AIPP BUYERS GUIDE

THE INDUSTRY VOICE. THE INDUSTRY BODY. THE INDUSTRY STANDARD.

HOW TO BUY OVERSEAS PROPERTY SAFELY

14TH EDITION

IN ASSOCIATION WITH

ADVERTORIAL

INLAND PROPERTY SPECIALISTS

Country Fincas is a fully legal and long- recommend a local lawyer who are planted with vines, almonds established real estate agency specialising speaks your language, help with and olives. In February the your mortgage application, etc. fields are filled with pink almond in rural property in the inland regions of Our experience, fluency in the blossom. Alicante and Murcia. Spanish language, network of Pinoso has many bars, local experts and extensive local restaurants and shops, a new 24- knowledge has proved invaluable hour medical centre, dentists, two for many of our happy new home primary schools and 1 secondary he company was and Hondon Nieves, Fortuna, owners. school, a theatre. There’s an founded in 2009 Yecla and Jumilla. We offer a full after sales excellent Sports Centre with T by Karen and Our name is Country Fincas service, helping to make the outdoor swimming pools, tennis Brenda and we but we sell all kinds of properties! transition to Spanish life that little courts, football pitches and have a registered and licensed We sell Fincas, country houses, bit easier. Our dedicated, team gymnasium, library and many office in Pinoso town centre. Our villas, town houses, land and live in the local area and can offer other facilities including a customers can have confidence apartments. help and advice on all aspects beautiful picnic area among the that we are an official, trustworthy We listen carefully to our of life in this traditional Spanish pines, complete with barbecues, and permanent part of the customers and aim to match community. seating areas and running water. community. you to your new home quickly At a position of 450 meters and efficiently, we are happy to Pinoso above sea level, the countryside • We have a multilingual team show you as many properties as The beautiful and thriving town provides a contrast between the here in Pinoso. necessary in order to find the of Pinoso is approximately 45 green pine groves of the Sierra • Karen, Brenda, Maggie right home for you. We know each minutes inland from Alicante del Coto and the white soil of the and Callum speak English and every one of our properties and the white beaches of Costa vineyards growing the Monastrell and Spanish personally so we can answer all Blanca and close to the Murcia, grape and produce highly-rated • Marieke speaks English, your questions in detail. Alicante border. red wines. Rose, white and Dutch, Flemish and French It has a population of just Fondillon dessert wines are also • Jan speaks German, Dutch Don’t worry we help under 8,000. Pinoso, also known produced and form part of the and English. you all the way! as El Pinos is named after the ‘denominacion de origen’ wine We are here to help you find pine trees that cover the areas area of Alicante. We have a portfolio of more than your dream home and assist you mountain ranges. Pinoso provides The two main airports of 700 properties in the Alicante throughout the buying process to a Spanish rural lifestyle, no Alicante and the new Murcia and Murcia regions and we cover make the process as smooth and traffic lights, hardly any traffic, airport are both 45-minute drive. the towns and villages around stress free as possible. practically the only jams are For Golfers there are several Pinoso including Sax, Salinas, We can arrange your NIE, caused by the tractors taking the established and famous courses Elda, La Romana, Hondon Frailes open a bank account for you, grapes to the Bodega. The fields with 40 minutes. . | AIPP

Contact Details Office: 0034 966 180 624 | Mobile: 0034 630 976 105 | www.countryfincas.com | [email protected] Calle Canovas del Castillo 9, Pinoso, Alicante 03650 AIPP BUYERS GUIDE

BUY RIGHT, OWN WELL

ver heard the saying “buy in haste, repent at leisure?” Buying a foreign property can be a great investment, E offering a wonderful lifestyle. But caution should be exercised, advice taken and precautionary steps heeded to effectively deliver it. That is why AIPP publishes this guide - now in its 14th edition - and available completely free of charge. AIPP is a not-for-profit organisation set up in 2006 to guide and assist British buyers of a foreign property – all our services are entirely free to you, the buyer. We focus on two key areas; 1. Consumer Education & Protection Peter Robinson, CEO, AIPP London and 2. Trade Best Practice (appropriate aspects of our work are endorsed by UK National Trading Standards - Estate Agency Team). We are funded by our 370+ corporate members from 31 countries around the world; AIPP members want you to have the best experience possible in pursuing your property dreams. Our members comprise AIPP does not sell agents, property developers, lawyers, banks, currency specialists, media and other trade professionals. Do take the opportunity to foreign property, research and connect with AIPP members in your country of choice on the AIPP website; www.aipp.org.uk. we do our best to Each AIPP member abides by our code of conduct and business members offer recourse through The Property Ombudsman, should this make sure it is sold be required. This is not available through non-AIPP members, so buyer beware! Ask non-AIPP companies to provide genuine references, take properly them up and, if buying off-plan, make sure you are clear about how the development is being financed. A foreign property purchase usually touches upon significant financial, tax, legal, estate planning and other ownership-related matters. If you are unsure how to best navigate these please do contact an independent financial adviser. Make sure you use a truly independent lawyer to look after your conveyancing. There are many, many successful and happy tales of buyers enjoying their foreign property purchase. Take a few sensible precautions, do your homework and join their happy ranks. Read on and find out how, with our compliments. | AIPP

© Copyright AIPP 1 AIPP BUYERS GUIDE

TODAY IS NOT LIKE YESTERDAY (THE LAST FOREIGN PROPERTY BOOM ENDED OVER 10 YEARS AGO)

round 800,000 & lawyers. Some foreign banks, overseas properties as principle funders, became A were bought by unwitting owners of many failed British people as property developments and have, To support second and retirement homes over the last 10 years, been British owners, before the global financial crisis completing and selling them off (GFC) started in 2008. A peak at discounted prices. But most AIPP has set of around 70,000 British buyers of this stock has now been sold, were active in the foreign property with that remaining perhaps up a sister market in 2007, there are now of little interest to foreign around 30,000 British buyers of buyers looking for a well-located organisation; a foreign property each year. holiday home. the Alliance of Many of those buyers continue Plenty of property was built to own their properties, but some in highly questionable locations International do not – having rushed into as cheap development, finance poor buying decisions. Lack of and speculative capital growth Property research, poor industry practices drove the markets. Some banks and rashness has led a significant have retained choice land sites Owners minority of foreign property acquired from failed businesses buyers into trouble. and now, with perhaps 10 years But what these new buyers hard-won property experience, are witnessing is a landscape are developing sites themselves. of foreign property opportunity Such developments from banks register for our free newsletters, transformed during the past might offer the prospect of better help and advice. Extending into recessionary years. Gone are the due diligence and an attached all the major aspects arising in large Brit-owned foreign-based (conditional) buyer mortgage foreign property ownership, the estate agents heavily marketing offer. Alliance supports British resident themselves aggressively into, As the market continues to owners of a foreign property in particularly, the UK. recover, there will be renewed 4 keys areas: The agents who are left have focus on new-build property, proud reputations to protect, driven by the higher and 1. Knowledge & Support having traded successfully in attractive margins for sales (including free legal advice) showing great customer care agents. Consideration of whether 2. Representation to authority through the lean years. to buy new-build or resale is (National & Supranational Gone too are most of the highly covered in page 9 of this guide. Governments) speculative property developers To support British owners, 3. Offers & Discounts with little or no experience in AIPP has set up a sister (to lower the cost of using land, construction, development organisation; the Alliance of your property) finance or customer services, International Property Owners 4. Owners Community Hub. many with very unhealthy (AIPO). Both owners & buyers relationships with banks, agents should visit www.aipo.org.uk to | AIPP 2 AIPP BUYERS GUIDE

