Currently being piloted in Holland and Spain, the CROBECO scheme means that a Dutch buyer of Spanish real estate can apply Dutch law to the contract and ask a Dutch court for compensation from the seller if he later finds out there are unknown public limitations, such as retrospective planning laws, affecting the property. Similar pilot schemes in other countries are expected later this year.
Diana Wallis MEP, a long-term campaigner for an EU-wide guarantee of legal certainty when buying overseas, said: "The EU has a role to play in helping to facilitate property deals across borders and at the very least in providing a framework of legal certainty. In practice, this means we must ensure that there is full access to information on the state of a property, the conditions attached to it and any other legal obligations or obstacles. This must go hand in hand with a transparent administration of the property deal and a quick and clear judicial process in case something goes wrong."
A spokeman for ELRA said: "The fact that the deed is processed in the buyer's own language by a conveyancer from their own country, will make the buyer feel that they are better legally protected and less reluctant to buy real estate in foreign countries."
The scheme is likely to be highly popular with property investors looking to snap up a bargain safely, as well as to countries such as Spain who are desperate to entice foreign buyers back into their housing market.
While applauding the principle and the intentions of the CROBECO scheme, though, there are a number of practical obstacles to it's implementation. As David Livingstone, CEO of MovetoBG.com points out, "At the immediate level, there are clear cost implications, here, for international legal services, translation and validation of information that will all have to be built into the purchase price. More importantly, though .." he continued ".. we need to understand how the scheme is actually going to reconcile the structural and constitutional differences between property purchase, title and ownership in different countries."
