All EOS blogs All Spain blogs  Start your own blog Start your own blog 

El blog de Maria

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

Legal tip 1406.LEY 57/1968 Won Case in First Instance Court against CAJA RURAL CENTRAL for a group of our clients who purchased off-plan properties from the developer Promociones Eurohouse at Fortuna Hills Golf Resort & Residencial Los Balcones del Valle
11 November 2016 @ 13:12

LEY 57/1968 Won Case in First Instance Court against CAJA RURAL CENTRAL for a group of our clients who purchased off-plan properties from the developer Promociones Eurohouse at Fortuna Hills Golf Resort & Residencial Los Balcones del Valle

We were pleased to inform our clients recently that we had won their case against Caja Rural Central 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, CAJA RURAL CENTRAL.

Re: YOUR CASE AGAINST CAJA RURAL CENTRAL
PO xxxx/2012

Please find attached Sentence No. xxx/2016 from the First Instance Court No.4 in Orihuela.

Your case against CAJA RURAL CENTRAL has been won.

The final paragraph of the First Instance Sentence delivered on 1 September 2016 and notified on 6 September 2016 states:


“Upholding the Lawsuit filed by xxxxxx against the entity CAJA RURAL CENTRAL I condemn and order the defendant to pay to the plaintiffs the total amount of xx,xxx€ plus interest at the legal rate from the date the funds were deposited in the account opened by the developer in Caja Rural Central until full repayment.

Without the express imposition of costs of the proceedings”



So CAJA RURAL CENTRAL is sentenced to refund the total amount of xx,xxx€ plus interest at the legal rate from the date the funds were paid into the developer’s account opened at Caja Rural Central.

The Judge did not impose costs on the bank; therefore each party will pay its own costs.

Interesting statements from the Judge in the Sentence were:


“On 22 November 2012 the plaintiffs filed a Lawsuit against Caja Rural Central, requesting the conviction of the bank according to its responsibility under Article 1.2 of LEY 57/1968.  The plaintiff requested the refund of the total amount paid to the developer under the Purchase Contract plus interest & costs, alternatively, the amount actually credited to the Caja Rural Central account opened by the developer.  The total off-plan deposit was 141,925.34€ and the amount proved to be paid to the Caja Rural account was 68,940.30€.

The plaintiffs had purchased properties from the developer Promociones Eurohouse 2010 SL in the Fortuna Hills Golf Resort and in Residencial Los Balcones del Valle.  The properties were not constructed and the Purchase Contracts were cancelled in the insolvency procedure of the developer.

Caja Rural Central opposed the Lawsuit and said that it had not guaranteed the funds and that the funds were paid to an ordinary current account opened by the developer, over which the bank had no control or monitoring.  The bank denies all liability because it states that it has no contractual link with the buyers. 

The Preliminary Hearings were held on 6 March 2014 & 11 June 2015 & the Trial was held on 3 May 2016.

Documentary evidence was provided to prove that 68,940.30€ was entered into the Caja Rural Central account opened by the developer.

The witness on behalf of Caja Rural, who was Director of the branch in which the account was held from 2005 to 2007, gave evidence at the Trial.  He stated that the account was an ordinary account opened by the developer and that he did not know that the amounts paid into that account were for the purchase of off-plan housing because Caja Rural did not fund the developer.  He said that it was not possible to control and monitor income in this type of account and that he was unaware of the legal obligations imposed on banks.

However the fact remains that bank knew this account was opened by a company dedicated to the construction and promotion of off-plan properties.  One just has to look at the historical movements of the account to see that it was funded largely by amounts paid by buyers to purchase their off-plan homes

It is evident that the account is to be considered as a Special Account according to the Law. 

Therefore, having opened an account for an off-plan property developer, the bank has a legal duty to ensure these funds were guaranteed by an Insurance Certificate or Bank Guarantee.  Having failed in its legal duty, the bank then has a legal liability.

The bank should not allow the opening of accounts or the placing of deposits in those accounts, without first ensuring that the developer has assumed a legal obligation to guarantee the repayment of the funds. 

It should be noted that Article 1 of LEY 57/1968 in its quest to protect purchasers of off-plan homes also involves the financial institutions in which the developer opens accounts for the receipt of buyer’s funds.  It establishes an obligation on the bank, ‘under its responsibility’, to ensure that the developer has guaranteed the buyer’s funds according to the Law.  This does not mean that the financial institution receiving the money has to issue the Guarantee, because it can be a Guarantee from another entity, but the entity receiving the money must ensure the Guarantee is issued.  If it fails in this legal obligation then it must be liable to the buyers for the money it received.

Therefore, the bank is responsible for all amounts proved to have been paid by the buyers to the developer’s account opened at Caja Rural Central.

As for costs, the plaintiff requested costs to be imposed on the bank.  Even though the Lawsuit has been upheld substantially in its alternative claim for the amount deposited in the developer’s account at the defendant bank, the costs are not imposed on the bank in this case as there is more or less uniform criteria in the Provincial Appeal Court of Alicante, to understand that at the time the Lawsuit was filed in November 2012 there were serious doubts in Law regarding the liability of the Bank according to Article 1.2 of LEY 57/1968”



CAJA RURAL CENTRAL had 20 working days from the date of notification of the Sentence, which was 6 September 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Alicante.

We were notified on 28 September 2016 that the Bank has filed an Appeal to the Provincial Appeal Court of Alicante.



Like 1




0 Comments


Only registered users can comment on this blog post. Please Sign In or Register now.




 

This site uses cookies. By continuing to browse you are agreeing to our use of cookies. More information here. x