GETTING STARTED

o where do you begin? Ok, so you think you know which TOP TIPS... country you want to buy your property in - most people S will have visited a country and region many times before deciding to buy there. Many people will be buying with a husband / wife / partner, so it is vital you two are both aligned.  You may not intend to rent your property Our top tips to ensure you are both ‘on the same page’? out but circumstances can change - a Each take a blank sheet of paper and a pen and sit in separate rooms. property you personally fall in love with Then answer the following questions and compare results. but is out of the main tourist areas can be Both happy? Aligned? No? Then you need to talk… difficult to rent / manage should you later wish to do so. Questions to ask yourself:  What are you PRIMARILY buying this property for:  The likely rental value that you  Holiday home may achieve should be considered  More of a financial investment – to be mainly rented out before purchase - also who you might  To retire to now rent through. Have a look at  To retire to later with some mixed holiday / rental use www.Holidaylettings.co.uk to get an idea of the market. A local agent has  What do you each see yourselves doing in the region, some advantages although income will be facilitated by your property? in the local currency (not Sterling) and  100% time together relaxing the quality of service can be highly  Boys golf trips (how often..?) variable - in some instances, fraudulent  Girls weekends away (how often..?) accounting of what the local agent says they have let the property for in value and  How often do you think you will visit your property in the first year, time being less than they have realised. 3rd year, 5th year, 10 years+?  One way to beat both currency and  When your property is not occupied by your friends and family fraud issues is to contract with a UK will you rent it out? holiday company who could offer you a fixed contract (regardless of number of  How long will you rent it for and for how much? weeks used) in Sterling. Have a look at the likes of Villa Plus and James Villas etc  What NET rental income must your property realise after cost of for typical market values and to perhaps servicing, agent fees, taxes, running costs and other deductions? make an enquiry as to whether they are (Note. You know you always underestimate how much money looking to add properties to their portfolio you will spend whilst on holiday? yep, owning and running a foreign in the area you are interested in buying. property is pretty much like that too. Put a comprehensive budget together, pronto!) There are no right or wrong answers - just the answers that give you both clarity of purpose and direction as to what is the right property that meets your own individual needs. | AIPP

3 AIPP BUYERS GUIDE

WHERE IN THE WORLD

ost people who buy a property abroad M will have a pretty good idea of where they want to buy, whether a specific country, region, or even resort. Holiday-home ownership is often referred to as the “final stage of tourism” and indeed the story behind a good many property purchases will involve owners being drawn back to the same place year after year and then finally deciding to commit more fully by buying their own home there. But maybe you don’t know where to buy for sure? It’s all properties are so affordable locations such as Turkey, is often high on many people’s too easy to get bamboozled with there currently. In 2014 Spain Greece, Italy or Croatia. wish-list but generally require tempting landscapes, persuasive began to emerge from its worst With property prices still well deeper pockets, as are other arguments and alluring prices but ever property crash so that whilst down from their peak in many bucket-list locations such as usually the best place to start is prices are still well down on their Eurozone countries outside the Indian Ocean, South Africa’s asking yourself why you want to 2006/07 peak, investors have Spain, affordability – is good Western Cape or the Maldives. buy abroad. the confidence of putting their although Sterling value to the Your money will go much Knowing what you want your money into a market capable Euro has suffered. But if you have further in Thailand, however property to do for you is explored of recovery. always hankered after a home in affordability must be weighed more fully on page 7 but if we So, to summarise: Spain’s Portugal, France, Italy, Greece or against ownership complications take the most popular current an established, relatively familiar Cyprus, then now is arguably the for foreign buyers and the varied locations for residential property market for the British with buoyant best time in over a decade to buy risks of buying in an emerging hunters (we are not talking about tourism promising reasonable it – if you have cash. Note that market. Since the global downturn commercial property investment returns for property hunters lending options have narrowed the horizons of British buyers have in this guide), it’s a useful seeking to cover their running although a 75% LTV is readily certainly narrowed and focused snapshot. costs; with a decent chance of achievable. on the “safe” and close to home. some capital growth too. Yes, there’s still an interest in Why Spain? Climate factor Eastern Europe, the Balkans and Spain is the stand-out favourite, …or why not? For those seeking year-round North Africa for the intrepid, but according to multiple sources, Of course the flipside of the coin sun, Florida remains the popular “new” destinations are regarded because it ticks so many boxes. is that some of Spain’s coastal choice, again with fast-growing with an entirely healthy dose We are not only talking about the areas might already offer too tourism and property prices down of caution. | AIPP perennial issues of accessibility, many British, or indeed foreign, from their 2006 peak – though climate, beaches and quality owners for some people’s rising again in many hotspots of amenities that have kept its liking, so for a more “authentic” such as Orlando and Miami. tourism numbers swelling year experience of owning abroad The sugar-sand beaches and after year, but the fact that they might head to less familiar laid-back vibe of the Caribbean 4 AIPP BUYERS GUIDE

THE KEY PLAYERS WHO DOES WHAT?

