Suntan Lotion is NOT Adequate Protection

How to ensure peace of mind and security in your property purchase

Perhaps it is the warm sun that fries the brains of us northerners, but it seems that many of us seem to throw caution and common sense to the wind when we come to property buying in Tenerife.  We happily slap down thousands of Euros in deposits for properties, without a care for the security of our hard won cash.  We blithely accept a salesman’s patter… after all, he’s a nice chap and we met him by the pool… he’s bound to be telling the truth.  Back home, on familiar ground, we are different people.  But as the temperature rises, so does our gullibility.  Many people have learnt the hard way, that suntan lotion does not provide adequate cover for all eventualities.

Even the most canny of us can still get caught out.  We (quite rightly) insist on having all the salesman’s claims in writing and proper receipts for deposits.  But in reality these are not worth the paper they’re written on if, for instance, the agent closes it’s doors.  This recently happened with one long established agent who made off with literally hundreds of thousands of Euros in client deposits.  I’m sure they all had correctly made out receipts, but that’s little consolation now, because their money has long gone and all they can do is file a police report.  This was an agent with big adverts in all the newspapers – a seemingly solid and permanent organisation.

Estate agency here is a deregulated industry, and as such it means that almost anyone can set up their own agency and start selling properties to the unsuspecting public.  Even using a company that has traded here for years is no guarantee of security.  As we have already seen, all it takes is a bad year or maybe a change in personal circumstances and that seemingly solid agent can do a moonlight flit.

Even more common than the disappearing deposit is misrepresentation or omissions by the salesman.  Sometimes this can come about because an agent is lying, desperate to make a sale.  But it can even happen with a scrupulously honest estate agent.  Here’s an example.  You are buying a property ‘off plan’.  The specification list tells you that there will be air conditioning, or maybe marble floors.  When you come to take title you discover that there aren’t.  The salesman acted in good faith, but the constructor changed the specifications half way through the project.  The constructor’s building guarantee does not come into effect, because the floors are technically faultless.  You could hire a lawyer and spend a few years in court, and maybe you’d win.  Maybe you wouldn’t.  You are stuck.

At the end of the day, there is only one failsafe way to protect yourself from all these problems, and that is insurance.  The type of policy is called ‘Professional Indemnity Insurance’, common in other countries but a rarity here.  It’s rare because insurance companies like to minimise their risks, so they won’t ensure an agent without a proven track record and effective systems and practices in place.  It’s also rare because it is expensive for an agent to take out.  But from a client’s perspective, it is the only way to guarantee the safety of their deposits and the information that an agent gives them.

The best advice you can be given for your own peace of mind and security is to ensure that the estate agent you’re dealing with is covered by a Professional Indemnity Insurance.  If they haven’t got one, find someone who does.  Don’t let the relaxed atmosphere and shining sun distract you… and make sure you’re covered by more than suntan lotion!