have been reported to me by readers are similar. Initially, great interest is shown in a particular property, which is nearly always one of high value. Usually there are several visits, as well as friendly attempts to get to know more about the seller and the reasons for selling. The unsuspecting seller agrees a purchase price, a deposit is paid and a date with the notary arranged. It is at the notary stage, when the attitudes of the purchaser suddenly change for the worst. The buyers, who previously appeared happy and content with the proposed deal, now suddenly find many problems with their intended purchase, including unforeseen planning and building issues, documentary and legal errors to which the seller is completely unaware until the moment of signing in the notary’s office. In all cases, the prospective purchasers have insisted upon a massive reduction in the agreed purchase price before they will complete the sale. In one case that has been reported to me, the final reduction was in excess of 50,000 euros before the sale was finally and reluctantly agreed. Sadly, in all the cases reported to me, the would-be purchasers were Russian.

Some may call this good business practice, as it is the responsibility of the seller to be fully aware of the facts before the completion of the sale. There may also be cultural issues to take account of. Personally, I see it as sharp practice at best, and fraudulent at worst. Sellers are at their weakest position at this point in the sale, and the well-prepared buyer, with less than generous intentions, knows it. Many sellers are selling their properties because they are in financial difficulties, and wish to sell their home and move back to their country of origin, whilst others are trying to complete the purchase of another property to which they are already financially committed. Sellers are also at a considerable disadvantage because of language issues, and the legal ‘slickness’ of the purchasers’ lawyers. I also wonder about the impartiality of notaries in such circumstances; they should have the power to intervene and review such transactions, but it appears that they do not do so.

It seems that all is not well on the current Russian front, and I suspect that the few accounts that have been reported to me are just the ‘tip of the iceberg’. I would also be interested to hear of any similar situations from readers.

If you enjoyed this article, take a look at Barrie’s websites: www.barriemahoney.com and www.thecanaryislander.com or read his latest book, ‘Escape to the Sun’ (ISBN: 9780957544444). Available as paperback, Kindle and iBooks. iPhone/iPad and Android Apps: ExpatInfo, CanaryIsle and CanaryGay now available.

© Barrie Mahoney

Filed under: http://www.theleader.info/article/41142/

Car and Motor Insurance | Spanish Home Insurance | International Money Transfers | Send Money to Spain | Spain Property | Online International Payments | Property in Spain
Costa Blanca Property for Sale | Cabo Roig Property for Sale | International Payments |