t is often said that straightforward hand-holding the biggest mistake role, showing you properties A G British buyers can and then being the middleman I E make abroad is between buyer and seller on a D N E assuming that things work the purchase. When you buy abroad T V same as they do back home. But agents will usually have to do a N E there’s truth in this, and one of lot more legwork: picking you up O L the biggest pieces of advice one at the airport, driving you around T O A can give is to somehow fi nd the areas for comparison, fi elding P R right person to hold your hand questions about amenities E Y D through an alien buying process. and transport routes as well as R A E So whilst all countries have frequently translating everything G V their own quirks and foibles, let’s you encounter. E E kick off with the key person in So when choosing an agent N L your search: the agent. you are going to need to know T O whether the person is going to be P N Agents capable, and prepared, to do all E O R At the risk of stating the blindingly of the above – if you require it. T A obvious, agents exist to sell It’s a sensible idea that you meet R property for a client – whether a prospective agent face to face Y a private vendor, a particular and clarify their knowledge and complex or a developer. They role from the word go. might market this property in information, good and bad the locality, or they might travel How to fi nd an agent? (are they members of AIPP? around promoting it at trade fairs Do your own research fi rst and Are they mentioned positively in and exhibitions, or they could be online is where you might start buyer forums?) based in one of the key markets looking for an agent. Going to a As in the UK, agents are not for their project, be it the UK, property exhibition and meeting always regulated or accredited in China or Sweden. people face to face is a great any way – this differs hugely from In return they of course way of fi nding an agent too, country to country – and quality is receive a commission, and that although not all agents attend also widely divergent. If they are commission will vary on the these. Either way, look on the big a member of the AIPP you can at country and whether the property overseas property portals such as least have the reassurance that is resale or new-build. rightmove.com, zoopla.co.uk or they are bound by a professional Commissions tend to be aplaceinthesun.com and see who code of conduct and disciplinary higher abroad – and do check is selling a good choice of the process with some recourse to your liability at the outset of your type of property you are seeking. compensation if things go wrong search as it’s not always the A professional and user-friendly When you meet your seller who pays it all – because website with all sorts of extra prospective agent, don’t be afraid the agent’s role is usually more useful advice is a good starting to test their local knowledge. comprehensive than that of one point for fi nding a professional What is your gut reaction, do in the UK. and user-friendly agent. Equally, you feel that this agent will In the UK, estate agents Googling an agent’s name can best represent your particular perform a relatively throw up all sorts of useful interests? If you don’t get a  5 AIPP BUYERS GUIDE

THE KEY PLAYERS WHO DOES WHAT?... CONT.

 sense that they are willing to financing the project? Are the training who is licensed by the spend time getting to know you buyer’s stage payments secured government to carry out legal and are properly listening to your by bank guarantees? affairs such as witnessing the requirements, look elsewhere. Look at their track record. signing of property purchase A good agent should carry out Have they completed previous documents and wills. Whether their own due diligence before projects successfully? Can you go French notai, Spanish notarios agreeing to sell a property – to and look at the quality? Are the or Italian notai their job is to save wasting everyone’s time. current owners happy two years see that the property purchase The bad ones will leave the on? As with agents, ask them to process is carried out correctly – buyer (or their solicitor) to find prove everything. Don’t just take and ensure that the related taxes out whether the property is legal their word for occupancy rates are paid. or legitimately owned. He or or monthly homeowner fees or Notary fees are fixed and she should also offer advice on the quality of the development’s payable by you, the client and elements related to the buying management committee, ask to although not generally too process such as obtaining a tax see the relevant documents. If onerous, should be factored into number, opening a bank account they have a contract with a hotel buying costs. Impartial overseers, or introducing the buyer to operator such as Mark Warner, notaries may give you useful legal mortgage advisors. ask to see it. advice but they should not be But beware of two things that In the same vein, treat confused with lawyers, because agents are not. They are not there so-called ‘rental guarantees’ they are not there to represent to act as your lawyer – you’ll need with a healthy dose of scepticism. you and you only. | AIPP your own independent lawyer It is important to realise that in to represent your interests only; order for the rental guarantee to and they are not there to take be covered (assuming that it is), responsibility if things go wrong. the developer may have marked Remember they are always - and up the property to begin with - just - the middleman. only to then pay you back your own money as ‘rental’. Genuine Direct from the rental guarantees are only as developer good as the organisation offering If you are buying off-plan or them so find out what happens if something in the process of they are not realised – being constructed, you may buy before you buy. Commissions tend to be direct from a developer. The Once you are beginning the developer owns the land, obtains buying process – of a new-build higher abroad because the relevant building licenses and or resale property – you may deal planning permission and then with a notaire as well as your the agent’s role is usually builds the project. lawyer (see page 14). When buying a new property, more comprehensive than buyers (or their lawyers) should New for UK buyers: that of one in the UK question everything the developer the notary claims. Has the developer got the A notary or notary public is building licences? How are they a public official with legal 6 AIPP BUYERS GUIDE

WHAT DO YOU WANT YOUR FOREIGN PROPERTY TO DO FOR YOU?

ost people will buy a anticipated but not exclusively around the property important property for one of relied upon – what happens if should mobility become a factor. M two main reasons: many of the apartments in the Access to medical care and to enjoy a lifestyle in block you bought into are owned perhaps a care home for a a given area or just as a financial by investors and they come to partner, whilst not in the mind investment with minimal / no market around the same time? of most 50-somethings, should usage. Of course, no-one buys You may be surprised how be a key consideration as we are a property to lose money, so all often this happens as investors living longer, but perhaps also property is a mechanism by which respond to changes in the local getting mentally and physically capital is tied up that will, it is market and macro-economic frailer because of it. With higher hoped, at least hold its value and financial picture. sales and purchase costs than perhaps appreciate. A holiday home is, perhaps, buyers are used to in the UK, Delve a little deeper and the a big treat to yourself and a it could be very expensive and picture becomes a little more significant capital outlay. To be unsettling to move property again complex; perhaps the buyer added to the cost of the property after retirement. Finding a buyer intends to retire /part retire to is the cost of purchase (perhaps for your property (if in a typically a property in the sun but first around 12% in Spain) and expat or touristic area), will also buys it for family holidays also to running costs. Prudent budgeting follow the pattern of demand – let-out as a means for paying for is therefore vital if you are to try and sell in a weak market the investment over a planned 20 enjoy your holiday home without and your property could take year mortgage period. financial worry. It may also mean many months or years at the The last foreign property boom you wish to let your property price you want / can afford was caused, in part, by property out to help pay for its upkeep. to sell at. | AIPP speculators not investors – This may then influence your defined as investors with a very choice of location of holiday short purchase to sale period, home – perhaps less rural idyll often just a few months. This towards walking distance to led to a glut of properties being shops, restaurants and other built and sold without enough tourist amenities? ‘end-users’ or ‘lifestyle’ buyers Purchasing a property for coming into the market to acquire retirement and emigration and live in them. So if you are often go hand-in-hand. It is an buying for investment you should appealing prospect to sell a be clear on your exit plan and higher-valued UK property and be aware of the market-inflating to get ‘more’ for your money practices of speculators – do you by buying abroad. This is often consider yourself a speculator? the intended ‘last move’ and a Buying for investment is a reward for many years of hard different scenario altogether work. Many people enjoy this with careful consideration given change and join local as well as to the net yield that a property expat communities in the sun. will give over a defined period. But consideration should also be If you buy at the right price then given to later changes to come in some capital growth may be life with, perhaps, access to and 7 AIPP BUYERS GUIDE

