How to buy a dream without the nightmares

You loved the holiday and now you want to live there. But acquiring property overseas can often be a minefield of unexpected problems. Richard Phillips looks at the help available
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The Independent Online
In The spring, as we all know, people become more than usually susceptible to falling in love - not just with each other, but with picturesque villas and farm houses amid olive groves and vineyards, or apartments opening onto silver beaches and enclosed, private swimming-pools.

How many of us succumb totally and sign on the dotted line for our own personal share of this sort of earthly paradise. is impossible to tell.

But when Spain and the US, just two of the five main countries in which the British buy holiday homes, together play host annually to about 10.5 million of us, it only takes a minute percentage to make a substantial market.

And, of course, it only takes a fraction of that percentage to get things wrong, and before you can say "unpasteurised", anecdotes of disaster begin surfacing over the cheese at every middle-class dinner party in the land.

Getting things right has a great deal to do with adopting the same sensible attitude to buying your holiday home - whether it's in France, Italy, Spain, Portugal or the US - as you would or did when buying residential property here; caveat emptor, only more so. Difficult advice to follow, certainly, when the former seems so ideal on first sight and you wish you didn't have to return to the boredom of the latter, but wise none the less.

"The password is caution," according to Ian Tonge, chairman of the International Sub-committee of the National Association of Estate Agents, and also secretary- general of its European equivalent.

"It's easy to dream, and of the people who go on holiday and think while they're away of buying in that country, I doubt that one in 20 actually does anything more about it when reality impinges back in the UK."

But those who do more than think about it and actually start looking should, he counsels, also make sure they use a reputable company which belongs to a reputable association.

And even then, to make trebly certain, he says, "they should not sign anything until they have got back to the UK and have talked to someone who's a reputable specialist, with relevant knowledge of the country concerned."

What this means is the law, and remembering the one thing which is so obvious that even intelligent people can overlook it: that each country has a different legal system.

"In Spain, for instance, " says Mr Tonge, "money owed for a motoring offence can be charged against a car, but almost any other debt can become a charge on property, so if they're not careful, people who think they're buying property alone can be taking on hidden debts as well."

But this is, as he says, "a very big subject", and any summary, however sound the advice it contains, is bound to beg a questions or two. Such as: how can one tell, when one's there on holiday, which property companies or estate agents or firms of lawyers are reputable, and by whose standards? And when one is back here, still keen on the idea but wondering if it's crazy, how does one find the specialist one needs?

"In fact, in most cases," says Patrick Dring, who heads the international wing of estate agents Knight, Frank, "the the decision process starts not with the holiday people are now on but with previous holidays or family connections.

"And if that's so, the best advice is, first, to look at the Sunday papers for advertisements and the names of agents. Collect as much information as possible about the area you're going to before you go - and make your local contacts and appointments from here, having prepared the ground."

From where he sits in London, he says, and depending on how much you know about your chosen country, or how much you have looked at property there, he can put you directly in touch with just the sorts of people you need to see .

In Tuscany, they can lead you to farmhouses which, as wrecks requiring the almost same amount again, can cost pounds 250,000, or finished properties costing up to pounds 5m; in Marbella, to apartments costing pounds 80,000 or villas up to pounds 3m; and in Portugal and the South of France to bits of real estate whose cost bracket is presumably not dissimilar.

All of which begs further questions: can one afford so much, or can't one spend less? What if one hasn't been there before and hasn't had time to do previous research? And what if one wants to get away from Europe, to the US?

"The US is a different ball game," says Tonge. "Not only is the law different from here, but it can differ state by state and county by county . In Florida, in some counties, for instance, you can buy property but you aren't allowed to let it."

And whereas you can spend as long as you like at your holiday home in France or by the Mediterranean, you're limited to 90 days at a time in the US, unless you're fortunate enough to qualify for a longer-stay visa.

But, as a starting point for names and telephone/fax numbers, the US also has a National Association of (what Americans call) Realtors, which has a library at its office in Washington DC. Most states also have their own associations of realtors, whose firms are licensed by what are, in effect, commissions of departments of state government - the Real Estates Division in Florida, for instance.

As a backstop, or alternative starting point in the UK, you can also go through the National Association of Estate Agents' "Home Link" service, which plugs into its national counterparts not only in the US, but France and Spain.

On the question of what you can afford, in any of the European countries at least, you can, according to Ian Tonge, pay as little as pounds 30,000. Then, against the possibility that it may prove in future to be a good investment, you have to balance present rates of exchange, varying stages of recovery from recession, legal fees, wear and tear and accessibility - travelling to and fro, from the nearest port or airport to the most convenient destination.

This, he says, is one of the reasons why the Balearics tend to be especially popular with Mancunians, the Algarve with the Welsh, and Italy and France with people from the south of England.

And as some of the UK's bigger mortgage lenders have opened offices in France, Italy and Spain, there is a growing possibility of British borrowers being able to borrow to buy there.

But not yet - maybe in a year or two, says Mike Spence, assistant general manager overseas of the Halifax, which has branches in Madrid and Barcelona and is opening another in Seville in April. "We think the best way in is to serve the main market for Spanish buyers first, and once we've got the expertise, then apply it to the British there."

Until that sort of accustomed British facility exists, prospective buyers of holiday homes in any of these five countries would do well to heed the opening paragraph of a booklet, How to buy a home in Spain, Step by Step, which is published, in English, by the Spanish Professional Association of Real Estate and Mercantile Registrars.

"In Spain," it says, "real estate fraud... is statistically insignificant... and because the direct cause is misinformation or lack of information, the preventive measure par excellence is information."

And to get that basic information, you can do no better than follow the advice given by Claire Wills of the Law Society, which has a list of solicitors conversant with the law in different countries: "Regardless of any other legal services you may be offered by the sellers, instruct a solicitor of your own here who is conversant with the law of the country concerned, and find a good notary to act for you there."

Oh, and by the way - although, presumably, this solicitor will also be conversant with whichever legal language is on the documents - don't forget one last precaution. In the words of a buyer in France who would otherwise have been bound to let all the locals bring their apples to her no-longer existent cider press: "Remember that ignorance is no defence. So get a licensed translator so that you know what you want struck from the deeds and understand what you're signing."

Then, even if your enthusiasm fades later, you won't have provided more fuel for Chinese Whispers over the dinner party cheese course.

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