Does anybody know why it is such a problem to borrow against 'rustica' properties. We have been trying to get a mortgage on one for some time and have now been told that because it is rustica and below a certain size you really need to be paying cash for it or only have a tiny mortgage.

Not entirely sure why,just thats been a problem since house prices started to slide!
May have something to do with the state of repair (is it a "fixer,upper"?),or with poss probs relating legality of the build,or just general worth of the property in todays market.

As your prob aware there's been a lot of probs with illegal builds out in the campo in recent years,and the market is on the slide,the reticence to lend is prob the Spanish equiv of the Brit banks withdrawing certain mortgage offers,and asking for higher deposits

We looked around Galicia and were told that its almost impossible to get Spanish mortgages on rustica property which needs renovation as they are considered to be relatively 'worthless' on their own.

We are lucky enough to be able to remortgage our UK property to buy the one we are purchasing now. Evidently when we have modernised it and started our intended business (B & B) we will be able to get a mortgage against the business much more easily as they are much happier giving loans on that basis.

Its crazy really as fincas are a safer bet what with that many dodgy villas and apartments coming to light ,many old ruins are older than the shady local town hall employees /mayor and so long as the ruin is mentioned on the escritura all should be fine,Spanish logic and English logic are so far apart its incredable,

Rgds

Rotor

Many of the old fincas were built before paperwork was invented, passed down through the family and never been registered at all.

The house isn't old, probably only 10 years. Could that be the problem ??

Thats very true but they can be registerd and an escritura (deeds) can be created,you then have to wait one or two years ,not sure which to see if anyone contests your claim, quiet stressful I`d imagine and I would not recomend buying anything without an escritura/nota simple as this is your only 100% gaurantee of ownership,

Rgds

Rotor

In a word YES ,is it registerd as a house or a tool shed? many late so called cortijos are actually registerd as tool sheds!!(if registerd at all!) there by avoiding proper planning permission,taxes and architects fees,hence of questionable build quality, and I would certainly understand a bank not offering a mortgage on one, in this case you are only really buying land as the "house" is arguably illegal and worth very little, it could be knocked down although this rarely happens,


Rgds

Rotor

There was a thread on here about someone had bought a toolshed thinking it was a villa and it was under threat of bulldozing.

Hope that your B&B is going to be registered with the Xunta or you may still find the bank will not lend you the money. They will want to see all the paperwork associated with the registration of your Casa Rural (B&B).
Good luck

How much land does it come with?

About 4500m2

Another problem with mortgages is that many lenders now require a certificate from the town hall to say that there is no pending legal action against the property which they are often unwilling to provide.

A lawyer who is a contributor to this forum says that you can insist and that they are obliged to comply with your request by law but he never answered my observation that if you try to insist they will indicate that they will find some reason to open a file against the property for a infraction of one kind or another.

The property registration and legal systems in this country stink and until someone takes them by the scruff of the neck and sorts them out these problems will persist.

I don't think this is going to happen any time soon.

As far as I am aware, for a house that modern it should be on 10,000m2 or more to be legally built on rustic land. Clearly, rules vary from place to place - some areas require much more land - so check with a good lawyer.

As has been commented many times previously on this forum, town halls can sometimes allow developments to take place on less than 10,000m2. At any time, the regional / national government could pull the rug, so to speak - as happened with the Priors. As I say, get a good independent lawyer.

We intend to go through the 'proper' registration process. We have heard that it can take 12 to 18 months to get it licenced assuming it meets all the requirements. Not sure if that is starting from our application (submitting plans) or from completion of the renovation work.
Anyone any ideas?