INSPECTION TRIPS

here property trip is the best route for them. WHEN DO PEOPLE BUY?* markets are rising, The key, as always, is to W inspection trips have ensuring your expectations tally *Active buyers returned. They are with those of the agent who is certainly not carried out in the behind the exercise. What will be SPAIN PORTUGAL sort of volumes – or in the same paid for exactly (flights are often fashion – as they were at the part-covered or accommodation height of the property boom but offered at a discount), what does they remain a powerful sales tool the agent expect in return? Can and an “easy” way for buyers to you meet with other agents? 25% 15% go home-hunting. If you know an area reasonably LESS THAN A YEAR LESS THAN A YEAR Now buyers in the market well, going under your own steam are far fewer, but they are a bit and arranging your appointments more savvy about inspection with agents gives you more trips, which came to symbolise freedom, yet trips organised by 26% 26% the “hard sell” culture found an agent can be a good way of IN 1 YEAR IN 1 YEAR (particularly) on the Spanish identifying properties that match Costas during the boom years. your requirements if you don’t But the old-style “freebie trips” know the area and don’t have have in the main disappeared time to explore fully. and now agents can’t afford to Inspection trips don’t tend to 25% 24% spend money on trips that are force-feed properties from dawn IN 2 YEARS IN 2 YEARS a waste of time so there’s a to dusk as they once infamously certain amount of pre-selection did, but “new generation” trips on both sides. will give you the chance to see Not everyone feels comfortable the highlights of an area – after with the implied obligation that all in many cases the agent is 10% 7% comes with being on a paid-for selling himself first, then the IN 3 YEARS IN 3 YEARS trip, whether agent or property region, then finally the property. hunter, so some major agents It’s up to you to make the treat them as strictly business most of any trip, you don’t want trips, or in one case, rebranded to be getting on the flight home 2% 2% them as “lifestyle visits”. thinking of lots of things you IN 4 YEARS IN 4 YEARS There will be a greater element wished you’d asked. Do your of vetting to ascertain how research before the trip, prepare serious buyers are and whether questions to take with you, and they have the finance in place make the most of viewings, taking to proceed. photos to jog your memory back 12% 26% Buyers themselves need to home. It won’t be so easy to nip IN 5 YEARS IN 5 YEARS do their research first – into the back and double-check the view area and the agent (is there from the patio or the amount of Source: Rightmove Overseas anything on those online forums?) storage space. | AIPP – and work out if an inspection 8 AIPP BUYERS GUIDE

RESALE OR NEW-BUILD?

or some people, out your home professionally, a Incidentally, Italians tend to only brand spanking brand-new new-build with all the love new-builds whilst overseas F new will do, and this latest integrated technology is buyers in Italy lap up those applies to buying going to appeal to a large pool of wonderful historic homes with a home as much as a car, sofa potential guests, and also offer a original terracotta tiles, oak or suit. more practical, hassle-free option beams and even frescoes. There’s of course a certain for the hands-off landlord. For many of these buyers, a appeal of taking possession of Although you may be liable “character-less” new-build something that has never been to a VAT type tax on new-builds, can never compete with a piece used and shaped by someone you may be able to reclaim this of history, and here is the main else, as well as a sense of the if you rent it out professionally, appeal of a resale property – pristine. When buying a property plus you could expect very or at least a period one. the pristine has hefty financial little extra outlay on top of Decades of wear and tear advantages, from a 10-year build the purchase price to eat into can be part of a property’s guarantee (in many cases), the your rental income. appeal – think of ancient stone prospect of a year or two free Another advantage of buying floors polished by generations of repairs (ideally!) and perhaps pre-construction (off-plan) or of owners - and a property’s lower insurance costs (in Florida). during the build process is that uniqueness can be appealing to There’s also the advantage you often get to decide the buyers and renters. that your home might offer the finishes or even layout of your But do make sure you have latest technology and fashionable new home. Having selected the a survey undertaken before you finishes, as well as a higher build- exact location of the plot (if part of buy a resale property – although quality than something built at a complex) there is a far greater not necessarily customary in the height of a property boom a element of choice available in countries like Spain and France decade ago. This is a factor behind shaping the final product you – because the older a property, the current trend towards new- want. The plot you choose will the greater scope for hidden build in the overseas industry – in be significant when you come to problems. With resales, “what the Spanish and Florida markets sell – homes on corner plots may you see is what you get” does not in particular – where buyers are sell faster than others mid-terrace; always apply – although you can rejecting outdated or outmoded whilst those backing onto a road see how the property works as a properties in favour of the “new might take longer. home and its surroundings, which generation” new-builds that have So far so wonderful, but you can’t do when buying off-plan begun to be constructed after some words of caution too: or mid-construction. a hiatus of several years in the make sure you do due diligence Do also check whether a construction industries. on the builder and have a firm property complies with modern A lot of lessons have been understanding of what costs building regulations and if learnt in the industry since the you might be liable for – the any alterations or extensions global downturn ended several buyer of a new-build might have come with the correct planning years of frenzied property extra costs that the resale buyer permissions. Get your lawyer investment and developers doesn’t. For example, in Italy to check and avoid heartache have realised they are having to your kitchen might not be later on. | AIPP respond to buyers that are more included. Also, buyers anywhere discerning and demanding. should be aware of expensive Certainly if you expect to rent furniture packages. 9 AIPP BUYERS GUIDE

