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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 1051. Deposit contracts by Banks
21 October 2013 @ 15:09

It seems they are trying to avoid the rule of the 1454 of the Civil Code, as many developers made during the Real Estate Boom. 

1454 of the Civil Code establishes that if you, buyer, breaches the agreements made in the deposit contract ( that are mainly on completion of the purchase by Notary deed at an specific time) you lose your deposit AND if the seller breaches it, it has to return twice that amount.

Banks want buyers to have the penalty for breaching but want to avoid equivalent penalty for themselves.

Only argument by the agent is that... " it is what Banks have included in their standard contracts"

I have just contacted Consumers National Authorities  on this. Let´s see what their opinion is.

This, in addittion to asking the buyer to renounce to hidden deffects liability of the seller.

Legal advice

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4 Comments


Keith110 said:
21 October 2013 @ 15:30

Typical actions of banks I am afraid.............they think they are above the Law


ads said:
21 October 2013 @ 23:31

I'm afraid I don't understand this Maria. Would it be possible for you to expand on this by providing examples please?....


Keith110 said:
22 October 2013 @ 09:56

Anne,

It is about signing a deposit contract to buy a house in Spain. As you know Banks are now some of the biggest property owners and Estate Agents in Spain - with many repossessions etc.

So many buyers are now buying these properties from Banks - the Bank being the 'seller'.

As María explains, Article 1454 of the Civil Code states that after a deposit contract is signed, if the buyer then fails to complete the purchase or breaches the contract then the buyer loses the deposit paid. But if the Seller - in this case the Bank - breaches the contract, according to Article 1454 the seller must return TWICE the amount of the deposit to the buyer.

But some Banks in their deposit contracts are including a clause for breach of contract by the buyer, but do not include a clause regarding the penalty for the seller (i.e themselves). They are attempting to avoid this penalty for themselves.

When Estate Agents are questioned about this the only thing they say to buyers is 'That is what the Bank as the Seller has included in its standard Deposit Contract'.

So again..........one rule for Banks and one rule for the Consumer. Banks attempting to avoid their obligations, responsibilities and liabilities.

Is this a lack of due diligence, negligence or a deliberate attempt to harm the consumer..........?

LEY 57/1968.....Clausula Suelo.........Preference Shares......Deposit Contracts.............

The list goes on.

So María advises when buying a property from the Bank, never sign the Deposit Contract until it has been checked by an Independent Lawyer.




ads said:
22 October 2013 @ 23:48

Many thanks for the clarification Keith.

I can understand the need for an independent lawyer but what appears to be consistently happening now is a growing failure within the system of justice in Spain to recognise and take action against malpractice from all quarters (whether this be legal, developer, or bank malpractice). Legal negligence, lack of due diligence, deliberate intent, whatever, all have the same "harmful" impact on the innocent consumer, and all demonstrate a complete disregard for consumer protection.

It's time that this continuing "harm" is recognised by the judiciary and Supreme Court in Spain and this can only be achieved by exposing it at every opportunity.

This is why Maria, I was hoping that lawyers would collectively address this problem by consistently reporting and placing on record all "events of bad faith" to the CGPJ or whoever.


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