Tag Archives: Plan Azur

Le Jardin de Fleur (Saïdia) Property Logic

Le Jardin de Fleur (Saïdia)

Le Jardin De Fleur was supposed to be the flagship development within the macro-complex Mediterrania-Saïdia in turn one of the prototype state-of-the-art resorts planned under the umbrella of the Plan Azur 2010 tourism and infrastructures programs designed to quadruple the number of tourist to Morocco.

LJDF was, indeed, an ambitious project that even won some prestigious design awards. It’s variety of apartments, townhouses, villas and Riad style villas all built over 11 different plots ascended to 1342 units. The project also made a provision for in-house facilities such as sporting infrastructure, spas together with cafés and restaurants in addition to that available at the overall resort per se. In those boom years of the first decade of the 21st Century it naturally attracted a good number of International Investors and Private buyers with considerable success.

With the onset of the World Financial Crisis building works stopped in 2009 as it seemed that some of their funding partners went bankrupt and nothing has been done on the building front since then as the developer have found it difficult to raise finance despite impressive associations with leading players in the field and subsequent near misses. 2009 was also the very same year the King of Morocco, HM Mohammed VI, officially opened the rest of the macro-project which had and still has his backing. You have to feel for the Moroccan authorities who have fervently supported the launch of their country as a first class tourist and residential destination and to see some foreign developers, as it is not the only case, start and stop in mid-flight leaving thousands of bona-fide investors stranded coupled with the cost in image for the country as a whole.

Developers Property Logic had a clever marketing strategy, we all thought it a masterstroke at the time getting high-profile premiership players such as John Terry and Rio Ferdinand amongst others to do promotional work for them in return for discounted properties at LJDF worked at first but backfired later. It must have proven very embarrassing for the players so much so that the story was featured in an article in the Daily Mail in April 2013. The developer also collected considerable sums from off-plan deposits paid by buyers, a good number of them British including 25 footballers mentioned but there were other nationalities too. All of them are now with nothing to show for their investment and a great deal of frustration.

Property Logic published their last update also in April 2013 in all probability provoked by the newspaper article. This humble blogger has also tried to contact Sean Cusack, one of the directors there without success. The only information I have is what it’s published together with what I see on the ground in Saïdia and comments made by investors and buyers.

In the newsletter the developer admits that about 50 buyers have taken legal action in Morocco against them and insist that they are going to finish the development. They claim to have invested 10.5 million Euros with 60 or so million provided by the buyers in off-plan deposits. Two thirds of the 70 million went towards land purchase, construction and licenses with the rest going into design, marketing, sales and agent’s commissions.

The 10.5 million euro said to have been invested by the developer, was according to the update, invested by Estonian businessman, Margus Reinsalu through his company KC Group who are also active in other developments in Brazil. There are two further partners involved in Property Logic according to the April 2013 newsletter, the aforementioned Sean Cusack and one Joop Huisman. As KC’s initial loan was not repaid they took over the majority of the shares according to a certain 2009 agreement when building stopped. However Cusack and Huisman appear to still have the option of to reclaim their original equal 2.6 million euro stake in the venture. Property Logic Invest (Spain) also has equal interests in the project with KC, Cusack and Huisman as members of the board.

The Mediterrania-Saïdia resort as a whole is about 45% complete as we write in October 2013. It is now under the control of CDG an important Moroccan Company specialized in the field who intend to finish off the resort including the 9 luxury hotels originally planned. At present there are only 3 hotels operating but they have not fulfilled their intended grand role to cater for the international jet set with many that would have arrived in their luxury yachts at the Marina from places like Monaco and Marbella. Just one look at the hotels gives an indication of how things have changed for the worse. They close their doors in winter and its summer clientele are tour groups and civil servant from nearby Melilla on weekend outings. 50 or 60 euro all in will give you a stay in a supposedly five star grand luxe, gin tonics in plastic cups notwithstanding.