BUDGETING

s with buying a agent in Andalucia suggests to be covered by local taxes. home in the UK, that you budget “10.5 to 14 per In Spain there’s an annual A the costs of property cent” of the purchase price for property tax called IBI whilst in ownership run far purchasing a resale property, with France there are two types of beyond the price on the sales an additional 2 to 4 per cent on tax: Taxe d’Habitation and Taxe contract. The key to managing top if you are having a Spanish Foncière and in Italy it’s even more your finances successfully mortgage. Note that buying costs complicated – a three-part service is knowing what you can vary across the 17 different tax, the IUC, introduced in 2014 expect to pay. regions of Spain. and not universally understood! Don’t make the mistake of You also need to understand assuming that either or both of Running costs the difference between being these will be lower than in the On top of the cost of any resident in a country and being UK – buying costs can be much mortgage on a property, there tax-resident there. This has higher in different countries and will also be ongoing taxes and implications for inheritance tax second homes tend to be taxed running costs on second homes. (IHT). If you rent out your property, more highly too. Ongoing costs The level of these is important you’ll also need to pay income may include high upkeep costs to ascertain early on, as it might tax on rental income locally. involving management fees and help decide what type of property In fact, it can be worthwhile also climatic wear and tear. you buy (new or old? standalone taking expert advice – from a local or part of a complex?) as well as lawyer or accountant – or in Spain, Buying costs where you buy it. a Gestor – once a year to ensure Buying or purchase costs involve a Also, these monthly expenses you pay the right tax - at the combination of agent commission will also eat out of any rental right time. costs (varying by country and income you make from your sometimes region); transfer property, or indeed force you Insurance tax or stamp duty, notary/land to think about renting it out to Holiday homes are often left registry costs, legal fees plus any “wash its face” (cover its costs). unoccupied for long periods, or mortgage arrangement fees. If you don’t want the hassle of they are rented out to third parties If you’re buying new-build there’s doing this, then make sure you so specialist insurance needs to the VAT – although this may be can afford to keep the property be factored in. redeemable if you opt to rent without letting it. If your home is in an earthquake out your property professionally zone, hurricane belt or frontline (French leaseback and tourism There’s always tax beach location then such costs residences in Austria, You also need to consider the may be higher than usual. for example). yearly taxation you might have Insurance costs may well Purchase costs can add up to to pay as a non-resident (or be covered by community or over 10 per cent of the sales price second home) owner as well as development fees, but check of a property, depending where community fees, homeowner this - communal parts of the you buy, so you really need to association fees (in the US), development may be covered factor this into your budget when insurance and types of council but not your specific property you make an offer on a property. tax. If you own a home in a or contents. | AIPP Ask your agent to advise you on community, there will be costs this before you start your search. for street lighting and rubbish In Spain, for example, a leading clearance etc that will need 10 AIPP BUYERS GUIDE

MORTGAGES

ood buying So, if you’re going to be paying HOW WILL PEOPLE BUY? conditions are with a UK salary, your mortgage G drawing British should be in Sterling, but if you buyers back into plan to rent out your property in the overseas property market France, you’d be better off with a with prices lower than they have Euro mortgage. been for nearly a decade in some Shop around and consider 59% locations. using a mortgage broker – as CASH That said, the mortgage well as a currency broker, to marketplace has changed beyond take advantage of exchange rate recognition so take some general fluctuations when you transfer advice to get a broad overview of your cash abroad for the deposit; 5% what you can borrow and where. and ongoing monthly payments. As EQUITY RELEASE A good place to start is a mentioned above, lending varies specialist overseas mortgage considerably between countries. broker and a LTV of 75% should We start with France, the be achievable - subject to status. anomaly, currently offering some 25% Do your research and consult of the best mortgage deals of all MORTGAGE lenders before you start seriously time and the greatest range of property hunting. You will options for overseas buyers. generally need a healthy deposit Beware, though, that the cost and the ability to provide a sound of changing mortgage provider 2% financial profile. You will probably is much higher in France than PENSIONS need to show proof of income in the UK (around 2.5 per cent and outgoings so the debt to of the mortgage value), hence income ratio – or affordability – most French people don’t tend to can be scrutinized, so get your switch lenders. Also note that old, 9% paperwork ready in advance. rural properties are seen as more DON’T KNOW Having your financial affairs of a liability by lenders. in order – and even an Approval In contrast, the choice in Spain Source: Rightmove Overseas in Principle (AIP) - will also show is much reduced with repayment agents and vendors that you are loans the norm. For bank a serious buyer and can move properties of course the situation fast to complete a sale, and even is different as a bank may offer use it as a negotiating tool. you 100 per cent LTV to get a As a general rule, when property off its books. choosing your mortgage always In Italy buyers are advised borrow in the same currency as they might get better rates the source of funds you plan to with a regional rather than an use to cover the repayments. international bank. | AIPP

11 AIPP BUYERS GUIDE

CURRENCY

roperty hunters not restricted by time with your account access from which you abroad tend to purchase, “stop-loss orders” and are able to transfer Sterling P be much more “limit orders” allow you to buy to your broker and they do the educated than they currency when your preferred rest - such as making regular were a decade ago and, apart exchange rate is available. payments abroad. from appreciating the need to Also in common use now Once you’ve purchased the take independent legal advice, are “forward contracts” which property, you will almost certainly many have learnt to use a foreign effectively protect your buying need to make regular payments exchange (or FX) company. power from currency fluctuations overseas from the UK - to meet Whilst there are so many by letting you fix an exchange mortgage repayments, and pay variables when buying an rate for a future transaction. This local bills, taxes or management overseas home, one major makes financial planning easier. costs. If you are retiring abroad certainty is that you will need You can fix today’s exchange you’ll need to have your pension to exchange your pounds into rates for up to two years with paid monthly into a foreign bank another currency and transfer a Forward Contract, and only account. | AIPP these funds abroad. Plus, in lodge 10 per cent of the total you this global age, it is hard not want to convert initially. With this to appreciate the relevance popular type of contract you can of exchange rates, with some either fix the date you wish to take dramatic swings to and fro within delivery of your currency, or have the last couple of years. the option of taking delivery at any But if choosing when to buy point up until the agreed date. to capitalise on a particular You can fix the amount of currency’s strength or weakness pounds you send abroad on involves a certain amount of a regular basis, for example guess-work, using a FX broker in monthly, which means the amount a currency transfer can without of local currency you receive in doubt save you a certain sum of your foreign bank account will money over using a bank because fluctuate with the exchange rate; they very often offer better rates. or you can fix the amount of local currency, for example euros, So how does it work? that is paid into your overseas When you are planning your account, meaning the amount of overseas purchase, it’s good to pounds being debited from your have an FX broker lined up in UK account will fluctuate with the advance. Brokers will allocate you exchange rate. a personal account manager, who You can typically save up to will monitor the currency markets four per cent over using a bank and keep you updated. – so £4,000 on a £100,000 Currency brokers can buy your apartment; £8,000 on a currency at the exact time that £200,000 villa, for example. rates are best, and if you are You will typically be given online 12 AIPP BUYERS GUIDE

