Madrid’s Town Hall Wants To “Completely Nullify” EMVS’s Sale To Blackstone

15 September 2016 – Inmodiario

The Town Hall of Madrid will ask the Community of Madrid’s Legal Advisory Committee to complete nullify the sales process signed between the EMVS (la “Empresa Municipal de la Vivienda y Suelo de Madrid” or the “Municipal Company for Housing and Land in Madrid”) and the fund Fidere Patriomonio, a subsidiary of Blackstone in 2013. The deal involved the sale of 1,860 social housing properties in 18 residential developments, for use as rental properties but with the option to buy.

That is according to the acting mayoress, Marta Higueras (pictured above, right), who has confirmed all of the measures that the Town Hall will take after receiving the findings of a legal report prepared by the law firm Alemany, Escalona & De Fuentes. That firm has studied all of the documentation and has reportedly found evidence of crimes. As such, it has also analysed all of the processes that may be launched to try and reverse the decision.

This request will be based on the conclusions of the “Audit Report of Sales Operations involving Real Estate Assets by the Empresa Municipal de la Vivienda y Suelo de Madrid, S.A. (EMVS) and controls performed by the competent bodies in 2012 and 2013” from the Chamber of Accounts, which was published in June this year.

This report concludes that the sale was performed “without preparing a sales document or conducting a study. Furthermore, the necessary technical feasibility and legal reports about the operation were not commissioned and the price of the assets to be sold was not set prior to their publication”. That meant that Fidere set the sales price and its price was accepted by the EMVS.

According to the Chamber of Accounts, the sale was completed at a price of €128,500,000, “below the book value of those properties, which amounted to €159,375,023.53”. Moreover, the regulations governing Adjudications of social housing properties by the EMVS were not applied, even though they had been approved by the Town Hall in 2008 and modified on 30 October 2012. Instead, the sale was governed by Article 18 of the Community of Madrid’s Rules govenring Publically Protected Housing.

The report makes it clear that the management and administration of the properties did not reflect the interests of the municipal company, “due to the possible weakening that this sales policy could have had on EMVS’ assets and therefore the Town Hall of Madrid, from whose benefit and corporate interests the EMVS strayed when selling these homes to the legal entities”.

In the event that the Community of Madrid’s Legal Advisory Committee declares the deal “completely null and void”, it would affect the preparation of the sale of the homes and the adjudication of them. In that case, the Town Hall will initiate a legal process for the courts to declare the sales contract and resolution null and void. (…).

Original story: Inmodiario

Translation: Carmel Drake

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