The officers’ visit leaves tourists and diners crestfallen. They came to enjoy the sub-tropical atmosphere and entertainment. Shaking their heads in silence they look at each other resignedly as the truth sinks in.

Nothing underscores better the reason why tourists are deserting the Costas in their millions. A festering culture of antipathy towards tourism and la dolce vita Spanish-style has set in.  Reason seems to have deserted the policy makers.

A fellow diner says: “If their purpose is to return Benidorm to fishing village status they could hardly do it better. There is no need for eastern Mediterranean resorts to pass the brown envelopes in pursuit of high-spending tourists: the Spanish do it unpaid. They are misguidedly reversing the gains of decades.”

TURKISH DELIGHT

Compared with Mediterranean Spain (- 22%) Greek tourism has dropped by a much more palatable 7%. Turkish tourism is actually up by 3.59%. In 2008 Turkey attracted 26.4 million visitors.

Because they actually encourage a holiday atmosphere Turkish restaurants are far livelier than are their Spanish rivals. Here on the Costas, even on a Saturday evening, most bars and restaurants struggle to fill just a few tables; good quality live music is virtually non-existent.

Those filling the rival Turkish and Greek resorts are not new to tourism. I suspect that most of them were weaned on the Costas, but given the choice of value for money and eastern Mediterranean joie de vivre, who could blame them?

DEATH WISH SPAIN

The French authorities reacted to the need to boost tourism by reducing VAT from 19.6% to just 5.5% in the restaurant industry. A Parisian restaurateur speaks for many when she says diners are now coming seven times a month instead of four or five times.

On the face of it this is a lot of money for any government to lose but the deal is that, in return, the industry agrees to drop its prices accordingly; and to employ a further 40,000 workers. The extra taxes paid by this new working army will offset those losses.

Ireland set the example: Years ago they drastically cut the hotel industry’s VAT obligations. It was a smart move that attracted so many additional tourists the Government actually increased its income.

THE SOUND AND PRICE OF SILENCE

In sharp contrast Spain’s tourist strategy appears anti-tourist. A ridiculously low 35 decibel level is imposed on venues; a busy bar’s chatter can be as high as 75 decibels. It requires only one resident or spiteful competitor to complain, and the police with Taliban zeal arrive to stop the enjoyment.

On the roads the travelling tourist runs a high-fine judicial gauntlet. If they manage to make it to the beaches a simple ball game or ‘after hours’ soiree can cost more than the holiday itself.

Barrie Breton, keyboard player of the eclectic Dynamic Touché duo says; “It is madness. At least when Franco was in charge there was a consistency and greater liberalisation.”

Banned from playing their popular gigs at the Punto Marina plaza, diner Phil Heath adds: “There are 14 units here; five are empty and another two have only the staff in attendance. On the lower section, of fourteen units only four are open. It’s madness!”

To paraphrase George Orwell: “Maybe they will see the writing on the wall only when their backs are up against it.” For most restaurateurs their backs are already up against it as they struggle to survive the tourist Taliban.

The legal procedure known as a Dación en Pago may be a better option for the defaulter who may otherwise face years of legal wrangling and even bankruptcy: The outstanding mortgage is still an obligation as are the additional costs in the event of default.

Put simply it means surrendering the keys to the bank by formal declaration before a notary. In return the bank agrees to cancel the balance owing and release the mortgage holder from further liability.

A CLEAN SHEET

The credit consequences of the cancelled debt do not transfer. If the defaulter returns to their own country they can start off with a clean sheet.

The Dación en Pago is established by Article 1.175 of the Spanish Civil Code (SCC) and the transfer, unless otherwise agreed, is limited to the value of the mortgage which corresponds to the value of the property. In other words if the outstanding mortgage is 100,000€ but its value is only 80,000€ there will be a shortfall of 20,000€.

GET OUT OF PRISON?

There are three important requirements for the Dación en Pago to be acceptable: The borrower should not have already defaulted. The lender should not have already commenced repossession proceedings. Thirdly, the property should not be in negative equity exceeding (as a rule of the thumb) 20 per cent if it is to be considered.

There is no obligation on the bank to accept the Dación en Pago solution but there is equally good reason for their doing so. As commonsense suggests these procedures must be conducted by legally qualified professionals.

Raymundo Larrain Nesbitt
http://www.spanishpropertyinsight.com/buff/spain/faq/licence-of-first-occupation/