Legal tip 947. NEW! Spain Supreme Court and lack of financiation
Tuesday, May 14, 2013 @ 6:27 PM
In a decision dated January 13rd this year, the First Chamber of the Supreme Court confirmed the cancellation of a property purchase contract due to breach of the obligation of the seller to provide finances to the buyer.
According to claimants, seller had breached its contract, which expressly stated the right of subrogation of mortgage loan of developers, thereby ensuring obtaining the necessary funding for housing acquisition.
The Supreme Court had stated on previous occassions that the obligation to provide financing by developers is incidental ( non essential- no cancellatory), as reflected in the contract as an activity duty rather than a result duty, being the buyer, who is obliged to manage the mortgage himself.
However, in this new case, the reservation contract made by the seller included an offer of great commercial appeal, which was that "in any case, if you want, you can subrogate the mortgage of the seller". The developer promised that the bank would agree to subrogation and did not act sufficiently to fulfil this promise.
The Sentence keeps saying that if the developer was not in a position to offer an unconditoned financing offer to the buyer, this should have not been promised to the consumer on the contract.
Good for the pro-consumer Supreme Court!
Rota, Cádiz, Costa de la Luz, South-west of Spain.