At the very least both Reinsalu and CDG are saying that they intend to finish off their respective projects. Obviously CDG have it easier as they are one of the biggest operators in Morocco and still have the backing of the government and the Monarch. Nevertheless Property Logic are keeping their clients informed from time to time even if it is to say that they have nearly missed yet another important funding scenario or that they have joined up forces with some big fish investor from a far off land. Credit has to be given to them though which is more than you can say for other foreign investors/developers.

If you are a disgruntled investor in LJDF what are your options?

1.)       Sit pretty and hope that PL’s messages become a reality that is to say you are going to finally get the property you’ve bought. Better late than never as they say.

2.)       Politely ask for a refund that you are not going to get. No money.

3.)       The logical antidote for this type of situation, not the panacea but at least you will be protected is to take legal action and get a Moroccan Court to allow for a lien to be inserted against the assets of Property Logic Morocco. This is a type of preventive embargo that will secure your rights if there are any negative official movements against PL, exactly what the 50 or so people that the newsletter mentioned did, they will not get their money back immediately but they have their name officially recognized as a creditor. For more information about legal action see my articles of August 2013 at the beginning of the blog.

The worst case scenario would be that any potential negative official movements bypass the original buyers. A lien will safeguard your interests as the hypothetical new owners would need to take creditors legally into consideration before they do anything else. Let’s hope that this doesn’t happen, for everybody’s sake including Property Logic themselves.


Property Logic Newsletter 05.04.2013

The Daily Mail

Own Sources

Will you ever get a Mortgage?

Getting a mortgage in Morocco has never been easy for foreigners whether they were residents or not. As in many other areas the cultural gap always seems to creep up. Must be this innate Moroccan ability to charm birds off tress but even in the best of times (2005-2007) the hour of truth always imposed itself and all the previous promises from banks, developers and agents alike went from the original ne pas de problèmes  to a straight non. Many investors thought that when they got their letters of intent from their bank that was it but alas this is another world and paper doesn’t necessarily hold water (o promises) here. Ask the many distressed developers who attained fantastic promises of finance in writing with the honest intention of perhaps also making it extensive to their clients and see, just see how it all came to nothing.

For this modest writer there has never been a credit crunch for private individuals in Morocco simply because there has never been credit! At least my long and personal experience says so. Put it this way, banks or any other institution for that matter are not really there to help (and then help themselves in a macroeconomic way), the whole scene works how can I say, in a more… micro way.

This has been real life for me but let’s see how Bloomberg, obviously more concerned about the really big boys, described Morocco’s so called “credit crunch”. So… if Bloomberg says so it must be true. I have to be honest I never got near these players so I couldn’t say, but have my doubts though. In an article that appeared in January 2013 but probably still applies today (September 2013). The first very surprising paragraph bluntly tells us that Morocco’s drive to emulate Dubai’s by turning itself into a playground for rich Europeans was halted due to the lack of investment in the luxury resorts as from the beginning of the global financial crisis as “cash strapped” banks (my inverted commas – I know I’m a tough nut) were hit. This is partially true, Morocco’s Plans Azurs; that is government tourist development and infrastructure plans, had that aim but making comparisons with Dubai and putting the spotlight on the banks is going a bit too far. More to do with the aforementioned financial crisis and how it affected everybody I would say.

The figures are there, the country’s tourist visits climbed to 9.3MM in 2011, very close to the projected 10MM under Plan Azur 2010 but, and here is the but… 83% of those visitors were from Europe who were specially hit by recession in their own countries immediately after that. In any case, I’m pretty sure that the bulk of the aforementioned tourists were that, tourists per se and not necessarily international investors or individual buyers. I am pretty sure that the buyers stopped coming around 2008/9.

Nonetheless, Bloomberg did confirm that homebuyers and companies grew at the lowest pace in a decade last year (2011) through to November according to Central Bank data in September (2012). But grew nonetheless which is shocking but what Bloomberg doesn’t say is who these homebuyers and companies are whether domestic or international. They add that due to this, said Central Bank allowed its supervised banks to reduce reserves to increase liquidity or money in circulation, which in itself is a contradiction in balance sheet terms.

Morocco, like Dubai (here we go again) was in the midst of a major tourist expansion when the global financial crisis stuck, causing investment to tumble, affecting property developers with banks and investors increasing their Real Estate debt. Big boy developer finance apparently surged in the two years before the market stalled in 2009 and with much of the debt maturing this year (2013) it will initiatively lead to the usual vicious circle of distressed property offloads a la southern European  and bank balance sheets full of nasty bad and doubtful debts. Bloomberg innocently calls this outcome “property sales”. You bet…

So here we appear to have a certain overexposure to commercial real estate mainly tourism-related which will limit bank advances in 2013 coupled with the fact that the Moroccan market isn’t mature enough to recover all these projects which in themselves are too big and ambitious to be completed by Moroccan players. And… there is no EU to come to the rescue.

Mortgages peaked at 57% in the first 11 months of 2007 and lending to developers jumped almost six-fold in that period (I must have lived in a different planet – how scary) but according to Central Bank data and like in Dubai (uugggg) projects stalled in the midst of the great US housing slump and the subsequent ignition of the global crisis.

Here is another one: The Arab spring caused mayhem in a number of North African countries but thankfully left Morocco aside but nevertheless the country paid a certain price with economic growth slowing to 2.9% in 2012 as compared with 4.9% in 2011. In addition to this we had Morocco’s chronic decease, droughts, which caused agricultural output to drop by 8.4% in the third quarter of 2012 which obviously had an effect on the country’s trade deficit, down 11.9% in November.

Like in those economies once highly dependent in Property and Tourism such as those of southern Europe we apparently have a situation of overexposed banks in the real estate sector whose priority in to complete those projects they are already involved in and forget everything else. Unfortunately for the banks those Projects were mainly targeted to foreigners that have simply stopped investing.

The Plan Azur 2010 provided for the building of six mega-resorts together with the infrastructure around them. The crisis prompted foreign investors to look for an exit halting further development. Amongst those projects was Mediterrania-Saïdia, the only one by the Med, as the rest were planned for the shores of the Atlantic. What should really have been the playground of the jet setting rich shuttling to its 800+ berth marina from relatively nearby Marbella has become semi deserted with only 3 of its 9 luxury hotels operating and that in turn are now relegated to cater for Spaniards from the enclave of Melilla a few kilometers away on super budget weekends all in.

The Central bank also say some, for me, very puzzling things. Like for example that private sector lending increased (yes increased) by 2.8% the lowest rate since 2002 when it was 1% with loans for housing rising 6.8% for the eleven months through November again the smallest increase since 2002. The reserve ratio of banks was thus cut from 4% to 2% to counteract “liquidity shortage”. Almost needless to say, banks now have a very selective (if at all) approach to request for funding.

In its heyday mortgage rates ranged from 5.5% to 6.75% whilst developers offered finance at rates ranging from 6.21% to 7.75%. However I have met very few foreign clients that have obtained finance from banks, promises yes, finance no, and certainly none that have got it from developers.

Obviously developers as at today (2013) have totally rationalized their approach to building mostly to pay off or restructure their loans as they mature. The general bottom line is to offload their assets before they get in even more trouble.

Another thing altogether is the incentives offered by the Moroccan Government to encourage the building of low cost subsidized housing in a nation of 32MM people. FOGARIM is a state fund that guaranteed mortgages as long as 25 years for low-income workers. The loans cover as much a 100% of the purchase price applied to homes that don’t exceed 200,000 Dirham.

Spanish developer Fadesa, the original Fadesa that is, who were awarded for a song the Mediterrania-Saïdia Plan Azur project by the government in 2003 was also asked in return to contribute to the building of social housing as well as the improvement of general infrastructure and even a clinic in Saïdia town. Le Jardins de Moulouya a complex of over 22 hectares and only 1Km from the beach were thus built under this umbrella. This idea was quickly picked up by the relative higher earning Moroccan expatriate workers in Europe who saw it as an investment opportunity. The idea was good and well intentioned but like many other things it may not have achieved its aim.