PLANNING FOR THE FUTURE

n other sections either. In which, or both, will you in which your immovable assets of this guide so far be tax-resident? You may need (property) are situated, or where I we have covered to file tax returns – and pay taxes you are domiciled. So do take the need to budget - in both countries. Make sure expert advice even before you when planning your move abroad, you understand domicile – and sign the sales contract and when purchasing a property and the definition of domicile differs decide the most effective way for running your home. between jurisdictions – because of purchasing (as far as who But, as always, there is a need the fate of your movable assets is on the deeds), and whether to plan ahead and anticipate (stocks and shares etc) when you you buy as an individual or as a changes of circumstance in the die may be affected – see below. company. Such advice must come future. In fact, a large amount from someone with expertise of people in their fifties certainly Inheritance and in the country to which you are seem to be doing this already, succession planning considering because such matters with agents reporting that UK Even if you have no thoughts of are fiendishly complicated – pension reforms have played their retirement when you first buy and also about to change… role in kick-starting the market in a home abroad, bear in mind Spain especially. that it might make sense to put New EU legislation From March 2014 the over-55s your children on the title deeds on inheritance: have gained greater access to to save on transfer taxes and/ August 2015 their pension pots with the ability or inheritance taxes. Whether On 17th August 2015 EU to withdraw a lump sum of up to you do or not, bear in mind that legislation on “forced heirship” £30,000, (couples are now taking a carefully drafted will pays changed. According to Regulation cash and investing it in a property dividends – Spain reduces number 650/2012, any person ready for the time when they inheritance tax (IHT) liability with owning property in a participating are free to spend longer periods the addition of children to the will EU state (who has taken in the sun (find out more on as well as ensuring your estate appropriate action before their pension reform at goes to exactly those you wish death), can choose between www.gov.uk/government/news/ it to. the law of the country of their pension-reforms.) Because don’t assume that if habitual residence, or the law Even if you don’t do this, you you buy a property abroad you can of their nationality to govern the will need to decide how you draw hand it on to whoever you choose. devolution of their EU estate. So down your pension [see page 15] You may have heard of France’s with some forward planning – ie and what type of resident you will historic forced heirship rules amending your will - you will have become in the country where your (where the state dictates how your more control over the fate of your home(s) are located. estate is divided up between your property. Now that is a positive bit children, siblings and your parents of legislation. | AIPP Tax residency rather than your spouse), well and domicile each country currently has their If you intend to gradually semi- own rules governing who should retire to your overseas holiday benefit when someone dies – and home, then beware of falling how much tax is paid. between two countries and not Succession law – who gets being properly registered as a what when you die – is governed resident (or habitually resident) of by the jurisdiction of the country 13 AIPP BUYERS GUIDE

WHY YOU SHOULD ALWAYS USE A LAWYER

f there is just one why should we not use one in a thing that you take strange market abroad? I away and follow up Don’t fail to use one because on it’s this; please you want to save money or Use the AIPP FREE legal advice use an independent lawyer on because you can’t find one. your overseas home purchase. Typically, fees for an overseas service – as a buyer or owner of A multitude of problems can lawyer are 1-1.5 per cent of the usually be avoided by doing this purchase price, with a minimum a foreign property, see website one thing, even though it might fee so factor this into your cost a little extra, the expense purchase budget from the start. for details and how to apply might provide priceless peace of Get someone lined up early on mind – and spare you far greater and make sure they can translate financial losses later. documents for you as well Some agents or developers may as carrying out all the express surprise at your decision relevant checks. In comparison, the role of a to use a lawyer - it may be custom So how do you find someone lawyer is the same as in the UK for locals not to do so. The seller with no conflicting interests in in that they are acting in your of the property may recommend a the transaction who will work interests so will do all necessary lawyer to you. But buyer beware, is exclusively for you? due diligence for you, ensuring this lawyer going to be completely Recommendation from another your purchase contract achieves impartial? buyer is one route, although a everything you expect and have A truly independent lawyer, who good starting point is the AIPP, agreed on. will act to protect your interests, because we have law firms as Never sign a sales contract is one that is not working in members (aipp.org.uk). or mortgage agreement without collaboration with the agent or But don’t assume that seniority – having it checked by your lawyer. developer. That is not to say such as being in a country’s Bar Their remit includes searches that some lawyers suggested Association – equals pure ethics. on the property, the land it stands by respectable companies will Another route is through the on, planning permissions, and not be truly independent, but British consulates overseas, whether it carries any debts or corruption does still exist in who usually keep a list of lawyers encumbrances. various countries, and you should they recommend. They will act as facilitator be aware of potential conflicts Don’t confuse the role of notary between the different parties of interest. for that of a personal lawyer: involved in the transaction, and As a buyer in a foreign country in many European countries also advise you on related issues (who may not even speak the notaries are legal representatives such as finance, taxation and language), you are, after all, highly of the state whose job is to inheritance law. | AIPP vulnerable to exploitation because oversee and rubber-stamp you probably won’t be familiar property transactions. with the property-buying process. They will draw up the deeds, In the UK we routinely use a but their impartial position means lawyer when buying or selling a it is not their responsibility to home - we don’t have a choice indicate whether the deeds are because the conveyancing in favour of either the vendor or process involves solicitors – so the buyer. 14 AIPP BUYERS GUIDE

RELOCATION: THE PRACTICALITIES

f you are moving (a QROPS) but what are the pros passport is up to date. Always abroad full-time, and cons? Weigh up the options keep a copy of your passport I rather than just and check your entitlement to a somewhere safe. You will also buying a holiday state pension at retirement age: need to start notifying insurance home, then there are some get a pension forecast at www. companies, banks, GPs, dentists practical things you need to direct.gov.uk. Also, always allow etc of your move. Any pets? consider. On many of these you some cash for contingencies Moving your pet can be the most will need to plan ahead, especially and consult a regulated financial complicated and/or expensive if you have children who will advisor if you have any queries. part of your move abroad! need to start a new school at the beginning of an academic year. Welfare rights? Benefits Driving: Will you sell your may be affected by your move car before you leave or take it Schools: Application deadlines abroad so find out what you with you? Compare costs and for international schools tend will be entitled to. If you are legalities. In some countries to be in January for the autumn moving within the EU you will buying a car can be prohibitively intake, so schedule exploratory have rights, plus even outside expensive due to import duties visits the autumn before. With a (in countries such as Canada (Turkey, for example). Can you rising demand for such schools or New Zealand) there are still use your UK licence initially before (globally it has increased 7 per a number of reciprocal social transferring to a European or cent per year) you can’t just security arrangements. Check International Driving Permit (IDP) assume you will automatically get with the Department for Work and which must be obtained before a place. Pensions: www.dwp.gov.uk. you leave the UK?

