Spanish developer springs bad news on investors

The shadow of bankruptcy has been cast over the Trampolin Golf resort development in Murcia, as the developers receive bad news regarding planning permission, struggle to pay off their debts, and have now gone into receivership.

Selling a property in Spain tends to be the hard luck story these days, but the biggest headache here will be for investors who have paid off-plan deposits, who are now added to the list of creditors, and who are not necessarily at the top of that list.

There are many who have invested in off-plan property to buy in Spain, and given the dilapidated Spanish property market, must be holding their breaths in the hope that their developers remain afloat.

The call by many investor groups is that developers off an escrow service, or bank guarantees so that investors remain protected in these worrying times.

As property prices in Spain remain at rock bottom, the best advice for investors is ensure a cash ready position to negotiate the best deals, & consider finished projects or second hand properties to minimise risk.