Coming back to the King backed Plan Azur 2010 which came under the wing of Vision 2010 tourism strategy originally sought to more than double the number of visitor beds to 230,000 up to 2010 only achieved under half that amount when the crisis started in 2008 starving the market of takers. Needless to say the six mega resorts under the plan suffered the consequences of this scenario with about half now being built. We are now in a position where the government has to reset the Vision and make it 2020 to meet the goal.

Property owners in some parts of the kingdom including Marrakech are facing the value of their properties, many in semi deserted resorts with relative unused golf courses going down in price with villas now at 50 or even 70% of their original “happy days” price. Some homes in the centre of “can’t go wrong” Marrakech that were priced at 20,000 Dirham per square metre can now be bought for about 12,000 or even as low as 8,000 Dirham per square metre.

However, the Taghazout Plan Azur Atlantic coast project has now been restarted under the new Plan Azur 2020 with a new goal to double tourists by that year according to the government. It remains to be seen how the present signs of recovery in Europe, Morocco’s main source of visitors, will affect the revival of the Kingdom’s tourist industry since France, Spain and Italy provided the bulk of pre-crisis visitors and potential investors.

The customers have changed, there are fewer foreigners buying but this is cyclical and one would hope the trend will change, say some experts in Morocco but… Will it ever be the same again?

The bulk of this piece is taken with permission from the Bloomberg article of January 2013 with my own comments thrown in, mainly to balance up some data typically offered by foreign journalist from their Kuwait desks.

I cannot offer a firm conclusion of how things will evolve with the Moroccan tourist and real estate market because I am still not sure even that I try to get as much information as I can. To offer a firm forecast would be misleading and commentators should know better. One hope is Europe’s recovery in the next few years but I would tend to think that people have learnt their lesson by now. It will be stupid to hope for the riches of the good years but this goes for Europe too.

JL (Melilla)

Morocco Tourism Logo

Morocco Tourism Logo

King Mohammed VI has always been well aware of his country’s tourist potential. The Plan Azur 2010 and it’s follow up Plan Azur 2020 is a clear exponent of his dedication to the cause. We have seen considerable success and a vast improvement in general infrastructure around the major macro projects planned for the Atlantic and Mediterranean Coast. One such project is “Mediterrania-Saïdia” all 7MM Square Kilometres of it. Unfortunately the Global Financial Crisis and the unsettling events in the Arab World have slowed down its development. Nevertheless the announced improvement in the economy coupled with Morocco’s solid stability within the Arab World should shed some light into such wonderful prospects. For this blogger, he would like to see some further movements around the Al Hoceima area where the beaches and the environments are ripe for development. We have already seen the building of an excellent road from Nador/Saïdia (part of the Plan Azur) and its port and airport are a stone’s throw from the Southern Coast of Spain and of course, the Costa del Sol.

Taking Moroccan Developers to Court

I’m back after the summer holidays but, unfortunately, to a tragically familiar story. Buyers of overseas property who have spent their hard earned money and received absolutely nothing in return. The biggest culprit for Irish and UK based investors appears to be, by far, Morocco. Hence the unpleasant vista of taking Moroccan developers to court. Unfortunately, in many cases, there just doesn’t seem to be any other way to get even a portion of your funds back.

This article is based on a piece written by my colleague, Jorge Larios, with whom I’ve been working for some time helping distressed investors in Morocco. I’ve merely edited it somewhat to suit a UK and Irish audience.

Taking Moroccan Developers to Court – By Jorge Larios

Morocco wasn’t really a residential tourist destination until a well known developer from northwest Spain called Fadesa came along. There were always classic Riads within historic cities and some timid efforts at construction along the Atlantic coast but that was about the size of it.

