Hot Property News Letter – May 2009

We are indebted to Mr M for sharing this tale with us all. Mr M bought his property in Spain over 6 years ago, and we must add NOT FROM HOT PROPERTY. He obtained insurance from a very good company via a broker recommended by the Agent and paid the premiums on time and as requested.

During the recent storms, Mr M´s villa was damaged and he contacted his broker, who told him because the storm was declared a Natural Disaster, then the Consorcio de Compensation would be sent all the details. This was not something the Mr M was aware of, so what, or who is the Consorcio de Compensation?

As an explanation, the Consorcio de Compensation is a department which comes under the Ministry of Economy, and was set up in 1945, the role of which is basically a fund to ensure that insurance companies are protected against large losses that may stretch the companies beyond braking point.

By law in Spain, every insurance and pension scheme, has to pay into the fund and if, as the insured, you look closely at your insurance receipt you will see that a percentage of the premium is going into the fund.

Some people believe that, in these circumstances, the payments come from the town hall, and therefore why bother paying for insurance in the first place? This is a great misconception and as Mr M found out the scheme will only pay out if you are correctly insured, which brings us back to Mr M’s tale.

The premiums paid by Mr M were based on the size of his Villa and, unfortunately, the original details given by the agent to the insurance broker were incorrect and therefore Mr M was under covered by 50%. This resulted in the Consorcio de Compensation agreeing to pay only 50% of the repair cost.

On the good side, the paperwork and inspection was all carried out quickly and payment made before the repairs were commenced and only one quotation was required, but Mr M had to find the outstanding funds.

Needless to say, Mr M are making are now paying the correct premium and he is grateful that the damage was not too severe.

The moral of this storey is to ensure that all your property is adequately and correctly covered. The Spanish system is unique, but it does work and, when considering insurance, always go to an experienced broker and ensure that he knows the full value of your property and belongings and that you have the policy that is best for you and your circumstances.

Insurance will only pay out for what you cover and this fact is relevant to all countries, not just Spain.

2: CENTRAL HEATING

Unless your property already has central heating for those two to three months when you might find the need to warm your property, anyone looking to install heating has to ask themselves these questions.

Do I want heating at all, as I do not use the property in the winter?

Is the heating mode on the air conditioning a better alternative?

Do I have a working fireplace for burning wood?

Do I want water-filled radiator central heating?

Do I want under-floor heating?

And when the decision has been made to install central heating, the final question is whether to install an Oil or Gas fired system?

Oil fired:- The installation of an oil fired system is generally the simpler method, particularly when it comes to locating the storage tank and obtaining permissions.

The tank, which generally has a 1000lt capacity, is purchased and can be placed just about anywhere.  However, consideration has to be given for deliveries which, depending on the size and use of the property, will be about once a year. As the tank is translucent, it is quite clear how much oil is delivered and in the tank, so there is no need to rely on pressure gauges.

The delivery tanker is fitted with a long filling hose.  However, there is a limit and the heating engineer will be able to advise final location.

Deliveries can normally be arranged within 24 hours, so to refill with say 900lt (you never let the tank run dry) will cost (as of April 2009) 500€.

The cost of oil does vary depending on the price of oil generally and, in the last 12 months, has cost up to 88cents/lt. It is now 55cents/lt.

One other factor is that the oil delivery can be quite a smelly process as fumes are discharged from the tank, however this will dissipate within an hour or so, and the fumes from the boiler flue can be more noticeable, so correct location of the boiler is important.

Gas fired:- The installation of a gas fired system is a bit more complicated and is subject to approval for the location of the cylinder storage. It will be necessary to construct a solid walled storage building, or gas casita on the boundary of the property and to install a gas feed pipe from this location to the boiler, which will invariably cost more than the tank for the oil fired system.

A normal gas system entails the rental and installation of 10 gas cylinders, 5 on and 5 off. There is a change over valve to move from one set of cylinders to the other. The contents of the cylinders is indicated by a pressure gauge. It is up to the house holder to decide if they let the gas run out completely before changing to the next set and subsequently ordering replacement cylinders.

As an alternative to cylinders, it is possible to either buy or rent, depending on the suppliers, a large stand alone external gas tank. This tank has to be sited within the property in an approved position again with consideration being given to deliveries. Depending on location, it may also be prudent to screen the tank with conifers etc as they are not the most attractive of garden ornaments.

A recently released national institute of statistics survey showed that the life expectancy on the Costa Blanca for women is an average of 83.45 years and has risen by 3 years in the last decade alone. This is 6 years more than for men, whose life expectancy is 77.5. These figures are some of the highest in Europe.

When you are a child the time seems to pass very slowly, but as you get older the years flash by. So for those of you thinking of moving to Spain, we can only say, "DO IT” and enjoy a life in the sun, with a healthy Mediterranean diet, and live longer as well.

Life expectancy table: