SPANISH POLICE

Few matters are more confusing initially to someone coming to Spain than the array of police forces encountered around the country. It can be difficult to know who to go to when you are in trouble and why one police force will attend a crime in one place and another elsewhere.

In fact, essentially, Spain has three police forces: the Guardia Civil, the Policia Nacional and the Policia Local - each of which has its own specific area of operation and clearly defined working parameters. However, in reality, only the Guardia Civil and Policia Nacional have the extensive powers and resources that would be recognised of a police force in the UK.

The common misconception amongst many foreigners is that the Guardia Civil is some kind of arbitrary para military force with extraordinary powers - that roams around Spain like some brutal phantom there to terrorise all and sundry. In fact, the truth is far more mundane.

The Policia Nacional and Guardia Civil are both ‘conventional’ police forces and perform almost identical tasks, albeit with remits that are essentially demographic. Crudely, the Guardia Civil is a police force that operates only in the countryside and in towns with a population of under around 20,000 people. By contrast the Policia Nacional is responsible for urban areas over approximately 20,000 people.

So, if you are the victim of a crime and you live in a small town or in the countryside then you will be attended to by the Guardia Civil who will protect you or investigate any crime - just like any professional police force. However, if you live in a town of over some 20,000 people than it will be the Policia Nacional that will perform all these functions. The investigatory functions, powers and resources of both the Policia Nacional and Guardia Civil are, to all intents and purposes, identical.

Under normal circumstances some 40% of the Spanish population live under the protection of the Guardia Civil, although this percentage rises to around 65% during the summer holiday season - when many urbanites leave the towns and cities.

The Policia Local, meanwhile, is a force which is recruited, funded and controlled by local town halls and that is responsible to the elected Mayor (Alcalde). The Policia Local respond to minor crimes and mostly deal with local authority enforcement matters, together with urban traffic control and any associated violations. Crimes are not investigated and any serious matter is immediately handed over to either the Guardia Civil or Policia Nacional as appropriate to the area.

Of course, typically, there are exceptions to the rules above. The Basque country, Catalonia and Navarra all have their own regional police forces in place of the Policia Nacional. Furthermore, Spain has an intelligence service (with whom, hopefully, you are unlikely to come into contact!) called the Centro Nacional de Inteligencia – the CNI - which, unusually, deals with both inland and external intelligence matters.

On a day to day basis, most expatriots tend to find the Guardia Civil and Policia Nacional helpful and efficient if, sometimes, a little remote and macho. Certainly, they have a reputation for dealing with trouble in a no-nonsense fashion and it is unwise to be aggressive towards them. Meanwhile, Policia Local officers are usually charming and often provide considerable assistance to tourists and foreigners.

EMERGENCY TELEPHONE NUMBERS

For all emergencies call: 112
To report a crime: 902 102 112
For the Guardia Civil: 062
For the Policia Nacional: 091
For the Policia Local: 092
Medical Service: 061
Spanish Fire Service: 0801

THE SPANISH PROPERTY MARKET – WHAT NOW?

Recently an influential annual report was published by Acuna & Asociados who are highly regarded Madrid real estate analysts. Their report makes depressive reading given that they do not think the Spanish property market will recover for several years. Indeed, at current rates of demand (around 200,000 properties per year) it may take some six to seven years to clear just the existing housing stock for sale.

Certainly, there is an inordinate amount of property for sale on the Spanish marketplace. According to Acuna & Asociados there are some 1.67 million properties for sale in Spain. These comprise some 500,000 new builds, some 470,000 new builds yet to be completed and around 500,000 re-sales. It is quite likely that the estimated number of resales is very conservative given the amount of properties privately for sale that will not be registered formally anywhere.

Meanwhile the Spanish economy is in meltdown. Unemployment is currently somewhere around 19% with Citibank predicting that it will rise to 22% and Acuna & Asociados to 25%. The collapse of the Spanish construction industry has impacted not just on its associated industries but on the population at large who have been caught in a lethal vortex. As more people lose their jobs so more properties come onto the market - often with distress sale prices.

Unfortunately, there are no apparent ‘quick fixes’ for the Spanish economy which is also being hurt by the world credit crunch. Socialist Prime Minister Zapatero has tried to stimulate the economy with his much publicised Plan E (see my 14th August Blog). However, this is due to cease soon due to lack of further funds and has done little other than reduce the very short term unemployment figures. These will, obviously, rise once Plan E stops and as Spain goes into the winter period when any tourist related employment reduces radically.

So, what does all this mean for Spanish property buyers and sellers?