The arrival of Fadesa from Spain in 2005 kicked off with the launch of Mediterrania-Saïdia with much fanfare (the outlay on a launch cruise in the Mediterranean alone was eye-watering). This was part of a number of macro projects along the coastline which were all under the umbrella of the ‘Plan Azur 2010‘, an ambitious government plan to quadruple the number of tourists by that year. This government backing of the project was very important. It was heavily promoted in all developer promotional material and gave foreigners, that might otherwise have eschewed Morocco, a level of confidence to go and invest in the ‘new Spain for property investment’ now that Spain had become too expensive.

So here was Morocco being heavily promoted as an alternative to the Costa del Sol and that message was very successfully delivered. To get an idea of how the story progressed you need only read some owners forums to see how the initial euphoria dissipates and gradually reduces to a cry for help. The scenario swings from trying to get a reservation at all costs in a wildly overheated market to being prepared to accept a loss just to get some of your money back when investment conditions have changed utterly.

The disturbing thing for investors is that the basics of a sound market are there, the delivery from developers along the coastline has, however, been appalling. To be fair, it is not all their fault, the financial landscape for property construction has changed utterly – as it has almost worldwide. It is also important to stress that, much like other countries where property markets have gone wallop, many of the culprits are foreign and were only ever there for the short haul. It is also important to mention that, contrary to popular opinion outside Morocco, the Moroccan authorities are very keen to find solutions to these problems and the legal system works if you use the system properly.

Morocco as a country is growing economically at 4% and has very good relations with the two ex-colonial powers, France and Spain. This extends its reach into the European Union and within the Arab world it is considered one of the most stable countries politically. This allied to its quite moderate religious outlook, made it quite an attractive destination, it was well capable of carrying ‘the story’.

The issue for most of you reading this is not how good ‘the story’ was delivered, it is ‘what are the chances of getting my money back from Morocco?’

Essentially, you want to know is it possible to get your money back if there is a breach of contract on the part of the developer? The answer is a cautious yes, but it very much depends who you are dealing with and how strong your case is. Having reviewed your case and designated it as strong, a refund will only be forthcoming in most cases by taking Moroccan developers to court.

Taking Moroccan Developers to Court – Why is it Necessary?

Moroccan developers can be largely categorised in three groups. The cynics, and there are many at this stage, suggest it should be in line with their ability to ignore you. They all do this unfortunately, it is simply part of the culture. You need to show them you mean business to get noticed. The categories are:

1. Developers with money – in many cases you know the developer has got money but they’re good at hiding it from you.

2. The Developer is insolvent – they will all tell you they’re looking for finance, and some are, but others are insolvent beyond any hope of redemption.

3. The developer has simply disappeared – some were, unfortunately, set up to defraud investors from the off – headquartered in a distant Caribbean Island with well paid lawyers in another civilized and distant region.

A word of warning: Don’t think that appealing to documentary proof or people’s common sense will achieve anything – this is Morocco. You will be very lucky if you get somebody at the end of the line. Some are still complaining because emails aren’t answered. This is, unfortunately, only the start. Communication is not an art form that Moroccan developers have made any great attempt to master.

When you are on the trail of a Moroccan developer you will hear and read many stories about owners getting together to join forces, the Moroccan Embassy, Rabat, the King, God, and pretty much everything else. Unfortunately, none of this works in Morocco. These are western suggestions at solutions to a Moroccan problem.  If you do manage to get hold of somebody they’ll charm the socks off of you and you’ll still leave with nothing. It’s just like that in Morocco.

The unfortunate reality of dealing with this area is that nothing happens unless you take Moroccan developers to court – that’s just how it is. The Moroccan legal system works – investors need to learn how to use it. You need to ascertain firstly that it is worthwhile taking Moroccan developers to court – there’s no point if they’ve got nothing to give you. But eventually, even if they do have money, you’ve got to go the legal route to get it from them.

This article, which is the first in a series, was kindly submitted by Jorge Larios based in Melilla, a Spanish enclave in Morocco. He has considerable experience in dealing with the preparation of clients to take on developers in Morocco, be their Moroccan or foreign. If you wish to find out more drop me a line on: saidia@gmx.es

The Morocco Experience: Will you ever get your Money back?

By Jorge Larios

Morocco wasn’t really a residential tourist destination until some folks from North-West Spain called Fadesa came along. All right, there were always the classic Riads within the historic cities and some timid construction along the Atlantic coast but that was that.

The arrival of Fadesa in 2005 kicked off with the launch of Mediterrania-Saïdia with much fanfare (how much they spent in that cruise in the Mediterranean I shudder to think). This was part of a number of macro projects along the coastline which were all under the umbrella of the Plan Azur 2010, an ambitious government plan to quadruple the number of tourists by that year, or so they said.

So here was Morocco as the alternative to the Costa del Sol and the message got though (somehow). For a sample of this madness you only have to read some owners forums and see how the initial euphoria gradually diminishes into a cry for help. From trying to get a reservation in at all costs to being prepared to accept a loss just to get your money back. Cannot help thinking of some biological function to do with men after a little excitement but I won’t mention it.

Morocco as a country is growing economically at 4% has very good relations with the two ex-colonial powers, France and Spain of course extensive to the European Union and within the Arab world it is one of the most stable politically. No forgetting the fact that it’s quite moderate in its religious outlook, ever so important in the region. But a man doesn’t live on meat alone as they say. As in other tourist destinations you are dependent on the economic health of your clients and we know what happened in the last five years.

Coming back to business (and reality, this is 2013 after all) and for all the distressed buyers out there. FAQ: Is it possible to get your money back if there is a breach of contract on the part of the developer? The answer is YES but it depends who you are dealing with, how strong your case is and only if you take the developer to court.

I like to catalogue developers in three groups. This is not in line with their ability to ignore you because they are all just as slippery.

1. If you know they’ve got money (but they’re playing hard to get, literally).

2. If they are broke (they’ll tell you they’re looking for finance – A classic in our trade).

3. If they’ve disappeared. (Didn’t you realize their Headquarters were in a distant Caribbean Island and their lawyers in a very civilized far away land?)

4. The honest, trustworthy and reliable developer who gave you what you paid for. (Only joking, sorry – take the above three only). There must be some out there.

Before I tell you how to go about dealing with this lot… A word of warning: Don’t think that by appealing to documentary proof or people’s common sense you are going to get somewhere. You’re not, you will be lucky (very) if you get somebody at the end of the line. So, you are still complaining because your emails aren’t answered? Ha.

And what do you say of all those amusing stories you read about owners getting together to join forces, the Moroccan Embassy, Rabat, the King, God, blah blah. Complete and utter rubbish, these dramatic manifestations “a la western” doesn’t cut ice with the Moroccans I’m afraid. Oh, and if you do manage to get hold of somebody you are going to leave like a Royalty with the times ne pas des problemes were thrown in. The Moroccans do have this ability to charm people, after all, the oriental bazaar is an Arab invention but I’m Spanish so I can safely say… nada de nada, amigos.

What to do:

