The Court orders the demolition of the ruins near the Es Trenc beach at the south coast of Mallorca.

Since 1995, the 13 half-finished buildings contain 68 apartments spoiling the small village Ses Covetes with its popular sandy beach of Es Trenc.

With this decision, announced by the Higher Balearic Regional Court on November 15th 2012, closes a year-long legal dispute. Several court rulings confirm that these houses were built too close to the beach. At the time, the construction was stopped after the intervention by the Environmental Protection Association GOB



Read More

Majorca Villa new construction 400m to the beach - price reduced

The new Mediterranean villa with private pool is located just 400m from the sandy beach and the marina Sa Ràpita away. Marble floors and fine bathroom materials, oil central heating, air-conditioning warm/cold, spacious living and dining area, large kitchen, guest bathroom with shower, 3 bedrooms each with en-suite bathroom and a roof terrace with sea views.

The entire house is cellared and the underground garage has space for several cars.

The purchase price has been reduced now to € 539.00,-

If the notarial certification takes place before the 31.12.2012 the transfer tax is only 4%. From the 1.1.2013 it will be 10%.

To the exposé on our website Azur Mallorca >>



Read More

Touristic rental of Mallorca Properties

The market

In 2011 about 10 million tourists came to Majorca, 4,2 million of them from Germany. For 2012 there are signs of a historic record with an increase of 4 percent. The hotel sector on the island offers a wide range from simple hostels to luxury hotels. This area has been expanded this year beyond the previously represented 5-star segment of the island with the opening of the Jumeirah Port Sóller Hotel & Spa. But the number of tourists who for various reasons don’t book a hotel, but prefer to rent a private holiday home, is increasing continuously in Majorca. With the exception of large families or groups, the idea of saving money is not the reason, because All-inclusive packages in the intermediate category are priced lower than a good holiday home. The motive is rather a holiday experience of a higher quality without the corset of uniform procedures in the hotel and thus more freedom in the vacation planning, as well as sufficient space and privacy. Of course do these individual travelers expect a holiday home of impeccable quality in an appealing environment with high relaxation and leisure possibilities.

The added value

The reason for the owner of a Majorca property to give his real estate in touristic rental is the expectation of a solid return, which is making this business model also interesting for investors.
But even the mix of rental and owner-occupation is economically very interesting and for the majority of the owners the preferred option. After a short initial period and if the owner-occupied periods are not moved massively in the peak tourist season, one can generate a net return of 4% of the total investment even with mixed use.
Legal requirements
Was there yet no absolute legal certainty for the touristic rental of private living space, this area is now clearly regulated by  the Tourism Law of the Balearic Islands n° 14.884, law 8/2012 of the 19.7.2012. The passages which regulate holiday stays in private homes are located in the articles 49 to 52. The law explicitly allows the rental of detached or terraced houses if they meet the regulatory minimum requirement. One of the prerequisites also implies that for both, the property and the distributor, a declaration of Responsibility was filed in the appropriate registry of the Ministry. If this is not the case, then the rental is illegal and punishable with severe penalties. For holiday apartments, the rules are more complex, but achievable with expert help.

Practical course – our service

We offer to all of our clients, which we accompany currently in their search of a Majorca property and which are interested in the touristic rental of their real estate, expert and free advice on the above subject. This of course also applies to customers who have already purchased a property through our agency.
Apart from the legal aspect, it is of course also necessary to consider whether the property is attractive for holiday rental and how the relation between the purchase price and rental income is appearing. An important factor, of course, is the costs and not least the competitive situation of the location. For logistical reasons we can only assume the complete rental service at the south coast of Majorca in the region around the beach “Es Trenc”.

To the beach video >>
In the article House buying-plus you can find a detailed service description for our clients, who purchase a property in Majorca for own and/or rental use.
Friendly greetings from Majorca
Franz Stockinger

Read More

Purchase of real estate companies from now on with transfer tax.

Was previously a property for more than 3 years in the possession of a S.L. (Sociedad de Responsabilidad Limitada), namely a company with limited liability according to the English Ltd., so was the purchase or sale of the property exempted from the transfer tax, provided that on the buying side none of the shareholders kept more than 50% holdings of the company.    