Well, as a seller of Spanish property, it is obviously bad news – particularly if you bought within two years or so of the boom. In this case, it is unlikely that you will recover your money for some considerable time to come. Worse still, the sheer quantity of other properties for sale (including many genuine distress sales) means that you will be entering a savagely unforgiving market place. Indeed, the only consolation (for British sellers) will be the strength of the Euro over Sterling which may mitigate any drop in their Euro sale price.

As a buyer, of course, matters are very different. Virtually everything is for sale and you can now pick up bargains throughout Spain almost everywhere you look. However, this does not mean that you can be careless. Far from it. Indeed, uppermost in your mind, at all times, should be the adage that ‘not everything that is cheap is a good buy’.

In fact, you should not even think of buying unless you know intimately how to tell whether a property is fully legal or not. Furthermore, you must be able to assess objectively what will make a long term sound investment (see my book How to Move Safely to Spain).

As always, the key to a sound investment is its ease of resaleability. However, establishing resaleability is often less easy than it sounds when you are in a foreign country with a particularly complex marketplace involving not just native buyers but also a very significant proportion of foreigners from an array of different countries.

Without doubt, the Spanish property crash has produced some excellent bargain buys. These exist now and are well worth exploiting. However, the question is whether property prices in Spain have now reached their bottom?

My own feeling is that prices still have around 10% further to drop. This will be an unpopular ‘call’ but the sheer numbers of property currently for sale together with an economy in freefall means that any optimism at the moment is hard to justify objectively. At the end of the day property, like any other commodity, is subject to supply and demand and at the moment, there is far more supply than demand. Until this readjusts, prices will continue to drop and the Spanish property market will remain very weak for the forseeable future.

Of course, if you are thinking of buying a Spanish property then your next question may be ‘when will it be a good time to buy?’

Well, I cannot help feeling that the desire to make untold money on property is somewhat distasteful. Surely, the primary aim of moving (particularly to a foreign country) and buying a property is about obtaining a better quality of life than you have currently - preferably as soon as possible? To place life ‘on hold’ whilst waiting for a market to guarantee a ‘profitable’ investment seems somewhat short sighted given life’s brevity and uncertainty.

This is not say that you should not be very careful. However, now I think the emphasis should be on buying a property that will retain its value long term – as opposed to being purely focussed on the profit that it will, or could, make. Those days, in Spain, are, for the time being, largely over. That does not, in any way, diminish the valid reasons for coming to Spain which should be about delighting in the genuinely superb quality of life still on offer. Little has changed in that regard – it is just that combining this with a guaranteed short term profitable property investment is less valid.

In short, I suspect, that the prices of Spanish property will hit their low point probably in the spring of 2010. However, that is not to say that you cannot now pick up a heavily discounted property - and one that will prove to be a good purchase for the future. If you are planning to move to Spain then, give or take, this is about as good a time as any. However, be prepared to drive a hard bargain - as I believe that the market has some time to go before it stabalises...1

HEALTH CARE IN SPAIN

Ten days ago I received a request from a media company for an article about health care in Spain to expand upon what I had written in my recent book ‘How to Move Safely to Spain’. By chance, within a couple of hours, I was taken into hospital with a potentially life threatening illness - making my writing commission nothing if not ironic!

In fact, this was not the first time that I had been forced to request treatment from the Spanish health care system. Previously, a major road accident had resulted in my wife and I being taken into the A&E department of our local hospital and my daughter has had emergency attention from the local children’s clinic (apart from the normal array of vaccinations etc.). On each and every occasion we have been stunned by the professionalism of the service that we have received.

Spanish State health care (we do not have private health insurance) has been nothing if not impressive. Indeed, along with ex-patriot friends of ours, we would claim that the service provided has been better than we received in the UK.

Certainly, the Spanish state health care system is extensive. There are some 800 hospitals and 2,700 medical centres (Centros de Salud) throughout the country with almost every village having a doctor (medico) who will attend his medical centre daily (even if it is just for a few hours before he goes to the next village or district). Normally a nurse (enfermera) will be in attendance and sometimes, as a patient, you can see your Spanish doctor, the same day.

Importantly, children under the age of fourteen are treated in specific children’s health centres in Spain which are staffed by specialist paeditricians. These are normally located in the nearest town of any size and provide expert care for children.

Meanwhile, there is a network of Spanish hospitals with accident and emergency departments (urgencias) throughout the country which operate in a very similar way to that of the UK. You are normally seen by a member of the triage staff promptly and then treated as quickly as necessary given your degree of injury. Any follow-up treatment (such as I needed) is undertaken by the hospital - who arrange nursing visits together with any requirement for transport to and from the hospital.

Of course, Spanish health care is not ‘free’ just because you are an EU citizen despite a common misconception to the contrary. For ‘free’ state health care you need to be tax resident (paying tax or making an annual tax return to the Spanish State) or a pensionista (over 65). Merely having an NIE number or inscribing yourself on the Central Register of Foreigners (Centro Registro de Extranjeros) is not sufficient!

