If you walk away from a purchase, what are the potential penalties?

I've been informed by the lawyers that were supposed to be representing me that the developer has filed a lawsuit against me for not completing the purchase contract (see the thread anyone-who-has-walked-away-recieved-a-letter-from-prodinal-lawyer on the PortoFino forum).  They asked for around 10,000 Euros to represent me in court but I can't afford that amount and I don't really trust them.

How can I check if the lawsuit really has been filed and it isn't the lawyers lying to obtain more money from me?

Do I have a case against my lawyers for negligence for not informing me about the possibility of the developer doing this? (they told me the deposit was simply to reserve the unit - not that I was in danger of losing my house in the UK)

The contract mentions "judicial fulfillment".  What does that mean and does it give the power for the developer to seize assets in the UK?

Section 33 part 3 of the Spanish constitution states

3. No one may be deprived of his or her property and rights, except on justified grounds of public utility or social interest and with a proper compensation in accordance with the law.

If necessary, can I defend the case based on that?

Thanks.

Ask your lawyer for a copy of the law suit, you are in title to this.  At least then you will know if the law suit was filed

This is becomming a much more common trend where people want to simply cancel a contract and walk away loosing their deposits and I receive lots of e-mails for advice

I am not a lawyer and I know that there are people better qualified on here to advise you but logically I would suggest that your first action should be to get an independant lawyer to lokk at your contracts and then advise if there is a potential action been issued and this shouldn´t cost you very much

We regularly get feedback form both parties the deveopers and the buyers and I have some sympathy for the developers as they didn´t necessarly create the property or euro problems. I have seen their attitude, especially a few of the developers that are and have delivered properties, ontime with a Certificate of Habitation, change over the last 6 months and they have checked and cliam that they will easily be able to pursue buyers in the UK for the full amounts for property contracts

In the current climate they now have little chance of selling these properties to other buyers so now feel spending some money on UK legal actions is a good investment 

I would doubt if you have any case against the lawyer as they would have presented you with a contract, presumably translated, and explained the terms, but what you agreed was to buy the property at a price, by paying a deposit and then balances on completion,  when completed where your only grounds to cancel would normally have been if the property was over the agreed delivery dates or to to specification

Remembering of course that the property is not legally complete until a Certificate of Habitation has been issued

There are little known grounds, and i know that Maria has mentioned this that if somebodys personal circumstances change, if they loose their jobs or cannot now get a mortgage, and they can prove this with I believe 3 refusals form banks then there is a condition in Spanish Consumer law that enables the buyer to cancel their contract and get a full refund

Any legal action in Spain is lengthy and costly and I understand that European Law enable easier enforcement outside the original contract country but in your case you should only think about defending if you have actual grounds to defend

Juangarcia:

What is your address for notifications in the contract? That is the address you need to receive the lawsuit in. If it was your own address in the Uk, a Spain Court- English Court  communication is needed. If it was your conveyancing´s lawyer address, of course ask them to send a copy of the Lawsuit to you.

Of course, very recommendable to have full trust in your legal representatives. There are many excellent, fully qualified lawyers in Spain.

Regarding the possibility of asking you to complete on the purchase agreement, yes, there is a legal possibility of them doing this, but if you cannot get the forecasted financiation due to the present economic climate... you have got rights to cancel your contract and ask for your deposit back.

Good luck!

Maria

Thanks for the responses folks.

@mariadecastro - it seems that the notification address was that of the conveyancing lawyers, not our home address which is a shame.  And it sounds like now that court action has been initiated, we don't have time to change our lawyers which is unfortunate.

Where can I find the details of the law that states that if we can't get financing then we can cancel the contract?

Thanks.

@inspectahomespain - I appreciate your reply (even though it doesn't make me really happy, not your fault of course!).  I think that everything has been completed properly in any case.  The real issue that we have (again not down  to you) is that we were not aware that we were signing a contract that risked our property in the UK.  We thought the maximum loss was limited to the deposit which was still extremely painful to write-off.  And it sounds like when the developers win this lawsuit we will be incentivised to never work again as it will be a debt that we will never be able to clear in our lifetime.

@joanmalaga - thanks for the tip.  I now have seen confirmation that the suit has been initiated.

Dear juangarcia,

There is a defense by proving it has become impossible to complete your contract, and also there are many times that contracts include clauses that could help you to cancel the contract and even ask for your full deposit back.

It would be interesting to have a read to your contract and also to know when where you notified of this case, as you have 20 working days to reply (that works out to be around a month) and August does not count for these matters.

If you would like us to have a look, feel free to send me a pm.

Regards,

Hello guys - just another quick question along the same sort of lines.  Is it true that under Spanish law the developer should actually deliver the promised facilities that were advertised by the developer.  Ie that these are also actually part of the contract between the 2 parties even if not specifically mentioned in the actual contract.

Any views would be greatly appreciated and this may allow juangarcia to argue his case.

Dear Russ,

Yes, by Law the developer must comply with what was advertised, as any brochure, advert, etc becomes part of the contract.

Kind regards,

Thankyou - that was my understanding also.  The only problem seems to be is that many developers fail to appreciate the significance of this point.  I think it is scandalous that they often promise the "earth" and justify the fact that they have kept their word by leaving you with a pile of dirt where facilities should be.

Russ

http://www.eyeonspain.com/spain-magazine/publicity-contract.aspx

You may find it interesting regarding puiblicity as part of the contract.

Best regards,

Maria L. de Castro

Thankyou also Maria - you give a lot of hope to people who may otherwise feel lost.  I wish you every success in the future.

PS I love fiery / feisty / firm female lawyers - I'm married to one!

Russ

Russ, yes I agree. In many occassions developers have promised gardens, pools, sports areas, commercial centers... and in this economic climate they often just build the properties and leave all those other promises aside.

There is Case Law that states that the property is not only the house/apartment individually considered, but also its surroundings and "equipment", as one buys not only an apartment, but also an area, views, urbanisation, etc.

For this purposes, it is good to keep any relevant document that may proove what had been offered (brochures, artists impressions, etc).

I can see the point of providing all the advertised facilities, but for the people on the first phase of the development wanting to get a refund would they still be able to use this argument in a law case?

Would a judge not just say it is normal for the facilities to be built in stages over the course of the different phases.

inspectahome

many thanks for your continued postings and advice on these matters which i for one find informative and unbiased , is it not the case however that a murcia court has recently ruled against a developer for non delivery within a time period  or did i missunderstand the situation ?  any light on this matter would be greatly appreciated .

I  think that you may be reffering to the recent case against MASA at the development called Sierra Golf and this case was where 2 clients claimed a refund because the rpoerties were not finished and delivered to the agreed contracts dates and the `buyers went to Court and won refunds

The poblem with making any claim based on the delivery of facilities is when, as I know the developers say, that they plan to provide the facilities but do not commit to, either in the contract or any sales blurb, to a delivery date as on Polaris Wprld developments

All the developer has to say in Court  yes we will eventually build the facilities

Also what hppens if like on El Valle they build facilities but they are scalled down or as with United Golf they build the facilities but possibly because of the volume of people onsite they cannot get any businesses to move into the units, nice empty commercial centre