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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche. www.costaluzlawyers.es

Legal tip 409. Good for Murcia Appeals Court in favour of consumers!
07 December 2010 @ 17:35

Another good new today, a Court decission by Murcia Appeal Court by which it is established ( this has Case Law value), in accordance with other jurisdictions in Spain, that penalty clauses when consumers do not complete on off plan purchase contracts can be just of legal interests level ( 4-5% of amounts paid)

This.... against what many contracts in the Murcia area established : loss of the total amounts paid by consumer to developer.

Again in application of Consumer Law and good faith and balance contract principles.

Again... another proof of a healthy legal system :)

Cheers!

Maria

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18 Comments

Sean said:
07 December 2010 @ 16:42

Hi Maria
If you do not complete on an off-plan purchase does the developer have the right to sue you for completion? In my case I am not prepared to complete due to lack of promised facilities and they want me to pay an additional penalty as well as losing my deposit in order to walk away.


Maria said:
07 December 2010 @ 21:09

If the have noyt delivered all, or the lifestyle or the quality exposed in publicity and used for marketing, you do have rights for the cancellation of the contract and refund of all money paid plus legal interests.


Sandra said:
07 December 2010 @ 21:16

"another proof of a healthy legal system"

Yes and another nail in the coffin for those who drafted these abusive contracts. The judges should, ON TOP of awarding legal interest to the consumer, impose heavy fines for such blatent disregard for the law and consumer's rights.
It might just make these greedy developers and their lawyers think twice before drawing up another such contract.




firestorm said:
07 December 2010 @ 23:07

Hi we have been waiting five years now for our property to be completed.We have had the monies in our bank for 4and a half years waiting for completion but to no avail.We have had no contact from the builders or solicitors for the last eighteens months.Because we took a second mortgage out on our home we were paying quite a large mortgate out monthly to cover these costs.After some consideration we thought why should we be paying this amount every month and having no contact from the builders.We paid our mortgage off and low and behold we have heard from our solicitors that if we do not pay the balance in full before the end of Dec 2010 they will sell it on in Jan 2010.
Having put down a deposit of 55,0000euros and now being asked to pay a balance of 127,0000 within the next month is discusting.We have been very badly treated.We have no bank gauruntee does it look like we can say goodby to our deposit.
Your comments would be appreciated.


Maria said:
08 December 2010 @ 08:34

Id they sell the property to someone else before cancelling your contract and refunding to you all money less legal interests, they will be comitting a double sale crime. So they need to cancel a refund.



Maria said:
08 December 2010 @ 08:34

Id they sell the property to someone else before cancelling your contract and refunding to you all money less legal interests, they will be comitting a double sale crime. So they need to cancel and refund.



Maria said:
08 December 2010 @ 08:37

Sandra: I completely agree with you. This fines need to be imposed by Regional Consumers Authorities. Yes, it is time to start thinking of formally report of these practises. They do not give clients their legitimate deposits back but they clean the system


Peter said:
08 December 2010 @ 14:15

This is very good news Maria for Murcia, and the Spanish legal system in general. All the developers in the region should be made aware of this case and if they delay further in returning 95% of the money to clients in line with this decision, they should be forced to pay legal costs etc by the courts when the case comes before the courts, or else, there is no incentive for them to return the money early.


Peter said:
09 December 2010 @ 07:14

Peter, the appeal Court judgement comes with Costs being imposed to the developer


Sean said:
09 December 2010 @ 15:53

Thanks for all the comments. My first one was a bit vague. What I was asking was; if this case only allows the developer to keep 5% of the deposit paid then obviously he has to return 95%. However, I presume that you still have to have good grounds for not completing e.g. non-completion of facilities. So inevitably you still hae to go through the court process with all the risk that entails.
Sean


Maria said:
09 December 2010 @ 17:11

The scenario for this to apply is if, after you not completing on the property, the developer, between asking you to complete and/or cancelling the contract, decides to cancel the contract.


Sean said:
09 December 2010 @ 17:13

Thanks for all the comments. My first one was a bit vague. What I was asking was; if this case only allows the developer to keep 5% of the deposit paid then obviously he has to return 95%. However, I presume that you still have to have good grounds for not completing e.g. non-completion of facilities. So inevitably you still hae to go through the court process with all the risk that entails.
Sean


Sean said:
10 December 2010 @ 13:57

Maria Can you tell us which court handed down this decision and who was involved in the case. I would like the opportunityy to read the judgement. Many thanks


Maria said:
11 December 2010 @ 13:20

It was the provintial Court of appeals in Murcia. If you want, we can send to you the Court Case. Please emails us to that effect.

What was basically involved in the case is that developer wanted to keep all the amounts paid by the buyer as a penalty for breaching the contract and the Court is allowing them to keep just around 5% of those amounts.


Henry said:
10 January 2011 @ 11:04

Mara can you clarify the position regarding non completion when facilities etc are as described but the purchaser decides that it is no longer financially possible to complete - mortgage terms are to harsh.


Maria said:
10 January 2011 @ 11:08

It is necessary at least that you are denied finances by a couple of Institutions in order to deffend that the contract object has decayed.
We would be pleased to offer to you more information on this if you contact us.
Best regards,
Maria


oliver dempsey said:
07 March 2011 @ 15:51

hi . i paid a 40000 deposit for an apartment in Murcia June 2005
the company, Monthisa promised a mortgage would be in place on completion.the build completed last year ( 2 yrs late) and so far there has been no mortgage and no comunication by Monthisa. can you suggest an appropriate course of action and is there anybody out there experiencing the same difficulties.?
thanks


Oliver said:
07 March 2011 @ 16:34

I would be pleased to send to you some guidance but I would need to see the contract that you sent. If you want, you can email it to
web@costaluzlawyers.es
Cheers,
MAria


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