It's not often that I'm shocked, at least by things in Spanish real estate. Other things for sure; The state of the World, who people will vote for, the belief that if you don't drink water every ten seconds you'll be dehydrated, terrible own goals and the like yeah, but not things in Spanish real estate, been there seen that etc... However there's a new scam in town and I think you should know about it because you as a buyer, your lawyer, your notary and your seller need to know about it. It's quite ingenious and involves hacking, illegality and the potential loss of millions of Euros without there being anyone to really hold responsible, so take note.
Later on in the blog today we will also be looking at our best description of the year I think, and also telling you about next week's post and inviting questions. But let's start with the new scam in town.
The Scam
Firstly, I want to point out that this didn't happen here in Valencia, it happened in Mallorca but it could just have easily happened anywhere in Spain. One of our buying clients told me about it while they were waiting in the notary for their purchase just a few days after their sale in Mallorca and that's where they had almost lost just shy of a million Euros.
Here's the deal. You agree a price to sell your property with the buyer and after putting together the contract and both sides signing it, they then send the deposit to your account as a seller. Up to here all good, this is normal. Then things start to get weird.
One day before the sale an email arrives at the notary from your email account ordering the OMF transfer the next day to be sent to a different bank account. An OMF transfer is an immediate transfer made via the Bank of Spain and is becoming more and more common for completions at notary offices. Accompanying this mail from the sellers' mail address is a stamped certificate of ownership from their bank with their names on it to prove to the notary that they own said account.
However, this is all a scam.
And unless someone looks really carefully it could go through totally undetected, at least until the money doesn't arrive and by then it's too late, that money has flown, the house is sold. Luckily our client had a very thorough lawyer who is one of those that dots the i's and crosses the t's on every transaction and when they arrived at the notary on the day of the signing they asked a question;
"Did you SEND an email saying you wanted the funds paid to a different account?"
Obviously the answer was no. However, there are two easy ways that this might not have been spotted. One, the sellers aren't there to answer that question as they have given Power of Attorney to the lawyer and two, the lawyer simply doesn't ask that question. The lawyer could have just assumed that the details in the Notarial document were correct because the Notary's official takes the information supplied from buyer and seller.
So What Happened?
The email account of the Notary's Official had been hacked. The hackers knew what they were doing too. They searched through the open operations that hadn't been completed and took all of the details of the sellers and the operation to include in their scam.
They then faked an email coming from the account of the sellers and forged the bank document using the one previously supplied by the sellers to show ownership of the account that they did want the money going to, the same one as the deposit contract account. They instructed the notary's official to change the deed to reflect these changes and they almost got away with 900,000 Euros if it wasn't for that one little question.
This is a new scam by the way because until recently all payments in notaries were made by handing a bank draft over to the seller in exchange for the keys to the property. The seller then takes the draft to their own bank and puts it in their own account. Simple! Now though many sales are being done by these OMF transfers as Spain tries to move at least into the 20th Century in terms of banking.
Here in Valencia a representative of the bank often goes to the signing and as soon as the deed is signed makes the transfer through their laptop on which the buyer transfers the money to the owner. Sometimes though the buyer phones the bank from the notary to tell them to make the transfer now. That is when this would be a very dangerous way to transfer because the person from the bank is not there to confirm with the sellers the destination account, they would use the previously provided details.
Always check the destination account is correct with the sellers before making the transfer if not using a bank draft.
What Happens if you Send the Money to the Wrong Account?
Well, here's the strange part of responsibility. As I just mentioned, the deed has already been signed and in that deed are words to the effect that payment is made by transfer to a named account. If that account is wrong then there is nothing the seller could do to find the transferred money and they have lost the house as they have signed over the rights to the property and they have explicitly stated that the money was being sent to the correct place.
They are responsible.
However, does the notary have some responsibility as it was their account that was hacked and the information was taken from there and the notary hasn't mentioned any changes to the previously agreed deposit contract? Is the lawyer you are using responsible for not asking THAT question of you as a seller? Is the bank responsible for not double checking before making the payment?
It's a bit of everything. One person who doesn't have any responsibility is the buyer as they have done what they have been told to do and bought the house but I'm pretty sure they wouldn't just be walking away with keys in their hand to their new happy home.
It definitely has all the makings of a mess if not spotted so it's of utmost importance to make sure everything is checked, double checked and then just checked again to make sure everything is correct, especially before making a transfer of a very large amount of money. Remember also that at times you are transferring to various accounts, for example when the property you are buying is for an inheritance and all of the destination accounts need to be checked thoroughly.
For years we have been saying that we need better methods of payment than what is to all intents and purposes, a cheque. And now that we finally have one it increases the possibilities for a scam. Be vigilant.
How To Help Your Kids Buy Property in Spain
Next week on the blog we will be looking at how you can help your kids buy property in Spain, the methods available, what to look for, how to do it most efficiently taxwise and the risks of each method. If you have any questions you specifically want answering in that blog then send us a mail on information@www.valencia-property.com and we will address them.
Our Best Description This Year?
I'm pretty proud of this one, the International Supervillain Lair Project.
We know what it's like, you've told your careers teacher and mentors that you want to become an international supervillain but you just cannot find the right property hidden in the local volcano for you and your henchmen to build your satellite destroying laser and the only position currently available for international supervillains has just been filled by an Orange Sh*tgibbon with a criminal record and a penchant for lying, rambling incoherently and soiling himself in public. We know that he has also collected around himself the most depraved group of individuals ever given the privilege of using up some of the scarce resource of oxygen but you still think that your eclectic group of muggers, con artists and forgers can camp it up in the Dr Evil stakes.
Here we have the perfect hideaway.
Now as an evil supervillain you will be doing a bit of work on the location, satellite launch station, separate shark and crocodile tanks and one of those elaborate cat scratching posts, so the fact that you will need to alter absolutely everything in this vandalised ex-club/bar/restaurant and well known Valencia viewpoint won't really bother you.
The building is known as the Zenital and as we know all good supervillains have a Zed somewhere or sometimes an X, looking at you Musky boy. The idea of the house was that it was a representation of the Cosmos and a part of the countryside surrounding it but it was the 60s so some serious drugs might have been imbibed before its building. It's a series of concentric semicircles with serious views down to Valencia and up to the heavens above and heavens to murgatroyd even. Bring your telescope but make sure it has the attached laser to target those satellites.
Theoretically it has 5 bedrooms, 3 bathrooms, and all the usual things associated with a normal house (except right angles, so pretty typical of all Spanish housing). Practically it is a blank canvas for your evil world controlling ideas when you are not snoozing at the Whitehouse. But for now let's look at the features.
Air Conditioning - Of course. There are currently no intact windows so plenty of breeze.
Bullet Proof Windows - I mean not currently, but you'll be doing that right?
Double Glazing - There is nothing more reassuring than two layers of security in the bullet proof glass.
Garage - I mean it could have, your lunar landing module will need somewhere to park
Garden - It's a tad steep but when you throw Mr Bond from the balcony you'll want to make sure he dies and not make the same mistakes other lesser supervillains often repeat over and over.
Views - You can see your enemies approaching, as long as they come from the South.
What more could you ask for? Come and see this wonderful piece of history if you have over a million spare (the asking price is just 380k but don't let that fool you, this isn't a 10k quick remodel and flip). It doesn't need a Billion like Dr Evil asks for though so with a million you'll probably be good to go.
If You Liked This...
Then take a look at our other posts where we have talked about scams, scammers and what to look out for when buying property in Spain. Just click on the images below to be taken to the pages.
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