The Agent - Property Showrooms

The development is being marketed by Property Showrooms who have produced a very impressive e-brochure. I ran a credit check on the agent even though no money passes through their hands. My logic is that a disreputable agent is unlikely to have any qualms about dealing with a disreputable developer whereas a reputable agent is more likely to only want to deal with a reputable developer. Agents registered in the UK can be checked for as little as a fiver at websites such as Instant Report. International agents can be checked out at websites like Skyminder, although international credit checks can be expensive and can take a while to come back. The credit report that I obtained on Global Prospects SL, the Spanish limited company through which Property Showrooms trade, can be summarised as:

1) The company was formed in December 2004.

2) The company is based in Malaga on the Costa Del Sol.

3) No legal actions have been registered against the company.

4) The company has a weak balance sheet, but this is normal for service companies.

5) The company turned over less than 10,000 euro in its first year of trading.

6) The British directors of the company are Stephen James Binge and Daniel Michael Bance.

I also Googled them, but thankfully could not find any adverse information. In my dealings with Property Showrooms I have been speaking with a very helpful British woman called Nicky Segal. I found her knowledge a bit lacking (or perhaps I have just been trained to ask awkward questions) but her customer service skills more than made up for this. When she couldn't answer a particular question she always came back to me promptly with an answer from the developer. It would be easier for me to communicate with the developer's English speaking representative direct, however Nicky obviously doesn't want to lose her commission - and I don't blame her. My main concern is to find out exactly who the developer is and what kind of vehicle (company) he is using for the project. Even though Nicky said that Property Showrooms had carried out some due diligence there seemed to be some confusion over exactly what company I would be contracting with. She emailed me the CV of the developer, Jose Edirardo Silveira Santos. He is apparently a local civil engineer with 40 years experience under his belt who has built 3,500 residential homes over the years.

Originally she read out some of her due diligence info (I think it was info from the land registry) and gave me the company name of Corretores Imobiliarios Associados LTDA. This is a real estate company which has been trading since 1980. There is no adverse information registered against it. There are no accounts to inspect as Brazilian companies are not required to make public this type of information. There are two associated companies and two directors neither of which is Mr Santos. After I questioned whether this was the correct company she then gave me the name Homes in Brazil LTDA and confirmed that it is normal in Brazil to set up a separate company for each development. I am not bothering to credit check this company because there won't be much information available if it is newly incorporated.

Nicky said that there would be a building guarantee of between 5 - 10 years (I am guessing this is like the NHBC guarantee on new builds in the UK). She confirmed that the development, once completed, would be run condominium style so the villa owners get to choose the management company (and more importantly get to fire them if they don't provide a good, value for money service). Nicky, or the developer's representative, answered this specific question as follows by email:

What happens, under Brazilian law, if the building company goes into
liquidation before completing the development? Are purchasers who have paid
a deposit simply unsecured creditors? Or does the initial paperwork (on
paying the 30%) give the purchaser some kind of legal charge over their plot
of land?YES THE PLOT WILL BE WILL HAVE LEGAL CHARGE

I cannot fault the customer service provided by Property Showrooms, however, if they have conducted some due digilence it might be helpful to voluntarily share it with potential investors in order to offer them some reassurance. I appreciate that as middle-men they don't want people trying to do deals direct with the developer but I think more concrete facts would help potential investors to make what, after all is one of the biggest buying decisions in their life, which should equal more sales which should, in turn, equal more commission.