Spanish investors 'may lose money'

Last Modified: 16 May 2008
Source: PA News

More than 1,000 Britons could lose money they have invested in Spanish property, a UK law firm has warned.

Jose Maria De Lorenzo, a partner in the Marbella office of Irwin Mitchell, gave the warning after Spanish Property Company San Jose Inversiones announced it was going into administration.

He said the move, known in Spain as 'concurso de acreedores voluntario', could leave as many as 1,500 British investors who had paid deposits to the company unable to complete on their property.

He added: "Once the application to the court for 'Concurso' is accepted and notified by the judges, which we expect to happen very shortly, buyers should be extremely vigilant as there will only be a month to become included in the proceedings.

"Given the amount of documentation that will need to be filed within this time, including the document of representation that people will need to prepare themselves, those affected will need to act quickly to ensure they are not left out of the list of creditors."

But a spokesman for San Jose Inversiones, whose properties include large golf developments in Murcia and the Costa Blanca, said the court application would protect its assets and its clients' deposits while allowing work to continue on two new building projects.

He said: "The well reported credit crunch in the finance industry and its effect on the construction business has affected our cash flow which has restricted progress on two projects.

"As a consequence voluntary administration proceedings were considered as the best financial alternative to overcome the present situation and guarantee the future of both companies.

"Both companies can confirm that the down payments paid by each client are fully recognised by the courts; they acquire the conditions of creditor and are protected under the law.

"The court will send a personal communication to each client in order to confirm the down payments made."

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