Developer Fees

Is it normal practice for developer to charge euro500 for cancellation of mortgage that we neither asked for or want to take up offer.

How can it be "cancelled" if you didn't sign up for it ? IF you DID sign up for it then mebbee, ask your lawyer. That's why you have one .. to protect you against such problems.

Paying for the cancelation of the developers mortgage is a typical abusive contract clause . Under consumer laws it is NOT the responsibility of the buyer.

Lawyer said we have to pay but has not got back to us in days when we advised  we were not paying.  We are not getting response to our emails to Lawyer. 

If you are in early stages of buying as it sounds you are CHANGE LAWYER, (mebbee)

 

We got our lawyer to have the mortgage cancellation fee cancelled when we refused to complete otherwise. It is illegal according to Spanish consumer law yet developers put it into contracts and buyers legals dont seem to be picking it up. It seems that a buyer does not have to sign a contract with this type of abusive clauses.

Jerry

Sorry wish I had seen this question earlier but must have been posted when I was away or very tired - would have confirmed then that it is illegal for the developer to make you pay to cancel the developers mortgage - far too often lawyers roll over on this and let them get away with it.

Speaking of the mortgage cancelation fee, when my independent lawyer (gestora) signed the private contract on my behalf in March 2003 she informed me that we would have to pay €600 euros if we did not take up the mortgage, not knowing any better I believed her, having read this thread I now know better. This gestora has given me cause for concern over other things as well which means I am now in the process of changing to another Lawyer. A question for Smiley or anyone else that may know, the developers have inserted a clause in the contract to say that I have to pay a penalty of 30% (flat rate) on any payments made late. This 30% flate rate is extortionate and am wondering if this amounts to abusive or unfair contract terms?

Ilegal, null and void.

I guess we have been lucky. Our lawyer revised our contract to say that if we decided not to take out the mortgage then the developer would pay all cancellation fees. This was at his instigation. Mind you it's only a very small developer and we have a terrific lawyer who has saved us a couple of potentially costly mistakes. If anyone wants a recommendation please send me a private post.

Great idea to insert the clause then there is no uncertainty but in fact it is illegal for the developer to charge the cancellation fee to you.

Maria & Smiley and anyone else - help please,

Don Juan, a developement in Carvajal Fuengirola got it's first occupancy licence on Friday. The purchase contract stipulated a charge of 750€ if we don't take the developer's mortgage. Based on advice on these boards I thought I had agreed that we would not be paying this money. The first completions have now taken place and they were faced with "pay the cancellation charge or don't complete" and they have paid up! I bought through Viva and used their recommended lawyer Lex Marbella. They now tell me that if I refuse to pay they cannot complete. I have sent them the English translation of the law (thanks Maria!) and explained why I cannot be required to pay and they have come back with a reduced fee of 400€. I want to complete. What should I do now? And what should the rest of the EOS members from our active developement forum do?

 

If they have aready reduced the fee, bearing in mind that a) its illegal and b) they will be desperate for you to complet, then hold out - be confident and see if either the agent or the lawyer will swallow the pill as its not your fault!

But be prefared to have to pay it as you want to complete

Good luck

Davmunster:

Provided you communicated to them you were not getting the developers mortgage. Or better said you never state you would get the developer´s mortgage:

You cannot be threatened with the possibility of not getting the property because of that. That would be a crime. Ask for the legal full payment of cancellaton fee by developers and if they persist on asking you on that till the moment of completion you can, at the moment of the signture, produce a notarial statement by which you prove you have brought the money to signing of deeds and have  fulfilled all you contract obligations, being them who do not want to complete unreasonably. They will incur in the estimated penalties for breach of contract ( as per contract  or Law)  and a report for extortion can also  be placed against  them.

 I wouldn´t capitulate. It is a basic contractual right and it is clear and fully protected by Consumers Law. The clause in the contract ( if any) who imposes that obligation on you is illegal and therefore is null and void.

 

Justin will be posting soon a contract model by Consumers Authorities which protect all your rights as consumers.

Thanks Maria and Rixxy for your help - I'll battle on!

I just read through the contract I have with Key Mare and it states exactly the same, that should the builder's mortgage not be taken, the relevant fees are to be paid by the purchaser. I have been in touch with my solicitor, who has told me that he has refused to sign this document because of that clause and that we are going straight to completion.

Mark