Tax residency: If you move Healthcare: What medical Registering your arrival: abroad permanently you will treatment will you be entitled to When you arrive you will need to become a tax resident of that in your new country? Research register with the local authorities, country. The rules surrounding this and the cost of private and apply for a residence permit. tax residency can be complicated options. Some countries have a In some countries this will involve so seek advice before you move, contributory system, others pay- getting an identity number; in and the timing of when you move as-you-go GP visits etc. Find out others you may need to register from one country to another can more at www.gov.uk. with the police. If you haven’t provide tax advantages. Consult already done so through buying companies that specialize in Make a new will: Assuming a property, you will need to open giving tax advice to expats. you have a UK will for your UK a bank account too. Will you assets, check it is up to date be entitled to vote? Visit Moving money and before you go and make a new aboutmyvote.co.uk. | AIPP pensions: Apart from using a one in your new country to cover currency broker to move funds property and other assets there. across to your new country, consider simplifying your pension Logistics: Planning the actual affairs before you move. You may move starts long before you wish to transfer your pension want to go, when you need to from the UK to a recognized gather estimates from relocation scheme in your adopted country companies and check your 15 AIPP BUYERS GUIDE

TYPES OF OWNERSHIP

hese days there’s it is, and whether it will suit your going into any sort of business more to ownership own needs best. Schemes are with friends or family, it can often T than buying a only as good as the management be simpler in a professionally conventional company (and you will pay in managed set-up sharing with freehold. Most people with busy some way for the management strangers. lives and wide travel horizons expenses for such schemes – are unable to use their holiday the so-called “fractional uplift”) Leaseback schemes home for more than a few weeks so the market leaders can offer A successful business model a year so alternative ownership confidence. Big names in the in France for over 20 years, models exist. industry include Hilton, Marriott leaseback ownership schemes and Wyndham. are found in holiday areas and Fractional ownership Find out how much flexibility involve the owner leasing their Fractional ownership, shared there is for usage, how you can (holiday) home back to the ownership, destination club, exit the scheme etc, but some developer for a period of 20 residence club and timeshare (EU good news too: EU law to protect years usually. law uses the word ‘timeshare’ the consumer of schemes The owner gets to use their to cover all multiple ownership marketing to EU countries property for a pre-agreed amount schemes) are all terms in use includes a 14 day ‘cooling off’ of weeks per year and gets a for describing a concept where period and no money can change share of the income earned by there is more than one owner of a hands in this time. letting out the property for the holiday property. rest of the time. The hassle-free The idea of sharing a holiday Co-ownership with and hands-off aspect of this property with friends and family friends and family investment has proved popular obviously makes a lot of sense: You can share ownership to – it’s often treated as a pension various parties get to use a spread costs without being part pot - and buyers can get the property for as much time as they of a big, formalised scheme, and 20 per cent VAT back on a new need to per year, and save on the there are varying sized groups of leaseback property. purchase and upkeep costs of friends or family that have reaped Some things to watch out for: outright ownership. the benefits of “buying together”. as with fractional, the scheme is In the 1980s some bad sales With the right sort of legal only as good as the management practices of “timeshare” (in Spain advice and buying structure from company – the big ones in the especially) knocked consumer the word go, co-ownership can French Alps are CGH, Odalys and confidence and many fractional work well, but the key is to agree Pierre et Vacances – and beware ownership schemes are keen to on all eventualities before you hidden running costs. Yields on differentiate themselves from buy so everyone knows where freehold properties may well be timeshare. With the share of the they stand. How will you divide higher, but their management can freehold available to owners in up usage, will you allow third be a headache. | AIPP some schemes, or investment parties to use it; how will you into a property fund or portfolio, cover and manage maintenance there are clear differences, and bills and what happens although some schemes are when someone wants out of the similarly selling periods of usage. property – or to sell up? So know exactly what you are Of course disputes occur buying into, how tried and tested between co-owners and as with 16 AIPP BUYERS GUIDE

RENTING OUT YOUR PROPERTY

n recent years the what about access? How easily Management. How will you holiday home letting reached by your target audience? manage the bookings and/ I business has proven or running the property? Ask to be the fastest Beat the competition. Set yourself if you are going to be growing sector in the travel yourself apart from the rest in able to respond to booking industry. Alongside the ongoing terms of presentation, USPs, enquiries yourself speedily, or is popularity of the self-catering wow factors, affordability and/or it worth using an agency? Doing holiday is the rise of the “sharing marketing. Clients tend to expect this all yourself can be hard work economy” of renting out your Wifi and that welcome bottle of or impractical: how do you find a home(s) to strangers, as shown wine, but how can you make your plumber at 11pm for your home by the success of Airbnb. offering truly memorable? Make in Spain? Most people have a There are plenty of instances of sure you “sell” the property’s plus local person on hand to deal owners turning to rental returns points, whether it’s styling a lunch with key handover and potential to help pay for tax rises, cover laid out on the terrace, or showing problems – so don’t forget to mortgages or rising living costs. in pictures how the garden may factor-in management costs of In fact more and more – now be used. 10-15 per cent typically. around 60% - rely on rentals to cover the costs of running their Marketing. Consider creating Finance. Once you’ve got overseas home, and there’s your own website, alongside using bookings coming in, you will need growing competition between the popular portals; embrace to organise your finances. You will home owners. social media and last-minute need to pay income tax on lets So don’t assume that just deals if you have void weeks. so investigate the tax locally and by taking a few photos and Provide customer feedback as what running costs/community uploading them on a holiday part of your advertising. One charges you will have and also rentals website that the bookings agency has reported that offering what insurance you will need as a will come flooding in. feedback is now one of the things landlord. Consider what currency You will need to consider that all their most successful you will receive your rental carefully several key aspects… properties share (and note that income in, and how you you must request it to receive it). will pay management costs Location. How can this suit locally. | AIPP your objectives? What sort of Legalities. Are you permitted occupancy levels will you need? to rent out your property for Is a dual-season or year-round short term (holiday) lets? Is sun destination going to provide there zoning (Florida) or specific longer seasons? In winter-sun regulations within a complex? One agency reported offering locations such as the Canaries In Spain, some regional and Florida, three-month governments have clamped down feedback delivers the most success lets to “snowbirds” are quite on holiday lets (especially the common; the lower weekly Canaries) so take legal advice – but you must request it to get it! income offered by long-term lets on this: not just the word of an can be balanced out by lower agent. Also, have you got the management and marketing relevant insurance, do you need costs. Golf or mountain resorts a licence and do you conform to can be popular all year. Also, local safety regulations? 17 AIPP BUYERS GUIDE

OUR ROLE IN HELPING YOU TO ‘BUY RIGHT, OWN WELL’

IPP is a non-governmental, not-for- profit organisation seeking to improve A standards of professionalism in the largely unregulated international property industry. AIPP is also a Trustee of the IESC – International Ethics & Standards Coalition – www.ies-coalition.org

