Former footballer strikes a blow for overseas investors
Now there's a way to take on dodgy developers, cartel lawyers and disappearing deposits, writes Richard Way
Sunday 23 October 2011
When Neil Heaney cried "foul" in his former life, chances are he was describing a crunching encounter on the football pitch.
These days the ex-Premier League and England Under-21 winger is more likely to use the phrase while talking about foreign property developers. Sadly, he is one of the thousands of Brits to have fallen prey to a doomed property investment during the boom years leading up to the crash in 2008.
The good news is that Heaney now brings hope to an increasing number of overseas investors who, like him, are due money back from a developer, but are daunted by the prospect of navigating a foreign legal system.
As the chief executive of Judicare, which incorporates a full-service Spanish law firm and a UK legal-services company, he provides specialist legal representation for affected buyers. Unsurprisingly, demand for his company's services has rocketed in the past couple of years.
At the start of the month, Heaney was in Madrid opening an office to complement Judicare's UK base in Hertfordshire and its Tenerife offices.
"We have more than 200 cases in court in 12 countries," Heaney told The Independent on Sunday. "At the moment we have class actions in the Emirates, as well as cases in Spain, Cape Verde and Cyprus, to name a few. More far-flung destinations recently added to our list include the Turks and Caicos Islands and the Dominican Republic."
Heaney's career move from football – he played for Arsenal, Manchester City and Southampton – to overseas property law stemmed from a personal struggle to find a reliable Spanish lawyer when his own property investment became problematic in 2009. Attracted by the promising investment prospects of off-plan, in 2006 Heaney was one of a group of high-profile investors who bought into a project on the Costa del Sol. The project failed and investors are still fighting to recover their deposits.
"I put down a deposit on an apart-hotel that was going to be on the beach in Manilva," recounts Heaney. "Each of the 25 investors in our group signed for a single unit, and our deposits, paid to the developer's solicitors, totalled around £1.5m. I believe more than 300 units were sold on the project.
"The developer appeared reputable and when we went over to view the project, everything looked in order."
Three years down the line, though, the investors received confirmation that the project had been stopped by the government and had never had planning permission. "Despite this, the developer had continued to sell the project and [is] now facing a large criminal case in Marbella, although the company has been liquidated in a number of jurisdictions," adds Heaney.
He and his co-investors asked a number of lawyers in Marbella to take on their case against the developer but were unimpressed by the legal service and advice. When they were introduced to Jose Dorta, chairman of Judicare, one difference stood out: "The firm was from Tenerife, which meant they weren't part of that 'club' of law firms on the mainland, who all knew each other. They also had a track record of recovering property investments."
Soon, footballing friends of Heaney approached him for advice on problems with their own property ventures, typically in Dubai, Cyprus, Cape Verde and Portugal. This led to Heaney joining forces with Dorta to create the UK-based legal-services firm.
Today Judicare has a growing team of English-speaking, in-house lawyers that cover issues within the Spanish territories. When necessary, it forms bilateral agreements with carefully vetted local legal representatives. Crucially, one condition of its chosen partners is that they have never represented developers in their jurisdiction. For clients, unless they request otherwise, their point of contact remains Judicare, a welcome reassurance given that problems are often down to clients' choice of lawyer when they first decided to buy abroad.
"Many clients used local lawyers who also represented developers, which meant they didn't check contracts were water-tight or that bank guarantees were in place – they were only protecting developers' interests," says Heaney. "This has led to many affected investors developing an inherent distrust of foreign lawyers."
Scenarios facing disgruntled overseas investors include failure to complete a project; late delivery of off-plan properties; projects sold on land not owned by the developer; sub-standard build quality; and disagreements over the right to reclaim deposits.
Invalid powers of attorney are another example, but more specific to the Cypriot market. "Cyprus is different because you take a mortgage at the point of reserving a property," says Heaney. "So you're paying the loan as the developer builds – or doesn't build, as in some circumstances.
"Cypriot developers and their sales agents have given clients a lawyer. The lawyers in most instances – not all – haven't then followed due process and the banks haven't followed their own banking codes, for example, granting mortgages and drawdowns that are not in keeping with the progress of the development. In some cases, all of the money has been drawn down when the project hasn't even started."
Judicare is entering judicial stages with about 60 clients in Cyprus – this number is growing daily. It's taken the firm five months to reach that point.
Proof that it is also possible for out-of-pocket Brits to find, and go direct to, a foreign law firm able and willing to win against local developers is Raquel Perez, of Marbella- based Perez Legal Group. Last year Perez helped an English couple (who wish to remain anonymous) win a case for late delivery. Her clients put down €54,000 on a property in La Linea de la Concepcion on the Costa del Sol in October 2006.
"Our apartment was meant to be ready in April 2007, but our contract had a clause allowing for a delay until October 2008," says the client. "When we got to February 2009 and it still had not been granted a licence of first occupation we terminated our contract of sale. Fortunately, our deposits were guaranteed by a Spanish bank."
The couple asked Perez to represent them when they had difficulty recovering their deposits. Last November their case went to court. The ruling was in their favour, with developer and bank ordered to pay back all their deposits with interest.
"It's quite easy for clients to win a case if the situation is in their favour, and normally this type of case can take between six and nine months," says Perez. "There are law firms who can advise of their [buyers'] situation just by them sending the private purchase contract they signed with the developers .... Before a law firm requests funds [it] should be able to advise completely free of legal costs, until they start the litigation case."
Following the flood of problems resulting from the recent economic turmoil, buyers are increasingly aware of the precautions they should take abroad. Reinforcing this, the Association of International Property Professionals (AIPP), whose members – predominantly agents and developers – commit to a strict code of conduct, has introduced a range of insurances to safeguard buyers in the areas of land title and build quality.
"When a developer goes bankrupt there is little that can be done unless the buyer has taken out insurance to protect in such instances," says Mark Sharp, AIPP's chief executive. "Complementing this, the AIPP will shortly be launching a property trust that will provide a financial safety net for all concerned in a purchase process."
A final piece of advice comes from buying advice website The Overseas Guides Company: "You need to be confident the lawyer you choose is not only capable of but wholly committed to protecting your interests. For litigation cases, while there are excellent wholly independent local lawyers abroad who can help you, you just have to know where to find them."
Obey these rules, and you minimise the chances of scoring an expensive own goal when you buy abroad. Just ask Neil Heaney...
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
Fuel poverty could kill 100,000 vulnerable people over the next 15 years, charity warns
Bargain Hunter: Affordable art - suddenly being a collector is just a walk in the park
Phoenix Life: Chance of a refund for overcharged policyholders has risen
Simon Read: You're guilty until proven innocent when HMRC sends in the tax credit detectives
Simon Read: That's right, BT, they'd rather pay for a free service
- 1 Forget 'The Dress': Here are five of the biggest news stories you might have missed
- 2 The black and blue dress: Makers considering a white and gold version
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 MH370: 'Putin ordered plane to be flown to Kazakhstan space port,' conspiracy theory claims
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...
Day In a Page
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads