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El blog de Maria

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Legal tip 1348. NEW! WON CASE in PROVINCIAL APPEAL COURT AGAINST BBVA FOR PROMOCIONES EUROHOUSE BUYERS AT RESIDENCIAL FORTUNA GOLF RESORT & APARTAMENTOS TURISTICOS PUEBLO LA SAL
27 November 2015

WON CASE in PROVINCIAL APPEAL COURT AGAINST BBVA FOR PROMOCIONES EUROHOUSE BUYERS AT RESIDENCIAL FORTUNA GOLF RESORT & APARTAMENTOS TURISTICOS PUEBLO LA SAL

We were extremely pleased to inform our clients today that we had won their case against BBVA in the Provincial Appeal Court.

The clients did not receive individual Guarantees from the developer, Promociones Eurohouse 2010 S.L. or from BBVA, the Bank to which part of their off-plan deposit was paid.

The First Instance Court had condemned BBVA to refund only the amounts for which there was documentary proof of payment to the BBVA accounts plus legal interest.  Legal costs were not imposed on the Bank.

BBVA appealed the First Instance Sentence.

We also filed an Appeal arguing that at the First Instance Trial the representative of BBVA when under interrogation stated that BBVA had issued a policy to the developer committing to issue guarantees.  Based on these facts we asked the Magistrates to reverse the First Instance Sentence and to condemn BBVA to refund the full off-plan deposit to our clients, as per the original claim in our Lawsuit, and not just the amounts for which there was proof of payment to the BBVA accounts.  We also requested the Court to impose costs on BBVA.

The Provincial Appeal Court dismissed the BBVA Appeal and upheld our challenges & arguments in full.

YOUR CASE AGAINST BBVA - PO xxxx/2012

Please find attached Sentence number xxx/2015 from the Provincial Appeal Court of Alicante Section 9 in Elche.

I am pleased to advise you that the Appeal filed by BBVA has been dismissed and the Appeal filed by us on your behalf has been upheld in full.

The final paragraph of the First Instance Sentence delivered on 22 April 2015 and notified on 28 April 2015 stated:



“That partially upholding the Lawsuit filed on behalf of xxxxxxx & xxxxxxxx against BANCO BILBAO VIZCAYA ARGENTARIA S.A. I must condemn the defendant to pay the plaintiff the amount of xx,xxx€ plus legal interest from the date of payment of the amounts to the Bank until the date of full payment.

The costs are not imposed on any party”


The final paragraph of the Provincial Appeal Court Sentence delivered on 16 November 2015 and notified on 26 November 2015 states:


“That dismissing the Appeal filed on behalf of BBVA and fully upholding the arguments posed by the legal representatives of the plaintiffs against the Sentence dated 22 April 2015 from the First Instance Court No. 5 of Orihuela, we revoke that Sentence and instead fully uphold the alternative claim in the Lawsuit, condemning BBVA to pay xx,xxx Euro to xxxxxxx xxxxxx & xx,xxx Euro to xxxxxxx xxxxxxx, plus legal interest on these amounts from the date of payment.  The costs incurred in the First Instance are now imposed on the defendant, as well as the costs for its Appeal.  No special statement regarding the costs of the challenges/arguments of the plaintiff”


So the Appeal filed by BBVA has been totally dismissed and the Appeal we filed on your behalf has been fully upheld.

BBVA is condemned to refund you the full amount claimed of xx,xxx Euro and not just xx,xxx Euro as per the First Instance Sentence. 

You only had proof of payment to the BBVA account for the lower amount stated in the First Instance Sentence.  However, in the Appeal we argued that at the First Instance Trial the bank representative when under interrogation admitted to the fact that BBVA had issued a Line of Guarantees (General Guarantee) to Promociones Eurohouse 2010 S.L.  The Appeal Court magistrates agreed with our arguments, revoked the First Instance Sentence and condemned BBVA to pay you the full amount as stated in our alternative claim in the Lawsuit including amounts for which you had no proof of payment to the BBVA accounts.

BBVA must also pay interest at the legal rate on the full amount from the date you paid to the developer.

The costs of the First Instance Procedure are now imposed on BBVA.

The costs of the BBVA Appeal, that was dismissed, are also imposed on BBVA.

Although they were upheld, there was no pronouncement of costs relating to our challenges/arguments in the Appeal, therefore each party will pay its own costs for this part of the procedure.

It is a very detailed Sentence quoting extensively from other similar cases & quoting much Case Law.

Interesting comments by the Magistrates are:

“The doctrine expounded in different resolutions outlined in our Sentence serve to dismiss the BBVA appeal.

With regards to the challenges/arguments made by the legal representatives on behalf of the plaintiffs to condemn BBVA to refund all amounts paid to the developer and not just those deposited in the accounts of BBVA with costs to be imposed on the defendant, these arguments must be upheld.

Firstly, it has been sufficiently demonstrated that the total amounts claimed were paid to the developer and this is also stated in the Sentence of the Commercial Court No. 3 of Alicante dated 18 June 2010 which cancelled the Purchase Contracts and condemned the developer to refund the total amounts paid on account of the off-plan purchase.

Secondly, the Engagement and concession of guarantees policy dated 11 July 2000 in its first clause states that the bank agrees to provide guarantees for the obligations of Promociones Eurohouse 2010 S.L.

This duty to guarantee the repayment of buyers off-plan deposits imposes on the guarantor in a compulsory and irrevocable way, as the Supreme Court stated in its judgement of 15 November 1999, so that the interpretation of the terms of the guarantee must always be performed for the full and complete protection of the buyer, given the protective nature of the Law.

Documentary evidence exists from the plaintiffs to confirm the full amount paid to the developer which was also the subject of a Court Sentence against the developer.  But it has also been proven that the amounts paid in compliance with the obligation of the Bank under article 1.2 of LEY 57/1968, do not correspond to the total amounts paid by the buyers.  This is because for part of the money paid by the buyers there is no documentary evidence of it having been deposited in the accounts of BBVA.

However, we understand that this is not an obstacle to excluding the liability of the Guarantor Bank.  On the one hand, because the terms of the policy issued by BBVA to Promociones Eurohouse outlined its commitment to grant the guarantees, and secondly because both LEY 57/1968 itself and the First Additional Provision of the Law on Construction & Planning, requires the repayment of amounts paid on account.

The upholding of the challenges and arguments by the plaintiffs involves the full estimation of the Lawsuit in the first of the alternative claims, consequently it is the  obligation of the defendant bank to return to the plaintiffs the full amount claimed.

We dismiss the Appeal filed by BBVA and impose the costs of that Appeal on BBVA.

Fully uphold the challenges and arguments raised by the plaintiff and thus entirely uphold the Lawsuit in its alternative claim with the defendant bank now sentenced to pay the costs of the First Instance”

Trafalgar Lighthouse, Caños de Meca, Barbate, Cádiz, Costa de la Luz, South western Spain 



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Legal tip 1347.SPAIN SUPREME COURT and MULTI CURRENCY MORTGAGES
26 November 2015

BISCUIT SIX: SPAIN SUPREME COURT and MULTI CURRENCY MORTGAGES

On a Court decision dated June 2015, Supreme Court expresses this type of mortgages are a  derivative financial instrument, as the quantification of the obligation of one party of the  contract  depends on the value of the “underlying asset”, which in these cases  is a foreign currency.

Because of this “ derivative” character, lenders are under stronger information duties, as it was already expressed by a European Court of Justice Decision dated 30th of April:

 "Loan agreement must set out transparently the practical operation of the mechanism of conversion of foreign currency, and the relationship between this mechanism and  other  provisions of the loan contract  relating to the delivery of the loan, so that consumer can assess, on the basis of precise and understandable criteria, the attached  economic consequences “

The statements highlight the importance of the great lack of information that the consumer suffered when they hired  a multicurrency mortgage, since in almost all cases,  did not know the extent of the implied  due to the volatility of the currency market.

This lack of enough information can be the origin of the null character of a mortgage loan.

A cottage of Houses of Montejaque, Sierra of Ronda, Natural Park of Grazalema, Málaga, South eastern Spain

 

    



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Legal tip 1346. Starting a business in SPAIN: self- employed or limited liability company?
24 November 2015

There are two options to choose when someone wants to start a business in Spain: 

1) Be a self-employed person
2) To create a commercial company: usually the most common form of company is the Limited Partnership. 
    
   Before you decide: 

    Definitions and main charactristics: 
 


  *  SELF-EMPLOYED: In Spain, a self-employed or sole proprietor is the natural person who carries on a regular basis,  a personal and direct economic activity with lucrative purposes, not subject to work contract and with the possibility of hiring workers.
     
It is assumed the status of self-employed if you have ownership of an establishment open to the public as owner, tenant, or lessee.
     
The self-employed has an unlimited liability, responding to business activities with all its present and future assets, so there is no separation between personal wealth and enterprise assets. 
    
The self-employed person is obliged to pay Social Security fees from the first day of the month that he began its activity and this obligation continues until the employee is active, even during situations of temporary disability, risk during pregnancy, risk during breastfeeding, periods of maternity or paternity leave. The compromise ends the last day of the month in which the employee ends his self-employment.   

* LIMITED LIABILITY COMPANY: COrganised to give its owners limited liability. The capital of the company consists of contributions from all partners and is divided into equal shares, cumulative and indivisible, which cannot be incorporated to negotiable shares and nor be named shares.

 Partners are not personally liable for debts, the liability is limited to capital. 
    
 

 So then…..SELF EMPLOYED OR LIMITED? THE ETERNAL QUESTION…
 

    
    There are different  economic, legal or images sake reasons in order to choose between one or other form of trading. You need to choose the legal form that best suits your needs. 
    
   Disclaimer: 

    In the case of a self-employed, the liability is unlimited,  as there is an absence of divission between  company and personal assets . While limited liability companies is limited to the capital. Thus, when a limited company goes bankrupt, only respond with his possessions, and never will with the properties of their owners. 

    Financial requirements: 

A limited requires a minimum capital of € 3006.00. In this case when it comes time to grant a loan, banks require the partners or directors to  provide personal guarantees. 

    Taxes: 

     Self-employed individual can obtain directly the benefits of their business and be taxed in the income tax. However, the limited is taxed through corporation tax. 

    Number of members:
     
    More than one person trading together usually makes a company, although  law envisages the possibility of one-person limited companies, consisting of a single person or entity. 

 

  Social Security and Taxes formalities: 

    To commence a business as a sole trader is much faster and easier than opting for a limited company.

 As a self-employed:  you just need to register within the Treasure Department and start paying taxes and social security fees.

 As a limited company:  you need to first establish the company- through the granting of a Notary deed and register it in the Commercial Registry- and also perform registration at Taxes and Labour departments, basically. 
    
    Some independent proffessional can pay fees to the Proffessional Mutual Benefit Society instead of fees to the Social Security.
    
    Bases for calculation of the Social Security fees are published by the Ministry of Finance each year. Therefore, the worker must pay a monthly fee, which varies according to the chosen base. The larger the base, the higher the fee. The type of base and fee wil also have an impact on the volume of coverage that Social Security provides for sickness, disablement and retirement. 

  

  CONCLUSIONS: 
 There are not automatic criteria for deciding between self-employed and limited company.

 The most  advantageous option depends on the specific circumnstances of each one.
    
 

    

  • WHAT COSTALUZ CAN DO FOR YOU?

 

We can guide you through the whole process of setting, organising, hiring employees, directing, accounting, tax paying and closing/ liquidation of a business in Spain.

 

Lighthouse of Formentor, Mallorca, East of Spain

 



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Legal tip 1345. NEW! WON CASE in FIRST INSTANCE COURT AGAINST HCC EUROPE FOR GRUPO LABARO S.L. BUYER AT ‘COSTA GALERA COUNTRY CLUB’
19 November 2015

WON CASE in FIRST INSTANCE COURT AGAINST HCC EUROPE FOR GRUPO LABARO S.L. BUYER AT ‘COSTA GALERA COUNTRY CLUB’

We were pleased to inform our client today that we had won their case against the insurer HCC EUROPE in the First Instance Court.  The clients did not receive individual Guarantees from the developer, Grupo Labaro S.L. or from the Bank to which their off-plan deposit was paid or from the General Guarantor of the development, HCC EUROPE.

Re: YOUR CASE AGAINST HOUSTON CASUALTY COMPANY EUROPE, SEGUROS Y REASEGUROS S.L. (HCC)
PO xxx/2013

Please find attached the Sentence Number xxx/2015 from the First Instance Court No.1 in Estepona.

Your case against HCC has been won.

The final paragraph of the First Instance Sentence delivered on 16 November 2015 and notified on 16 November 2015 states:


“I uphold the Lawsuit filed on behalf of xxxxxx xxxxxx against HOUSTON CASUALTY COMPANY EUROPE, SEGUROS Y REASEGUROS S.A. and state that it is responsible in solidarity with Grupo Labaro S.A. and condemn HCC EUROPE to pay to xxxxx xxxxxx, jointly, the same amount established in the sentence of 16 September 2008 from the First Instance Court No. 4 in Estepona in ordinary trial no. xxx/07, the amount of xxx,xxx euros, plus legal interest on that amount, calculated at 6%, from the judicial questioning in procedure no. xxx/07 until complete payment; plus annual interest equal to the legal interest on money in force at the time accrued, increased by 50%, and, after two years from the occurrence of the claim, the annual interest may not be less than 20%.  With imposition of costs on the defendant”


So your Lawsuit has been upheld and HCC is now jointly liable with the developer Grupo Labaro S.A., to refund the amount of xxx,xxx€ plus statutory interest which will be calculated in due course.

Costs of the First Instance Proceedings are imposed on HCC.

Interesting points from the Sentence are:


HCC claimed that actions of this type against an insurer were subject to a time limit of 2 years as per Article 23 of the Law of Insurance Contracts.  However the Judge stated that this action with an insurance linked to LEY 57/1968 is covered by the deadlines established in Article 1964 of the Civil Code, which is 15 years, and that this limitation period has not elapsed in this case.

HCC also argued that as the developer had already been sued and found liable in a previous action then it was not possible to claim the same amount from HCC.  The Judge stated that although you had won the previous case against the developer, you had not received any payment from the developer, Grupo Labaro S.A.; therefore there is no unjust enrichment.  Furthermore, the Judge confirmed that you had the right to take legal action against the developer and insurer individually in separate actions (which you did) or simultaneously in one action.

All the arguments put forward by HCC were dismissed by the Judge.



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Legal tip 1344. Do you want to sell/buy in a voluntary auction in Spain? NOW IT IS POSSIBLE
17 November 2015

Do you want to sell/buy in a voluntary auction in Spain? NOW IT IS POSSIBLE

 

From October 15th, 2015 on, private auctions are possible in Spain before a Notary or a Judge

 

  • Let me explain a bit…                                                                        

 

1) Auctions by the Court Clerks

These need to be done at the request of the interested party and  never within an enforcement procedure.

Jurisdiction will be of the municipality where the property is located

Application: Applicant will express to Court Clerk in written:

 (1) Identification and status of the property

 (2)  Ownership title

 (3)  Special conditions under which the auction is to be held and

(4)  A place where valuation will be collected.

Procedure:  Once provenance of the auction is agreed, this will be done electronically in the Auction Portal of the State Agency for the Official National Gazette, under the responsibility of the court clerk.

The award decree will contain the description of the property, identification of the participants, expressing the terms of the award and other necessary requirements, if any, for registration.  A copy of that decision, which will be handed over to the auction winner, will be sufficient for the practice of registration in the Land Registry.

2) Auctions by Notary

A notary can perform auctions pursuant to a judicial or administrative decision, contractual or testamentary clause,  enforcement of  arbitration award , mediation agreement , by special agreement in a public instrument, or voluntary ones.

Procedure

It will be made electronically at the  Auction Portal of the  State Agency  for Official National Gazette.

The auction will be convened by the notary, at the request of the person standing to seek the sale of the property after examining the application, after the Notary  attests  to the identity and legal capacity of its promoter and legitimacy to urge it.

The announcement of the auction call  will be published in the “ National Official Gazette” ( BOE), in addition to locations designated by the promoter.

The announcement of the auction must be made  at least 24 hours previous to the opening of deadlines for  submission of bids.

Property Valuations: Will be the contractual value or value provided by the applicant. If these are not brought to the Notary by the interested party, this will ask an expert to determine it. This valuation will be the minimum bid value.

Holding the auction

 The auction will take place at the Auction Portal of the State Agency for the  Official National Gazette. All exchanges of information to be made between notaries and Auction Portal will be made telematically.

Once the auction is  closed, the Auction Portal will forward all the necessary  information  to the Notary.

Notary will attest all  aspects of legal significance and will issue a deed to Land Registry entry. 

Website for auctions: https://subastas.administraciondejusticia.gob.es/subastas/home.do

 

  • WHAT COSTALUZ CAN DO FOR YOU?

 

 CostaLuz Lawyers´ Management office can help you to go through the auction process at really  affordable management fees!

 

A nice street in Castellar de la Frontera, Cádiz, South of Spain

 

 



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Legal tip 1343. Forget all worries when renting in Spain II
16 November 2015

Along several posts, we are  walking through Spain Rental Law in simple words….

Are you walking with us?

We are explaining applicable rules for the renting of urban properties intended for housing or uses other than housing.

 ( See chapter one, or first seven questions here)

8. Are Housing Rental Rules mandatory?

Yes, they are, for the protection of the need of permanent home of this type of tenants. This implies that any stipulations that modify in detriment of the tenant or subtenant the rules of the Urban Rental Act´s Title on Rental of Housing are void, and will be considered as not existent.

9. What is the tenant is absent but family remains?

 

In that case, protection of housing rental applies. Meaning  family:  non-separated spouse and dependent children.

 

10. Should I register these rights anywhere?

 

Yes, as a tenant and for your rights to have full effect before any third party, it is necessary that you record these rights at the Land Registry.

 

 

11. What if I want to transfer or partially sublet my rights as a housing tenant?

 

In both cases ( transferring or  partial subletting), you need the written consent of the landlord.

 

Rules and timeframes applying to the main contract will apply to derived  one unless they are not used as housing. In this case, parties agreement will apply.

 

Tenants cannot make money through this so rent will be as maximum equal to theirs.

 

 

12. What are legal timeframes for this Housing Rentals?

There is no established minimum timeframe. Parties decide.

 

If these were less than three years, when the expiration deadline of the contract arrives, this will be obligatorily extended for annual periods until the lease reaches a minimum duration of three years. Exception to this rule: if the tenant expresses to the landlord, with a minimum of thirty days before the date of termination of the contract or any of the extensions, his will of not to renew it.

 

The term will start the date of the contract or when the property is available to the tenant if it were later. It will be the tenant's duty to prove the date of the availability.

 

If Renting duration has not been stipulated or it is indefinite, deadline will be considered as of  one year, without prejudice to the right of annual extension for the tenant, in the terms of the previous section.

 

There will be no mandatory extension of the contract if, after the first year of duration, the landlord notifies the tenant he needs the rented housing to use it for permanent housing for himself or his relatives in the first degree of consanguinity or because of adoption or for his spouse in the event of a judgment of separation, divorce or annulment.

 

This notice must be given to the tenant at least two months before the date on which the housing is going to be needed and the tenant will have to deliver the rented property within that period if the parties do not reach a different agreement.

 

Housed needs to be occupied by the owner and/or relatives within 3 months after  termination of the contract. If this does not happen, the tenant will be allowed to choose, within thirty days, between (1)  Being restored to the use and enjoyment of the rented property for a new  period of until three years with same contract conditions as he had before  and  compensation of, or (2) Being  compensated by an amount equivalent to one month for each year remaining until completing  three, except that the occupation had not taken place due to force majeure.

To be continued  soon...

 

WHAT COSTALUZ CAN DO FOR YOU?

 

We have two special packages for (1) Landlords and (2) housing tenants at CLL.

 

Ask us about them!

 

 

Sorvilán, Granada, South east of Spain

 



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Legal tip 1342. STRUGGLING with Mortgage debt in Spain?
14 November 2015

TEAPOT:  STRUGGLING WITH MORTGAGE DEBT IN SPAIN?

How to deal with the Bank for a win-win 100% mortgage  debt settlement

The Spanish Government protected mortgage debtors in a very nice and radical way back in 2013 as the existence of a clear unbalance between Banks and debtors was evident to them. Good policies!

So, making use of these rules, you can negotiate a settlement with the Bank for the benefit of both you and them:   you get out of an unbearable mortgage loan and they get ownership rights on a property with no need of judicial action and costs.

 

What numbers do I need to make for knowing if I am eligible?                

 

Auction value of a mortgaged property is a high value compounded by: Principal amount + Interests (ordinary and delay interests) + Legal costs

So if a Bank lent to you, say 150k euros , the auction value of the property may well be in the region of 250k.

Law 1/2013, of May 14th for protecting mortgage debtors established that repossession of a property by a Bank if auction did not have qualifying bids, must be for at least 70% of the auction value of the property (if the house was a permanent home of debtor) or for 50% of said value ( if house is not a permanent home)

In many cases outstanding debts equal that 50% so, a settlement can be achieved.

 

  • WHAT COSTALUZ CAN DO FOR YOU?:

 

If you or any of your friends is struggling with mortgage payments in Spain, and want a clean agreement with the Bank to clear the debt, we will be very pleased to appraise  possibilities for this settlement out of Law 1/2013

 

Hayedo (beech) of Tejera Negra, Guadalajara, Castille-La Mancha, Centre of Spain

 

 

 

 

 

 

 

 



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Legal tip 1341.NEW! WON CASE in FIRST INSTANCE COURT AGAINST CAIXABANK FOR PROMOCIONES EUROHOUSE 2010 S.L. BUYERS AT ‘RESIDENCIAL FORTUNA GOLF RESORT’
12 November 2015

WON CASE in FIRST INSTANCE COURT AGAINST CAIXABANK FOR PROMOCIONES EUROHOUSE 2010 S.L. BUYERS AT ‘RESIDENCIAL FORTUNA GOLF RESORT’

We were pleased to inform our clients today that we had won their case against Caixabank in the First Instance Court.  The clients did not receive an individual Guarantee from the developer, Promociones Eurohouse 2010 S.L. or from the Bank to which their off-plan deposit was paid, CAIXABANK (formerly LA CAIXA).


Re: YOUR CASE AGAINST CAIXABANK S.A.

 

Please find attached Sentence number xxx/2015 from the First Instance Court No.4 in Orihuela.

Your case against CAIXABANK has been partially won.

The final paragraphs of the First Instance Sentence delivered on 23 October 2015 and notified on 28 October 2015 state:



“That partially upholding the Lawsuit filed on behalf of Mr xxxxxx xxxxxx & Mrs xxxxxx xxxxxxx against the entity CAIXABANK S.A. I must condemn and order the defendant to pay the plaintiff the amount of xx,xxx€ plus legal interest from the date of payment of the amounts to current account of the company until the date of full payment.

There is no express imposition of costs”



So CAIXABANK is liable to refund the amount of xx,xxx€ plus legal interest from the date the payment was made to the Promociones Eurohouse account at CAIXABANK until the date of full payment to the Court. 

The Sentence explains the liability of CAIXABANK according to its obligations under LEY 57/1968 for the off-plan deposits paid to accounts opened by the developer, PROMOCIONES EUROHOUSE 2010 S.L. in CAIXABANK.

Particular points of interest stated by the Judge in the Sentence are:


It must not be forgotten that when interpreting and applying LEY 57/1968, of July 27, regarding the receiving of advance payments during the construction and sale of housing, one should take into account the objective pursued by the Law to protect consumers against property fraud.  Specifically, in the preamble of the Law it states that the justified alarm in public opinion has been due to the repeated abuses, which, on one hand, constitute serious impairment in social interaction, and on the other are evident crimes, besides causing irreparable damage to confidence and good faith.  Therefore the Law establishes general preventive rules ensuring both the real and effective protection of the amounts paid by buyers of off-plan homes and for its return should the building not take effect.

Such is the consumer protective purpose of LEY 57/1968; it has led to Courts to clarify that the interpretation of the terms of the law should not be formalistic or to the detriment of the consumer.

 

As to the character of the amounts paid to the Eurohouse account opened at Caixabank, the branch manager of Orihuela, Mr. Moreno Lopez, who appeared as a witness at the trial, maintained that he did not know that the quantities accepted into the Eurohouse accounts by the Bank were payments on account the price of housing promoted by his client, Promociones Eurohouse as Caixabank, did not fund the housing project in question and because it was a normal current account, and not a special account.  But the fact remains that he knew perfectly well the business of his client, Eurohouse (a real estate developer who built 5,000 or 6,000 homes, which had been granted funding by Caixabank sometimes, but not for this particular promotion).  He argued further that his office did not open any Special Account because in this case it was not requested by the developer.  It is evident, therefore, that we have a special account, due to the origin and destination of the funds, though just not given the title of Special by the parties.

Therefore, we should not forget that although insurance companies or financial institutions are not parties to contracts of sale, the truth is that they are not alien to their content or to the performance of the obligations arising thereof.  They must ensure that they themselves meet the guarantees established by LEY 57/1968.

Precisely for this reason, the Ministerial Order of 29 November 1968 was issued.  It gives possibility for the bank or insurance company to control the purchase contracts of the promotion in question, to enable it to monitor compliance with the obligations of LEY 57/1968.

There must be a Guarantee or Insurance Policy for all such quantities that buyers entered into the special account of the defendant for the purpose of buying off-plan housing.

 

The Bank cannot avoid this part of its responsibility on the grounds that the developer did not ask for the issuance of a guarantee or on the basis that they did not require the developer to furnish guarantees or insurance for all amounts or by relying on the assumption that it was an ordinary current account, where it has been proven otherwise.

The fact that neither the developer nor the Bank has been concerned with the legal obligation to issue individual guarantees can in no case harm the consumer.

 

The bank has a legal duty to ensure that the amounts paid to its branches were guaranteed by insurance policy or bank guarantee and this failure has generated a liability according to LEY 57/1968.

It should be noted that Article 1 of Law 57/1968 in its desire to protect purchasers of off-plan housing, also involves financial institutions in which the accounts are opened, establishing an obligation to them, which is none other than to demand "under its responsibility, the Guarantees referred to in the previous condition”. That is, to require, under its responsibility, that the developer has guaranteed the repayment of the amounts paid in advance (I understand that is the amounts paid to the accounts opened by the developer in this entity). This does not mean that it is the receiving bank that must issue the Guarantees, as the guarantor may be another entity.  But the term under its responsibility, is interpreted in the sense of making it responsible for damages arising to buyers to whom the security has not been provided, since by this failure, the consumers could not obtain reimbursement of the amounts paid in advance in the event of breach of contract by the developer.

In other words, the bank should not allow the opening of special accounts and allowing deposits from buyers in such accounts, without first making sure that the promoter has assumed a legal obligation to ensure the return of the amounts paid on account, and if it fails in this legal duty, the Bank is liable for the damages that such a breach creates to the buyers who cannot obtain the repayment of their advance payments.

Regarding the payment of default interest shall apply Article 3 of Law 57/1968 which states that "Upon the expiry of the initiation of the works or delivery of housing, the assignee may either terminate the contract with repayment of the amounts paid on account, increased by six percent annual interest, or grant the transferor an extension, which shall be recorded in an endorsement to the contract awarded by specifying the new period for the date of completion of construction and delivery of housing".

However, that article was amended by the Law of Construction Planning of 1999, to which the first additional provision refers to the law 57/1968, albeit with certain modifications among which is:

c) the guaranteed return must include quantities delivered plus legal interest on those quantities until such time as the repayment is made.

Therefore it is appropriate to order the defendant to pay the legal interest on the amounts claimed and such interest shall be computed from date the buyers paid to the account of the developer”

Lagunas de Gallocanta, Zaragoza, Aragon, North east of Spain

 



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Legal tip 1340. NEW! WON CASE in FIRST INSTANCE COURT AGAINST SGR & BBVA FOR HERRADA DEL TOLLO S.L. BUYER AT ‘RESIDENCIAL SANTA ANA DEL MONTE’
12 November 2015

WON CASE in FIRST INSTANCE COURT AGAINST SGR & BBVA FOR HERRADA DEL TOLLO S.L. BUYER AT ‘RESIDENCIAL SANTA ANA DEL MONTE’

We were pleased to inform our clients today that we had won their case against SGR & BBVA in the First Instance Court.  The clients did not receive individual Guarantees from the developer, Herrada del Tollo S.L. or from the Bank to which their off-plan deposit was paid, BBVA or from the General Guarantor of the development, SGR.


Re: YOUR CASE AGAINST SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA (SGR) & BANCO BILBAO VIZCAYA ARGENTARIA S.A. (BBVA)
PO xxxx/2014

Please find attached Sentence number xxx/2015 from the First Instance Court No.2 in Orihuela.

Your case against SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA & BANCO BILBAO VIZCAYA ARGENTARIA S.A. has been won.

The final paragraph of the First Instance Sentence delivered on 26 October 2015 and notified on 26 October 2015 states:



“Fully estimating the Lawsuit filed on behalf of xxxxx xxxxx, against SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA & BANCO BILBAO VIZCAYA ARGENTARIA S.A. I condemn the defendants jointly & severally to pay the plaintiff the amount of xxx,xxx Euro plus legal interest from the date of delivery or deposits in the current accounts of BBVA until the full repayment and legal costs”


So SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA & BANCO BILBAO VIZCAYA ARGENTARIA S.A. are jointly & severally liable to refund the total amount claimed in the group Lawsuit which is xxx,xxx€ plus legal interest from the date each amount was paid to the developer’s bank account.


Particular points of interest stated by the Judge in the Sentence are:

When interpreting and applying LEY 57/1968 of 27 July on receiving buyers amounts in advance for the purchase of homes under construction we should not forget the aim pursued by the same to protect consumers against real estate fraud.  Specifically, in the preamble of the Act it states that  ‘The justified alarm in public opinion has been the repeated commission of abuses, which, on one hand, constitute serious impairment in social interaction, and other obvious crimes besides causing irreparable damage to confidence and good faith which therefore requires to establish general preventive rules ensuring both the real and effective protection of the anticipated funds for purchasers of homes and for developers to return the funds on the assumption that building does not take effect’

Thus, such guiding principles of consumer protection – the right to decent housing and formalistic interpretations to the detriment of the consumer – we must consider in resolving the dispute subject to these proceedings.

All the rights and guarantees granted to the purchaser by Article 7 of LEY 57/1968 are of an inalienable character.

In this case SGR entered into an agreement with the developer and issued a consolidation policy to ensure repayment of the amounts of principal and interest paid by buyers.  Through this policy they wanted to meet the obligations imposed by LEY 57/1968.

Furthermore, BBVA also signed a general guarantee with the developer for the amounts paid on account by buyers.

The main defense argument put forward by the defendants is that the plaintiffs have no contractual relationship with them as individual guarantees have not been issued due to the fact that the amount covered in the general guarantees was exhausted by the developer.

Being a group insurance linked to a promotion the financial institution or insurance company is responsible for such consolidation.  They must ensure compliance with all legal obligations relating consumer protection.

The fact that despite the existence of General Guarantees, neither the developer, bank or insurer have been concerned with the legal obligation to issue the individual guarantees cannot harm the consumer.

This interpretive line of jurisprudence has recently been confirmed by the Provincial Appeal Court of Alicante, but fundamentally, by a judgment of the Supreme Court in September 2015 in relation to an identical case involving other buyers from Herrada del Tollo.

The absence of individual guarantees does not preclude the obligation to repay the amounts paid.  It is irrelevant to the case at hand that the guarantee line is exhausted.

 

Our jurisprudence has stated that the protection offered by LEY 57/1968 extends to all amounts paid irrespective of whether they are entered in the account detailed in the general guarantees.  The obligation to keep the funds in a special account cannot be imposed on the buyer. The lack of income in the special account is down to internal relations between the insurer and seller and cannot harm the buyer.

As for the claim by the defendants that the buyers had signed an agreement with the bankruptcy administrators of the developer, this does not extinguish the guarantee or liability of the insurers.

In our case the housing development is not even started so the frustration of the purpose of the contract is clear.

For all the above reasons we must uphold the claim made by the plaintiffs.

The defendants are also condemned to pay legal interest on the amounts claimed and such interest shall be computed from the date the amounts were paid to the account of the developer”

Orihuela, Alicante, East of Spain



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Legal tip 1339. NEW! WON CASE in FIRST INSTANCE COURT AGAINST PASTOR SELECTED VILLAS INTERNATIONAL WITH JOINT LIABILITY OF CAIXABANK
11 November 2015

WON CASE in FIRST INSTANCE COURT AGAINST PASTOR SELECTED VILLAS INTERNATIONAL WITH JOINT LIABILITY OF CAIXABANK

We were pleased to inform our clients today that we had won their case against Pastor Selected Villas International & Caixabank in the First Instance Court.  The clients did not receive an individual Guarantee from the developer, Pastor Selected Villas International or from the Bank to which their off-plan deposit was paid, CAIXABANK (formerly LA CAIXA).


Re: YOUR CASE AGAINST PASTOR SELECTED VILLAS INTERNATIONAL S.L. & CAIXABANK S.A.
PO: xxx/2013

Please find attached the Sentence from the First Instance Court No.4 in Orihuela.

Your case against PASTOR SELECTED VILLAS INTERNATIONAL S.L. & CAIXABANK S.A. has been won.

The final paragraphs of the First Instance Sentence delivered on 27 October 2015 and notified on 2 November 2015 state:



“That estimating the Lawsuit filed on behalf of xxxxxx xxxxxx & xxxxxx xxxxxx against the entity PASTOR SELECTED VILLAS INTERNATIONAL S.L. & against the entity CAIXABANK S.A. with the following pronouncements:

1. Must declare the cancellation of the Purchase Contract signed between the parties on 5 May 2006, document 1 of the Lawsuit, I must condemn the entity PASTOR SELECTED VILLAS INTERNATIONAL S.L. to refund the sum of xxx,xxx euros.

2. I must declare the legal responsibility of the entity CAIXABANK S.A. as provided in Article 1.2 of LEY 57/1968, therefore, I condemn and order the defendant Bank to pay the sum of xxx,xxx euros.

3. The amounts indicated accrue legal interest from the date of delivery or, where applicable, from the date of the deposits in the current account of CAIXABANK S.A.