If you are over 65 or tax resident than you will need to obtain a SIP (Sistema de Informacion Poblacional) card. This is your individual Spanish health card and is needed whenever you attend a Spanish doctor or hospital. It is something that you can apply for yourself or (more easily!) through the services of a gestor.

Naturally, one of the major problems for foreigners with regard to the Spanish health service revolves around language – or the lack of it in the case of many foreigners. Interpreters are not supplied in Spanish state hospitals or clinics and fluency in English can never be guaranteed amongst Spanish medical staff. However, this is not necessarily an impediment to using Spanish State health care as usually interpreters are available within most communities – particularly those with high density foreigners. For a modest fee, you can normally find someone who can attend any appointment with you and translate your problems and the anwers of your Spanish doctor.

Of course, Spain has private health facilities (a minority of Spaniards use them) and most major health insurance companies have policies that cover Spain. In addition, in many large towns there are ‘walk-in’ Spanish private medical clinics that also have beds and sometimes an A&E capacity. So, if you choose not to go the Spanish State health care route then you should easily find adequate medical cover for all your needs.

As for us, we have had no regrets in using the Spanish health system. Any system that was able to provide a check-up from two consultant paeditricians, a full head scan and the results (as was done for my daughter) within four hours is good enough for me! Equally, the treatment that I have received over the past ten days has been beyond criticism and a tribute to a system and staff that that would be hard to better.

From the above you may come to the conclusion that we are an unhealthy family! However, this is far from the truth and our life in Spain has been remarkably free from ill health. Indeed, few houses in Western Europe have fewer pills and potions than ours and trips to the doctor are extremely rare.

In fact, this is consistent with Spain being a healthy place within which to live. It evidently has the greatest longevity rate for women in Europe and the second longest for men. So, hopefully, any use of the Spanish health service should be minimal. However, should you need it - be assured that it works and, at its best, is superb.

Finally, it would be churlish of me not to publicly express my gratitude to the staff of Gandia (Valencia Province) hospital and health service for their excellent treatment of both my family and (most recently!) myself! Well done - and many, many thanks...1

FINANCIAL DISCIPLINE IN SPAIN - 6 CRITICAL GUIDELINES

When it comes to finance, the secret of moving to Spain is to:
1. Under-spend on any Spanish property.
Set a budget and make it less than you can afford and then keep to this figure. Be disciplined and remember that long term an inanimate object (even a lovely Spanish villa) will not guarantee you happiness. Financial problems, on the other hand, are absolutely certain to provide you with heartbreak and intolerable stress.
2. Avoid any borrowing - whether mortgages or otherwise.
Keep your fixed costs and overheads to a minimum. For someone relocating ‘cash is king’ – unless you are financially very sophisticated.
3. Budget for the worst possible income return on existing investments or pensions.
As 2008 showed, Sterling can crash (in 2008 almost by a third to the value of the Euro compared to a few years previously). Equally, the value of pensions and other investments can drop as radically as they can rise. Nothing is absolutely certain and you must build in a conservative factor to your anticipated long term income. Make sure that you can survive comfortably should your predicted income drop by 20% - 30%
4. Be precise about the Spanish property you buy.
Make sure that your new home will be right for you and that you will not have to move again. The costs of buying property in Spain are considerable (around 10% of the purchase price) and Capital Gains Tax is payable (with exceptions) on the sale of your Spanish property whether it is your main and primary residence or a second home. If you buy a property in Spain that is not suitable for some reason and then sell up and buy again in Spain then you will have lost:
- At least 20% of the gross value of the properties bought (2 x 10% purchase costs).
- Any money payable as a consequence of Capital Gains Tax.
- The fees due to any estate agent.
- The ancillary costs of moving (removals etc.).
This is a fine way of wasting a lot of money very quickly.
5. Allow at least three years for any work in Spain or new business to start providing a satisfactory income.
Businesses are invariably much slower (irrespective of the country!) to produce a proper income than ever first anticipated. There are exceptions, of course, but be very pessimistic on your predictions about the expenditure involved and the time it will take to receive a viable income.
6. Put aside a contingency budget for unexpected problems
Unanticipated difficulties occur when living in Spain (as if with any country) as surely as ‘night follows day’ and just as certainly they involve expense beyond that ever considered. So, always ‘ring-fence’ several thousand Euros as a contingency budget - to be used only in cases of emergency.1

NEW SPANISH PROPERTY - ‘OCCUPANCY PERMIT’

First Occupation License

It is absolutely essential that your new build property in Spain is granted a Licencia de Primera Ocupación (sometimes referred to as a ‘Certificado de Habitacion’ or ‘Cedula´) before you pay fully for it. This vital certificate is granted by the local town hall planning department upon completion of a Spanish new build and declares the legality of the property in Spain. Also, it acts (in theory) as confirmation that the Spanish property meets all necessary local and national planning regulations.

