Tag Archives: Buyer




As a result of the world financial crisis and the subsequent Real Estate Market slowdown in many countries, Morocco’s recent start in the second home market wasn’t to be an exception. As in many other places in the Mediterranean, Demand exceeded Supply leading the purchasers to buy off-plan. When the inevitable happened, Developers found that they couldn’t continue building works leaving thousands of people without their property or their money. This resulting fiasco has produced a scenario whereby stranded Property Developers in Morocco can be classified in three very different categories:

My breakdown could be put as follows:

Type 1 are those who have been through financial difficulties but have still managed to stay afloat in one way or another. Here the quality of their final product is way below the promised result and/or they have not dealt with contract cancelations from clients is a satisfactory way. It is possible to take legal action for breach of contract against this group as some still have sufficient cash-flow. However there is a tendency for feet dragging and in most cases a total unpreparedness to settle matters with purchasers in a professional and efficient way. The old Fadesa-Maroc and subsequent associations come to mind (Alkudia-Smir in Tetouan and Med-Saidïa amongst others).

Jumping over to Type 3: Here we simply don’t know the current state of things, communication is inexistent and an air of suspicion is present overall. Here, Playa Vista also in Tetouan is firmly under this heading.

I’ve left Type 2 for the end in order to develop in more detail. This corresponds to those developers that are experiencing financial difficulties but still maintain assets in the Kingdom of Morocco. The assets we are talking about are usually in the form of land.

One such developer is/was Property Logic Maroc S.A.R.L a subsidiary of Property Logic (Spain) based near Marbella in the Costa del Sol. Their flagship development was to be called Le Jardin des Fleurs to be composed of Touristic Apartments and Villas over various plots of land at the Macro Resort “Mediterrania-Saïdia”

Property Logic stopped building some time ago and have ever since been seeking Finance to continue building but have been unsuccessful so far. The result of this sequence of events have left an eyesore of derelict shells of what were to be luxury apartments and villas. It is now full of rats and overgrown vegetation. For many it is totally beyond repair at this stage.

To give Property Logic some credit they have been reasonably in touch with their clients and every time has transmitted through the message that funding was just around the corner which of course never came. This preparedness to show up in difficult times is more that you can say for other developers.

As it was the case during the property boom in the country from 2004 to 2007 buying off plan was the flavour of the month. There were hundreds of people answering Property Logic’s aggressive marketing campaigns and many did buy. One such successful campaign was persuading some premier league top professional footballers to buy at the resort. This was given top exposure in the media by the company’s spin doctors and succeeded in attracting many more buyers. It was a very clever tactic that later backfired. Unfortunately none of the people who bought has had their deposits returned, around 30% of the original sales price.

Property Logic’s Payment Structure


Clients reserved their properties with a token deposit which was followed by around 15% of the total cost. Over what was to be the construction stage a further 15% was deposited until reaching around 30% of the total cost and the signing of a private contract loosely translated from the French as “A Promise to Sell”. Again, here we have the regretful circumstance that these contracts have all expired under Moroccan Property Law and that they are not robust enough to offer their holders any protection in law. In other words, having a private nature only between developer and client, the beneficiary’s names don’t appear officially anywhere in Morocco. The authorities know nothing about these people who have parted with their hard earned cash and have nothing to show for it.

What is there for clients to do?


  1. Wait and hope that Property Logic obtains their long awaited funding. Apart from being a miracle we have the little matter that their build licence has also long expired and they would need to re-apply for a new one. They also have a good sprinkling of creditors inscribed on their assets and these people will have to be dealt with before doing so, that is to say they will demand a settlement which usually is tailor made in line with their demands and which may not only include their nominal investment back but also compensation and legal fees. To clear the creditor list Property Logic will require the “main levé” from their creditors. This is literally (The) “hands up” from the French and it’s a legal document that will enable the developer to clear that creditor list, basically the client signing away their legal rights. Of course a creditor will not dream of doing this until they are happy with their negotiated settlement. This goes for every single creditor, no one has to appear in the infamous list. No prizes for guessing that those without legal rights will no doubt be left out in the shuffle unless Property Logic’s goodwill say so otherwise. Take you pick. Another haunting matter for Property Logic is the fact that they are not exactly in the Moroccan Authorities good books. Although not officially, the grapevine here on the ground suggests the eagerness of Morocco to see the back of them and others like them. You can jump onto your own conclusions whether a new build licence will be granted or not.
  1. If clients are not already creditors they should consider very seriously becoming one. Why? As stated above their contracts are now virtually worthless. Property Logic may eventually drop out of the equation and whoever takes over will surely deal with the creditor list first (they have no choice) and certainly leave the rest who are not creditors out. They have the right to do so, after all the client is registered nowhere in Morocco. The way things work in the country this is a 100% bet. Yes, there are expenses and this is risk the client would need to take but what is the alternative?