Case 1: The Bottom line: A Moroccan Court can and will rule in favor of a buyer if there is breach of contract. If the property has not been delivered on time or has not been built to specification the buyer has a case. This is the more straightforward scenario but there are more complicated ones. For instance some developers are taking advantage of people’s desire to cancel their contracts even accepting a 25% loss by issuing “a protocol” or cancelation letter which is sent to the buyer for signature and returned. Sometimes, the letter is never signed by the developer. This is really done with a view to selling the property to a third party. Even if the property is sold, the client sometimes doesn’t get their money back as it is a well known tactic to take things to the wire (legal action) the developer clearly playing on people’s hope to wait and not wishing for the hassle of going to court. There are even cases where properties under private contract have been re-sold without the owner’s knowledge. You would think that such a drastic act would merit a refund together with compensation “a la western” all laced up with a sincere apology. Forget it, just get hold of your nearest lawyer if you don’t want to waste valuable time and worse still wear yourself out. One final thing, some developers (for example “old” Fadesa) used to include a Bank Guarantee in their contracts which may now be enforceable in Spain and in some cases Morocco. This is still the practice by some developers in the land of Cervantes. For some reason (put it down to ignorance) Fadesa even did this with Moroccan Property at the beginning of their Moroccan adventure in spite of the contracts being signed under Moroccan law. The Bank guarantees in theory are there to protect the buyers from breach of contract or bankruptcy by the developer. This was a system used in Spain before the property bubble created such a demand that some developers felt unnecessary to continue the practice as they were going to anyhow sell the property to the first one in the queue no questions asked. In this scenario it is not the developer who refunds the money to the client it’s the Banks. So, if you are one of the chosen few with such “avales” as they call them. Don’t sit still; take it to your Santander, BBVA or whichever is the “unfortunate” Banco and demand to be paid. First check and make sure the guarantee is not out of date, even if it is it can be fought in a court of law in Spain by a good lawyer as a judge could not consider reasonable that a developer could delay delivery or not finish building within a certain time even if the property is in Morocco. If this fails, court action in Morocco it is. It will take going to court about 3 years on average before you see light at the end of the tunnel though.

Case 2: Here the situation is of a bankrupted developer that still shows signs of life. They will gallantly contact clients, have forums and generally keep them informed. Well, that’s the theory at least. Some of them will say that they are looking for finance to finish off construction and tell stories of near misses in their quest. However, the harsh truth is that they have stopped building and in some cases facing the possibility of their assets being taken away, the pie shared with creditors and the whole thing moving in a different direction. The only tiny hope for buyers is getting in the queue with those other creditors as they are not going to get their total money back for the time being and if and when they do it may not be for the full amount of what they’ve paid. It’s what we call in Spanish (roughly translated) “Saving the Furniture” in other words; hope that you get something from that pie. So, how to go about joining the queue?  Court action in Morocco, hope for a ruling in favor and if successful placing a lien (embargo) on the assets of the developer. FAQ: How do we know how many other creditors are there? This information can be obtained from the local land registry but what’s the point, the list will increase as more and more buyers (and suppliers, and ex-workers and banks…) put liens in and what’s more important: How do we know how much those assets are going to be valued at? In theory when those assets are shared and I repeat this is theory, the amounts recovered will depend on the price paid for said assets by the new owners and in the case of bankruptcy any factors considered by the judicial administrator. The amount invested by clients should be taken into consideration but there could be many other things involved. For this to happen individual buyers need to become official creditors and this is only possible with a lien. If people sit still and do nothing: Reach your own conclusions… UNLESS of course: there is a miracle and the developer gets their finance and its business as usual. Or so they said back in 2006.

Case 3: the disappearing act merchants: I’m not going to waste my time writing and if I were a buyer here I would kick myself in the posterior for believing that convincing agent and get on with life. Save money on lawyers, consultants, etc. Not worth it.


A lawyer with experience in Moroccan Property Law should be appointed who will ask for a copy of the contract, proof of funds paid and copies of passports. All lawyers will ask for a Provision of Funds to initiate proceedings that is usually in the region of € 3000 to € 4000 in addition to court taxes at 2% of funds claimed also payable at this stage. There may be sundries of € 300 to € 400 that will cover translations, land registries, phone calls and other administration. If the case is successful, the overall fee could range from 10% to 30% of funds recovered. The provision of funds paid beforehand will be deducted from the resulting figures in favor of the client. All cases take place in Morocco.

Just a final note, Morocco is a great country and its institutions work. The problems we are talking about here are not exclusive to this country alone as there are inefficient operators everywhere. In fact a good number of those developers who joined in the gold rush were foreign. Of course the country has its own way of doing things, have different sensibilities and this for some foreigners can be quite frustrating. However, many of us believe in the Moroccan Legal System, a system that have proven efficient and operational in many occasions

Jorge Larios

Morocco Property Consultant

Melilla (Spanish North Africa)