4.  The costs of the Lawsuit directed against PASTOR SELECTED VILLAS INTERNATIONAL S.L. are imposed on that entity.  Without express imposition of legal costs arising from the Lawsuit directed against CAIXABANK S.A”




So your purchase contract is cancelled and PASTOR SELECTED VILLAS INTERNATIONAL S.L. is sentenced to refund the amount of xxx,xxx euros plus legal interest from the date you paid the amounts until the date of full payment to the Court.

CAIXABANK S.A. is jointly & severally liable to refund the amount of xxx,xxx euros (this being the actual amount proved to be paid into the Caixabank account) plus legal interest from the date the amounts were paid into the Caixabank account until the date of full payment to the Court. 

Legal costs for the Lawsuit against Pastor Selected Villas International S.L. are imposed on that entity.

There was no imposition of costs relating to the Lawsuit against Caixabank S.A. Therefore for this part of the procedure each party will bear its own legal costs and any common costs will be halved.

The Sentence explains the liability of CAIXABANK according to its obligations under LEY 57/1968 for the off-plan deposits paid to account opened by the developer, PASTOR SELECTED VILLAS INTERNATIONAL S.L. in CAIXABANK.


Particular points of interest stated by the Judge in the Sentence are:


Such guiding principals of consumer protection offered by LEY 57/1968 and reaffirmed by the Supreme Court states that the interpretation of the terms of the law should not be formalistic or to the detriment of the consumer.

The respondent company alleges that they have no contractual relationship with the claimants as they have not issued an individual guarantee to them.  Against this, it should be noted that we are not facing an endorsement or common strengthening of those provided for in Article 1822 of the Civil Code, but to an endorsement of a special nature regulated by the Law, LEY 57/1968 that favors an interpretation in favor of the consumer. Therefore, we should not forget that although insurance companies or financial institutions are not parties to contracts of sale, the truth is that they are not alien to their content or the performance of the obligations arising thereof, therefore they must ensure that they themselves meet the guarantees and obligations established by LEY 57/1968.

In this case we have off-plan amounts paid by the claimants and admitted to the developer’s account stipulated in the contract at Caixabank.  The witness from the Bank said it was not a special account, but an ordinary current account and due to the ordinary nature of the account the bank did not carry out any checks on the movements or amounts credited to the account. Moreover, they argue that they have no obligation to maintain such control.

The truth is that the bank opened an account for the developer in which the amounts paid by the buyers (here plaintiffs) to acquire their homes was paid and the witness has not convincingly explained to the Court what became of the amounts paid into that account.

But the truth is that the promoter opened an account to receive the amounts advanced by the purchasers and there then emerged for the bank a legal duty to ensure that those amounts were guaranteed by a certificate of insurance or a bank guarantee.  It is due to the bank having breached that duty that its legal liability is created.

However, in this case the responsibility of the Bank can only be extended to the amounts that were actually entered into the developers account and not the rest of amounts that were not paid into the account of this entity.

It should be noted that Article 1 of Law 57/1968 in its desire to protect purchasers of off-plan housing, also involves financial institutions in which the accounts are opened, establishing an obligation to them, which is none other than to demand "under its responsibility, the Guarantees referred to in the previous condition”. That is, to require, under its responsibility, that the developer has guaranteed the repayment of the amounts paid in advance (I understand that is the amounts paid to the accounts opened by the developer in this entity). This does not mean that it is the receiving bank that must issue the Guarantees, as the guarantor may be another entity.  But the term under its responsibility, is interpreted in the sense of making it responsible for damages arising to buyers to whom the security has not been provided, since by this failure, the consumers could not obtain reimbursement of the amounts paid in advance in the event of breach of contract by the developer.

In other words, the bank should not allow the opening of special accounts and allowing deposits from buyers in such accounts, without first making sure that the promoter has assumed a legal obligation to ensure the return of the amounts paid on account, and if it fails in this legal duty, the Bank is liable for the damages that such a breach creates to the buyers who cannot obtain the repayment of their advance payments.

In this case it is clear that the bank was well aware of the business in which the developer was engaged and that the income to the account by the plaintiffs was for the purchase of an off-plan property, so we are declaring that we are facing special accounts, not by the title given by both parties, but due to the origin and the destination of the funds in the account.  The fact that the account was titled as ordinary and not Special cannot be attributed to the plaintiffs.  Therefore, the Bank is not unrelated to the content of the purchase contracts and, therefore, in compliance with the obligations arising thereof, it must ensure that these are met with the guarantees established by LEY 57/1968.

Finally in relation to the alleged time limitation to bring the action, I understand that the time limit under Article 1968 of the Civil Code does not apply as it is an assumption of liability derived from Article. 1.2 of LEY 57/1968, which results in the application of the general limitation period of Article 1964 of the Civil Code.

Regarding the payment of default interest it is appropriate to order the defendants to pay the legal interest on the amounts claimed and such interest shall be computed from date the buyers paid to the account of the developer”

The river Segura, acrossing Orihuela, Alicante, East of Spain



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