How does one become a creditor?


A Moroccan Lawyer needs be appointed and documents submitted. Depending on the lawyer a full or partial provision of funds may be requested at the same time.

The objective is the insertion of a protective charge on the assets of the developer for the value of their investment, a legal instrument called a lien.

The lien is in the name of the client and duly registered under the plot of land the property was to be built. The client gets a copy of the court ruling in their favour. This is stamped with the official seal of the Land Registry.

The client is now an official creditor of Property Logic and appears in Moroccan Official Documents for the first time since they bought.

It is important to know that purchasers will not get their money back on the strength of the lien itself. This is only a safeguard should there be a takeover by a third party. After the lien is registered the holder will simply have to wait until matters develop further. This is Part II and a separate issue altogether from the above.

Jorge Larios

Notting Hill Inversiones (Melilla)



Foreign buyers in Morocco react very timidly when they face a problem with their developer and their lost dream and investment. It’s also interesting how the different nationalities react. By far the least aggressive are British and Irish buyers who trust goodwill and think that by appealing to fairness they are going to get joy. Nothing furthest from the truth I am afraid. How many cancellation letters have been issued? And how many refunds have been made?

Experts say that one of the main components in explaining why rich countries are rich and poor ones poor is culture and I would agree. A famed Moroccan proverb says that “A Christian is a cow to be milked” and precisely this is one of the reasons why the country have been unable to consolidate their share on International Property Demand that promised considerably at first.

To cut a long story short and in a nutshell the only way people are going to get their money back from these sometimes unscrupulous developers whether foreign or Moroccan is to get a judge to force them to do so.

There are two types of potential cases against a developer:

1. If a developer has not yet gone bankrupt they can be sued for breach of contract and can be done due non delivery within a reasonable time or for poor finishing.

2. With bankrupted developers the only possibility is to place a lien (preventive embargo) on the assets of the company before they are unwound or confiscated. The private contracts are not robust enough to secure the owner protection if this is the case. These are the kind of developers that are eternally looking for finance to finish off building works but they may be sitting on a time bomb that threaten to destroy them and what’s worse, their clients.

In my experience many buyers are very reluctant to take a developer to court and I would understand this. They have already spent a lot of money in return for nothing; they don’t trust lawyers who are in many cases accused of scaremongering for their own gains; or maybe that taking people to court in their own countries is a very drastic act and something you would do in the last resort. But the most relevant is that they still believe in the goodwill on the part of the developer. Forget it.

Cultural Differences

The web is full of stories of those foreign buyers telling of their unfinished Moroccan Property they bought off plan and paying a hefty deposit that are now seeking the possibility of organizing Group Action. A number of different groups have been set up and appeals constantly being made to embassies, consuls, government and even the King! Some British buyers have even written to their MP’s. Likewise, some lawyers have tried to persuade individuals to join up and take joint legal action.

This is very coherent in the west but in Morocco it simply doesn’t work, and those clever lawyers should know this. It is not only Moroccan Developers that are ignoring their buyers; some of the worst culprits are Foreign. Under the cover of a western professional approach they gain time by telling clients that they looking to raise funds by negotiating with a big fish developer or just at the point of a signing a deal with this or that Bank. At the end of the day reality is faced and building work remains as it is, unfinished.

I suppose that the difference between Moroccan and (some) Foreign developers is communication. It must be cultural thing but many Moroccan businesses will simply ignore you when they have to provide a service or fulfill their commitments. Not exactly take the money and run but the feeling is that once they get their proceeds they are just not interested. In Morocco you will get an excellent service if there is something in for them short term, however, things change when the gains are long term and specially if there is work involved. Again, I’m not generalizing but the tendency is there.

Also sensibilities are different too and the feedback of those that have appealed to embassies, etc, is that they will lend a sympathetic ear but that’s about it. It has always been my feeling that the King isn’t really being informed of the finer points of this public image exercise for his country. I’m sure that if he ever knew something would be definitely done about the problem with a few heads rolling in the process.