Two Irish brothers are helping Irish and British investors in Spain get back sums to up €500,000, writes Dan Buckley.
Like thousands of Irish people with an eye for a good investment in the early noughties, Ollie Reel decided to invest in Spanish property, which was going through a boom at the time.
From Silverbridge in Armagh, he and his brother John were among almost 400 people who put money into a large development on the Costa Del Sol.
They couldn’t have picked a worse time to make such a substantial investment.
“Our development was in Estepona, called Estepona Beach and Country Club,” says Ollie. “There was nothing ever built in our development and 395 people lost their deposits.”
Ollie was encouraged by a financial adviser to remortgage his home and use the equity to buy an off-plan property in Spain.
“Like an idiot, I bought two and put down deposits totalling €145,000,” he says.
As a UK resident, he was able to reclaim €70,000 through Britain’s financial services compensation scheme on the basis of getting poor financial advice. His brother, who lives in Louth, was unable to claim in Ireland as there is no such scheme here.
For years, they tried to get their all of their money back through the courts in Spain, to no avail.
“We took a law case in Spain which cost us nearly €200,000 between 80 of us involved and we were still no further on after seven years.”
It was then that they heard of the work of Spanish lawyer Martin de la Herran, of Abolex lawyers in Benidorm. He is one of a small group of lawyers who took test cases against the banks that held deposits for holiday homes that were never built.
It was pointless pursuing the developers involved as they had all gone bankrupt.
Seven test cases were taken by Martin and the other lawyers between 2012 and 2015 — all of which went all the way to the Spanish Supreme Court and each one was ruled in favour of the victims.
By March 2016, after the result of the final test case, a precedent was then set for everyone in a similar situation to claim.
Martin had already won more than 70 cases for UK-based clients before meeting Ollie in June 2016, with a 100% success rate in these complex cases.
“We invited Martin to Ireland in June 2016 to see for himself the scale of losses here,” says Ollie. “He was confident he could help those who had lost money and, given his track record, so were we.”
The brothers were instrumental in setting up an Irish agency, Reclaim In Spain, in Louth. Ollie and John operate as advisers, gathering information from Irish investors and liaising with Martin in Spain.
“I left my teaching job of 24 years to help others throughout Ireland and the UK to try to reclaim their deposits,” says Ollie. “I hope to get the rest of my deposit back through Martin.
“We have over 300 cases in court already for Irish/UK investors since we started working in June 2016. The first Irish cases were submitted in November 2016 and a couple in Galway became the first investors to get their money back last December. They were awarded 100% of their €54,000 deposit plus interest and court costs.
“Two cases have been won and paid out to date for Irish victims with another six cases won after an initial hearing but awaiting payment. Another five cases have been asked for a second hearing but Martin is confident of success and feels the banks are just buying time.
“We expect a steady rate of success in all our cases and expect more payments to be made this year.”
Martin’s success has spurred other lawyers in Spain to take on the banks on behalf of property investors.
Last year, Costaluz Lawyers, a firm based in Cadiz, won over €2.1m for clients taking action to reclaim lost deposits.
Six banks were ordered to compensate British and Irish investors: SGR, BBVA, Banco de Sabadell, Caixabank, Banco Popular, and Caja Rural. The highest payout in any one case was €958,000 plus interest.
Pauline McDonagh, a retired garda detective, was another Irish investor who lost heavily. She and her husband, Pat Forde, bought a property off-plan near Malaga.
“We put a deposit on a place in Almeria which was going to be for our retirement,” says Pauline. “We looked at the glossy brochures and bought into the dream like so many others.
“Because my background is investigating serious crime, I couldn’t let this go. Since 2005, I have been following cases in the Spanish courts. Numerous cases were won and judgments were issued against the developers, but no money was returned mainly because the developers were bankrupt and didn’t have the capability or willingness to pay.
“I’ve met people here in Ireland who are to this day paying back mortgages on what they borrowed. I’ve spoken to people whose marriages have broken down as a result of this.
“One woman who lost over €100,000, can’t deal with it, can’t even speak about it, and has handed it all over to her son. Most people won’t talk about it because they feel they’ve been duped, they feel foolish. People I have spoken to have lost between €15,000 and €500,000.”
Like the Reel brothers, Pauline is optimistic for the future.
“I am well on my way to getting my refund,” she says. “The banks are already beginning to settle. I have heard of substantial settlements. I met a woman outside Sligo who got €60,000 last July.”
Other investors who thought all was lost also have reason to hope. The Reel brothers are working with a group, some from Dublin and some from Cork, who invested in a development in Manilva, close to Marbella on the Costa del Sol.
There were people from Norway and Dubai who invested in the same development and lost out as well and they have also turned to the Irish agency for help.
“We are now helping those investors in Norway and Dubai to get their money back so things are pretty hectic at the moment,” says Ollie.
“Last month, there were five cases heard in court and between now and June there will be 32 cases getting their first hearing dates.
“We have another 21 Irish cases with court hearing dates in Spain between now and June and Martin De La Herran is very confident of all of them being successful. We also have another 300 plus cases in the system awaiting court dates. It looks like finally there is light at the end of the tunnel for thousands who lost out.”
It’s all a far cry from Ollie’s days as a teacher in Armagh.
“I was a PE teacher for 24 years and, between bad knees and ankles, I was coming to the end of my career anyway so something good has come out of something bad,” he says. “I am now making a living helping others and that’s great.”
What is not so great, though, is that Ollie and his brother are in a somewhat different position to many other investors. There is an ongoing criminal case against their developer who denies getting any money from them. Until those criminal proceedings are over, they cannot take a civil case against the bank that handled the payments.
“We think that the developer and the UK agent were acting together,” says Ollie. “The money we paid was used to buy land in the Dominican Republic. That means I probably own a few grains of sand in the Caribbean.”