The role of the AIPP is five–fold: Important note about the service provided by the AIPP To freely offer qualified information We provide free and impartial information to UK 1 and support to UK buyers of a citizens about buying a foreign property. The AIPP foreign property does not sell properties, but it is an association made up of property sellers & associated companies To bring together, under a strict code who voluntarily subscribe to the AIPP code of 2 of conduct, all professional companies conduct. The AIPP does not underwrite the business in the business of creating and selling activities of its members. AIPP does monitor and foreign property enforce its code of conduct and does, from time to time, take disciplinary proceedings against members To improve standards of that may lead to their sanction – but expulsion from 3 professionalism and accountability the AIPP is the ultimate sanction we can impose. In in the industry common with other trade organisations, the AIPP does not underwrite for the benefit of members of To receive and deal with any complaints the public any shortcomings or negligent acts by its 4 about our members services including, members. where appropriate, the passing of such That said, AIPP members are also subscribed complaints to the independent property to the independent and specialist The Property ombudsman who may recommend an award Ombudsman service. Members of the public of compensation. can, at no cost to themselves, make a complaint about an AIPP member which, if upheld by The To support the Alliance of International Property Ombudsman, could lead to an award of 5 Property Owners – buyers and owners compensation being made to the complainant of up of a foreign property www.aipo.org.uk to £25,000 – such an award being payable by the AIPP member. While we try to ensure the accuracy of the information, AIPP cannot accept any liability arising from your reliance upon it, or from the inclusion in it or omission from it of any data whatsoever.

18 AIPP BUYERS GUIDE

WHAT HAPPENS IF SOMETHING GOES WRONG?

f you are dissatisfied However, it is important to about a service understand what AIPP can help I from a member of with and what we cannot. AIPP the AIPP then you members have signed up to our may make an official complaint code of practice, to be bound using our online complaint form. by our rules and to face the This will either be heard by the discipline of the AIPP and the AIPP Disciplinary Panel or by the TPO, should this be required. external specialist, The Property Censure can then also include Ombudsman (TPO), dependent suspension or expulsion from upon who the complaint is against. the AIPP. If a complaint is upheld then an What we cannot do is award of compensation of up to discipline non-AIPP members and £25,000 could then be made to complaints cannot be brought you by the offending member. against them through AIPP. In a The complaint route, whilst not largely unregulated market place being legally binding, does set a the AIPP sets the standard and precedent and should a matter attracts property professionals of complaint later come before a who ‘play by our rules’. court of law (unresolved), a judge Should recourse be required would look unfavourably on a against non-AIPP members situation where an opportunity to then we would suggest that settle the matter out of court had complainants contact one of come to pass but was rejected by our legal members, in the first a party later found to be at fault instance, to establish what course through the TPO or AIPP’s own of action may be appropriate. Disciplinary procedure. | AIPP

19 AIPP BUYERS GUIDE

GETTING THE RIGHT FREE LEGAL ADVICE: FROM QUALIFIED AIPP MEMBERS

In 2015, AIPP set up and continues to administer a free legal advice service via the ‘Legal Working Group’ (LWG).

If you are either a buyer looking for a legal ‘road map’ to guide your purchase, or an existing owner with a legal problem that needs some attention, then our legal members can help. To fi nd out more and to take advantage of this free service, please visit our website www.aipp.org.uk

FIND OUT MORE ABOUT GETTING THE RIGHT LEGAL ADVICE IN OUR LEGAL GUIDE

20 AIPP BUYERS GUIDE

AIPP CODE OF CONDUCT

General this rule shall prevent a Training Procedure through their AIPP 1. Members shall adhere to the Member securing the 1. All Members, unless exempted membership and the highest standards of honesty immediate signature of a by the Board on the basis of associated TPO (The Property and professional integrity both reservation contract or similar their proven previous Ombudsman) scheme. Both in their dealings with the public under which a property is experience, shall within AIPP and TPO logos should be and in their dealings with removed from the market for 6 months of being accepted prominently displayed on each other. a defined period upon payment into membership satisfactorily member websites, promotional 2. Members shall conduct of a modest deposit and which complete the AIPP Basic literature and in member their affairs with integrity does not irrevocably commit Training Course. offices to aid customer and dignity. the buyer to the purchase 2. This provision was suspended understanding. 3. Members shall, in particular, of the property. on 19th March 2009 until 3. If any dispute arises between refrain from misleading further notice: All Business a Member and any seller, statements and exaggerated Legal Members must within 12 buyer or other customer the claims in their dealings 1. Members shall comply with all months of being accepted Member shall again draw their with sellers, buyers and applicable local laws, including into membership have at attention to the existence of potential buyers. tax laws. least one relevant the Dispute Resolution 4. Members shall take all 2. Members shall accept representative satisfactorily Procedure and supply them possible steps to avoid responsibility for all acts complete the AIPP country with a copy of it. conflicts of interests and of their staff. specific training courses 4. If the seller, buyer or other shall decline to deal with any relevant to the areas in customer wishes to do so the transaction where such Relations with AIPP which they intend to deal Member shall agree to engage conflicts arise. 1. Members shall comply with with property. and be bound by the Dispute this Code of Conduct and 3. This provision was suspended Resolution Procedure. Marketing & Sales with all rules made by AIPP. on 19th March 2009 until 1. Members shall, if they are 2. Members shall respond further notice: All employees Applicability developers or sales agents, promptly to correspondence of Business Members engaged 1. This Code of Conduct, unless make it clear that they are or from AIPP. in sales activities must, within the context otherwise represent the Seller of a 3. Members shall, upon request 4 months of taking up their requires, shall apply to property. In any other case the by AIPP, provide AIPP with appointment, pass an internal all aspects of the Members’ Member must make clear their copies of any document or external Basic Training activities in connection with status and whose interests relating to their dealings Course approved by AIPP. International Real Estate they represent. with any other person or their including development, 2. Members shall always business practices which in the Dispute Resolution marketing, sales, resales, third recommend the use opinion of AIPP may be 1. All Members shall refer any party introductions and of an independent lawyer necessary in order to establish disputes arising as between property management. for international property the Member’s compliance with Members to the Dispute 2. This Code of Conduct shall transactions. his obligations under this code Resolution Procedure. not limit any greater rights that 3. Members shall not require or in connection with the 2. All Business Members shall a non Member might enjoy potential buyers to sign Dispute Resolution Procedure. at the outset of their under local law or otherwise. binding preliminary purchase relationship with a seller, contracts without giving them buyer or other customer reasonable opportunity to notify them of the existence reflect on the contract and to of this Code of Conduct and of obtain legal advice. Nothing in the Dispute Resolution 21 AIPP BUYERS GUIDE

AIPP CONTACTS

AIPP – Association International Property Professionals AIPO – Alliance International Property Owners You can find everything you need on our website at www.aipp.org.uk You can find everything you need on our website at www.aipo.org.uk If you have a query then please do drop us an email at If you have a query then please drop us an email at [email protected] [email protected]

Both AIPP and AIPO are based at: Rhoda House 4A Church Road Fleet Hampshire GU51 3RU