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Costa Crisis For Brits
news date: Thursday, April 28, 2005

Newsid: 1261

  Costa del Sol - News
Costa crisis for Brits

ALMOST three thousand UK citizens risk losing their houses in a tornado of property fraud and illegality which threatens to engulf the Costa del Sol market. Three crises have sprung up in the last two months and more problems loom. First there was the Blanco Ballena (White Whale) money laundering probe that has led to more than two dozen arrests. Over two hundred properties have been seized on suspicion they may have been sold illegally as part of an operation to wash money stolen from Russian oil company Yukos. Three Britons were arrested in connection with the Blanco Ballena investigation this week (see p.25). White Whale had barely broken the surface when the Andalusian government announced they planned to demolish 1600 homes the Andulcian High Court has ruled were built illegally in Marbella, based on planning permissions granted by corrupt mayor Jesus Gil. Included in the demolition list is a property in Banana Beach, Marbella, owned by Russell Ellis, 61, a builder from Devon. “We used a good lawyer and checked planning permission had been granted,” he said. “Now I could lose eighty-thousand pounds.” Then came the AIFOS scandal. Backed by singer Julio Iglesias, and with offices in the UK as well as here, AIFOS has taken hundreds of thousands of euros in part payment for properties in places like the Hipodromo district north of Fuengirola. Yet many seem destined never to be built because planning permission has been refused or cannot be granted.

There is some hope for those affected by the Andalusian decision. Buyers in affected Marbella properties bought in good faith and experts say owners could collectively sue Marbella city government for millions in compensation should demolitions go ahead.

It´s doubtful Marbella will take that risk. “My view is they could not afford it,” said David Greene who runs de Bocues Properties, an agency in Fuengirola. “Everybody would sue and Marbella could end up bankrupt.”

Aifos is more complex. They continue to advertise off-plan property in Hipodromo, even though they allegedly have no planning permission and will, in all likelihood, never receive any. Under Spanish law selling off plan property with no prospect of planning permission is a fraud. Experts say a company might do such a thing if it needed unsecured financing to stay afloat. It may be no coincidence that Aifos has over 600 million Euros of borrowings it must support. Aifos company representative Juan Luiz Gasco Aznar denies Aifos is misleading clients but many are scared and even more have unanswered questions.



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