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Don't leave your brain on the plane
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Wednesday, November 10, 2004 |
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We're all 'sensible sorts' when buying property in this country - arranging proper finance, instructing a surveyor, consulting an independent solicitor. But all too often that sensible UK practice goes out of the window when the sun shines, the drinks flow and the dreams take over.
Cheshire law firm Grace & Co, which specialises in handling property transactions around the world, says that potential foreign property buyers often fall into five categories:
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Brain on the plane - sets off with best intentions, but on touchdown forgets all about surveyors and solicitors.
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Gone Native - chats to a bloke in the bar who says not using a solicitor is "the way we do things here."
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Can't say no - unable to resist pressure selling, signs legal documents and pays deposit without thinking.
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Speaka da lingo - attempts to use language GCSEs to understand complex foreign legal terminology.
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Sensible sort - gets advice before flying out, uses independent lawyer and surveyor, and avoids problems.
So if you plan to be one of the estimated six million Brits who will have bought property overseas by 2020, here are some down-to-earth tips from Grace & Co to make sure you are in the last category:
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Independent advice - don't use the vendor's or developer's solicitor, it's simply not in their interests to point out potential problems to you.
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Notary public - a notary public usually oversees the formalities and acts for both vendor and buyer, so you still need independent advice.
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Planning permission - check the property has property planning permission and that add-ons like swimming pools and extensions are legal.
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Land grab - check the local authority doesn't have legal powers to seize all or part of your property at a later date, without compensation.
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Vendors' property - don't just assume it's the vendors' property to sell, there could be title disputes or they may only be tenants.
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Property charges - there may be outstanding mortgages or unpaid taxes charged against the property, for which you'd become responsible.
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Inheritance laws - foreign inheritance rules may mean children have rightful ownership, even an ex-partner's children, which a will can't override.
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Zoning problems - make sure the area is actually zoned for development and that a rural idyll will not be re-zoned for a factory or airport.
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Builder's licence - make sure the builder or developer has an official licence and the necessary bank guarantees in case of financial problems.
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Rights of way - enquire whether there are rights of way, established rights of passage or physical evidence like footpaths or a gate onto your land.
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Deposit payment - apart from a returnable holding deposit to secure the property, don't pay large sums up-front without taking legal advice.
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Fees & taxes - factor in local and utility taxes, stamp duty if applicable, notary's fees and other local add-ons into your overall budget.
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Contract signing - don't be pressurised by talk of imminent price rises and other interested buyers into signing anything without legal advice.
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Letting restrictions - if you plan to rent out the property to offset costs, check there are no restrictions or community rules about short-term lets.
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Professional indemnity - if you deal with British solicitors they have indemnity insurance that guarantees compensation, foreign lawyers often don't.
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Existing tenants - you need to know the status of any occupants, they may have protected tenancies and plan to continue living there.
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Agent's status - verify that the estate agent is properly registered and actually has the vendor's authority to sell the property.
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Mortgage arrangements - high street lenders often require you to take a second mortgage on your UK home, which could put that property at risk.
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British solicitors - don't trust overseas agents and developers who say British lawyers are expensive and hold things up, they aren't and won't.
The firm has published a free fact-sheet, with advice for those thinking of buying a property abroad, which is available at www.graceandco.co.uk or by telephone on +44-(0)1925-242488. It also offers a fixed price pre-consultation package for those who want to check out the problems and pitfalls before going on an inspection flight or viewing foreign properties.
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