If your newly built Spanish property, when completed, does not have a Licencia de Primera Ocupación (sometimes referred to in English as a First Occupation License - FOC) then ‘alarm bells’ should ring! One sign of this is when a Spanish property is not connected to mains utilities (water, electrics and telephone). This is known sometimes as being on ‘builder’s electrics and water’ - which is an accurate phrase!

Indeed, your property in Spain may literally have its services connected to those of your builder rather then the services suppliers. This is usually obvious but can be proven by the fact that you will not receive or be able to obtain any formal services bills.

Certainly, by Spanish law, utility companies cannot connect their services to illegal properties in Spain. If they do they can now be fined heavily. So, services suppliers tend not to connect to illegal properties - when in the past (pre-fines) they turned a ‘blind eye’ to the law.

So, if your new Spanish property lacks a mains supply of electricity, water and land line telephone then you should take this as a potential sign of illegality. At best, it may indicate that there are delays with regard to legalisation or final completion of your Spanish building project.

Note that sometimes personal registry on the local ‘Empadroniamiento’ can also be affected by a lack of a First Occupancy License.

Being on ‘builder’s electrics and water’ used to be laughed off and was tolerated by many buyers of new properties in Spain. Frequently these people were told that it was ‘quite normal’ and would be ‘sorted out soon’... However, some found out later, to their great cost, that the underlying reason for this seemingly ‘innocent’ delay was related to the far more serious and worrying issue of illegality. So beware...

Note that failure to supply a Licencia de Primera Ocupación constitutes a breach of contract on the part of the seller. Indeed:
· You are not obliged to sign the Escritura (UK ‘Completion’) until the Licencia de Primera Ocupación is presented.
· Your seller cannot cancel the contract on the grounds that you refuse to sign the Escritura without the Licencia de Primera Ocupación.1

OLDER SPANISH PROPERTY - 6 REASONS TO USE A BUILDING SURVEYOR

Despite what is often said to buyers by unscrupulous agents, you should always employ a properly qualified building surveyor to survey your intended property in Spain (whether it is new or old).

Below are some of problems that can relate to older Spanish properties...

Subsidence
Just as for new Spanish properties, older Spanish housing can be affected by subsidence. Whilst a Spanish property may show few signs of movement in its early years, long term ground erosion, seasonal shrinkage or heave (often amplified in a rare very wet or very dry year) can reveal problems suddenly. The attempted cover up of such issues is quite common. However, often it will take an experienced building surveyor in Spain to identify any tell tale signs of past or ongoing structural movement.

Retaining wall movement and failure.
Many older Spanish properties are as reliant on the stability of sound retaining walls as new builds, particularly if the slope into which the property is situated was ‘cut’ out of a hillside. Certainly, the very attractive cut stone walls seen in many coastal areas are not normally proper retaining walls but simply a method of ‘decorative’ facing. This may be despite the fact that a hillside is highly prone to movement.

Rot and insect attack
Advanced attack is common in older Spanish properties. The most common oversight made by buyers investing in older Spanish town houses and Spanish country properties is the fact that the timbers are of softwood (and not the oak we commonly expect in very old UK properties). These are often infested with woodworm, termite and other wood boring insects.

Reinforced concrete steel decay risk
The process of steel reinforcement decay can be slow and is therefore always more prevalent and advanced in older Spanish properties. Steel decay can result eventually in structural failure in elements such as floors and even whole Spanish apartment blocks have been known to fail. Normally, professional inspection will identify initial signs of an issue such that repairs can be made. However, these repairs are invariably expensive and complicated and advanced decay can mean that substantial rebuilding is required. In some cases the concrete itself may be sub standard or even mixed up with salt water and beach sand in coastal locations (observed in very rare cases).

Swimming pool defects
Older pools can, on occasion, be very well built and are sometimes based on converted water deposits. Nonetheless, many suffer structural issues in the long term, which can be expensive to resolve. A typical problem is often time expired, galvanized iron pipe work. This eventually decays and leaks which can, in turn, cause erosion of the supporting substrates.

Defective services
Old drains can be broken and septic tanks insufficient for all-year round use. Equally, iron pipe work can be corroded and even some apparently re-plumbed properties are connected sometimes to hidden iron elements. Re-wiring is sometimes needed and some gas installations can be very dangerous.

Note that legally if you find any significant defects that have been deliberately hidden by your seller within 6 months of purchase then you may have a case for compensation against your seller. However, this can be very difficult to prove and it is always better to try and identify any issues by consulting a building surveyor in Spain prior to purchase.1