AN IRISHMAN lost his Marbella property recently – and didn’t know about it until after it had been sold by a Spanish bank. Thousands more could also be at risk of losing their foreign holiday homes if they don’t keep up their repayments and ignore letters from their lenders abroad, warns Dublin solicitor Tom McGrath.
McGrath, who specialises in advising people with foreign property, fears that a lot of Irish buyers will be as foolish about what to do when things go wrong as they were about buying in the first place.
“There’s an amount of people coming to me in tears; one woman told me she hadn’t been making repayments on her property. She was shocked when I told her it might be gone. And it’s no defence to say you didn’t know because the post was going to your home abroad – you must have someone collecting it for you.”
The banks dealing with the man from Marbella, for example, said that they had served all their formal notices before moving – perfectly legally – to sell his property.
It might be tempting to hide your head in the sand if you’re in financial difficulties, but very foolish, says McGrath: even if you’re willing to forget about your place in the sun, a bank abroad might come after you for the difference between the price it gets from selling it and the balance you owe.
“And yes, they could get a judgement against you in court in Ireland.”
That’s the bad news: the good, says McGrath, is that “feedback from banks in Spain, for example, is that the last thing they want is to take properties, they want to come to some arrangement.”
He believes that’s also true in countries like France and Portugal popular with Irish buyers.
An arrangement might include interest-free repayments, or reduced capital repayments for an agreed number of years or extending your mortgage, adding the shortfall on at the end, he says.
McGrath does believe that in the long term, the Spanish market – which collapsed as dramatically as our own – will revive. “The sun won’t go away.” And you might be able to hold onto your place in it if you face the music now.