 

The transfer of ownership of the property took place in the form, that the purchaser or purchasers did not buy theproperty, but by a so-called share deal acquired 100% shares of the owning company.

Although this method has not been applied at any time by the broad masses of property buyers, business experienced buyers or those with appropriate legal assistance could so far save a lot of money in this manner.

Thus this is now past.

By law n° 7/2012 from the 29.10.2012 the exemption from the transfer tax when buying shares of a real estate-S.L. has been abolished with immediate effect.

Exceptions are made when it does not concern a purely real estate company, but a business such as for example hotels. Here the share deal is exempt from the transfer tax even if the majority of corporate assets consists of real estate.

Read More

Delicate clauses in the purchase contract of your real estate in Majorca

When buying a property, ever again occur situations which require special contractual formulations. Generally they are useful and some of them even indispensable. And yet they require special attention from the contract partners. One of these components of the contract is the “cláusula resolutoria”, which in the broadest sense means “cancellation clause”.

The clause describes under which conditions a counterpart has the right to cancel a concluded contract unilaterally or to reverse the transaction.
In practice, it looks like this: the offer of real estate in Majorca is large, but it frequently happens that there is nothing appropriate among the properties which are ready for occupation. So the seeker decides to buy from a developer a property which is not yet finished. The building permission is already present and it does make sense to conclude a notarial sales contract, which refers to the finished property. The buyer already pays a reasonable part at the notary and in return he will be entered in the land registry as the owner. In order that this first payment is really reasonable, it should approximate the following value: Land value with development costs + costs of the building permission including architect's fee for planning application and design plan + value of the construction at the time of payment. By now the buyer is already registered as the owner, but the final transfer of ownership takes place after the full payment of the agreed purchase price.
Now there is a risk for both parties and the contract must be edited to ensure that this risk may not lead to a financial loss.
For the buyer of the property the risk is that the developer or the building contractor might not be able to finish the construction or, under certain circumstances, might not want to finish it. Therefore the buyer adds a “cláusula resolutoria” which is formulated such, that in this case he can terminate the contract with the developer to let finish the construction from another contractor. If the contract was edited correctly, the buyer should have paid just what was already on the property and will not suffer any (or just manageable) financial loss -  inconveniences apart.
For the seller, so the construction company or the building contractor, the risk is that the buyer will  not finish paying the house – because he might not be able or because he might not want to. So he also covers himself against a claim by the “cancellation clause”. By loss of value due to construction defects that clause naturally does not come into effect and if no agreement is reached, one must go to court.
In both cases described, this clause is a useful and reasonable solution and should not require any further explanation. Why then do I call them “sensitive” clauses? Well, they are integral part of the notarial contract and are therefore also recorded in the Land Registry. The experience of many years of practice has led me to deal with this subject.
The main problem is, as described in an article elsewhere in this blog (Why isn't my property registered in the Land Registry?), in the popular belief that certain things get regulated by themselves. But they do  not.

In the case described here, more often than not the construction is finished. The buyer makes his purchase price payments on time, moves into his home and ready.
Everything fine, but the “cláusula resolutoria” still remains in the Land Registry and will stay there until the filing of a deletion certificate.
If the developer is working properly and/or if the buyer has a professional help at his side, a lawyer and/or a good broker, then the final payment will be made only against the issue of this deletion document.
However, in practice I come repeatedly across not deleted clauses when homeowners approach me after years to offer their Majorca property for sale. If things go well, the construction company still exists and the homeowner has kept the payment receipts - the problem will be solved quickly.
It becomes problematic when the development company no longer exists and there is no legal successor. In practice this happened last year.
The deletion certificate can only be issued by the beneficiary of the clause, thus the developer - or by a court. In the above case remained only the second option, because the German property developer was insolvent for years already. So seeking the proofs of payment and hiring a lawyer. He will take legal action at the local court for the cancellation of the “cláusula resolutoria” and if within the required period there is no objection brought before the court, the judge can also issue the deletion certificate and the entry in the land register is cleared. The duration of this action is up to one year and several thousand euros (avoidable) costs.

Read More