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El blog de Maria

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

Legal tip 1415. Our Top Five Cases Against Off-Plan Property Developer’s Banks
03 December 2016 @ 18:11


We have now won more than 220 cases against Spanish Off-Plan Property Developer’s Banks and have sent millions of euros back to our clients, making them happy and achieving good justice in Spain.

Victims were those whose off plan purchases failed in Spain after the financial and real estate credit crunch.

Let me tell you something you may or may not know: at the beginning of our fight in 2009 we were called a bunch of fools fighting recklessly and lying to people to make our own treasure.  Yes, some other lawyers even described us as Ambulance Chasers.  The same type of lawyers who were an important part of the mess and who are trying to entice people again with a so-called instant-100% safe-no win no fee action.

Their laughing at us was actually a good sign for us.  Robin Sharma’s quote: “If people are not laughing at your dreams, at least once a week, you are aiming too low!” describes very well how we process our profession:  fighting like dreamers to protect the rights of British people in Spain.

The point we were fighting for was to make the banks liable for the off plan disasters they had financed, for buyer’s money they held in developer’s accounts and whose refunds they often guaranteed in writing.  In many cases, when a client did not have an individual certificate of Bank Guarantee, there was NO WAY TO OBTAIN YOUR REFUND, so thousands of people ended up with no house and no money in a foreign country with an unknown legal system.

Back in 2009 we took this fight upon our shoulders and filed our first LEY 57/1968 Lawsuit in February 2011……..and the victories started coming, initially from the First Instance Court in Hellín in June 2012 and more recently from the Supreme Court in Madrid in March 2016.

Five milestones we have achieved so far are:

  1. Keith Rule’s Finca Parcs Case in Hellín against Banco CAM (now Sabadell) and the developer Cleyton Ges was won in the First Instance Court in June 2012 and then confirmed by the Albacete Provincial Appeal Court in April 2013.  That victory was the energy for many more victories to come after Keith joined our team in 2013.  Banco CAM was condemned to repay our clients all their off-plan deposits plus legal interests and legal costs.  A full account of the whole story is at Finca Parcs Action Group
  2. Herrada del Tollo and San Jose cases in the development Santa Ana del Monte has produced numerous victories for our clients in that unfortunate project.  The most recent being in October 2016.  Banks who received the buyer’s off-plan funds and the entities issuing General Guarantees (Popular, SGR…) blame each other on many occasions.  The Supreme Court has already established doctrine by which once there is a General Guarantor, banks where deposits were made are not liable.  The simple mention of the existence of a General Guarantor in a contract opens the possibility for the buyer to claim against that Guarantor.  There is no limit to liability of the Guarantor, all the amounts the buyer can prove as being paid, plus legal interests from date of payment need to be refunded.
  3. Huma Mediterráneo and Casares del Sol Victories are also very meaningful as there were hundreds of affected people in those developments.
  4. Los Lagos de Santa María in Marbella made us especially proud as this is one of the developments subject to a corruption case by the Marbella Local Council.
  5. Last but not least in our Top 5 is our case that the Supreme Court used in March 2016 to confirm its doctrine on Banks liabilities for receiving buyer’s off-plan funds.  This is of great satisfaction to us as the Highest Court in the country used our victory to confirm this successful strategy against the Bank.  The same strategy we have been fighting for since 2008 when Keith Rule first contacted us.  We actually lost this case against the developer’s Bank in both the First Instance and Provincial Appeal Court, however the client trusted us enough to instruct us to submit a Cassation Appeal to the Supreme Court which we won!  The development was “El Sobrao” in Triquivijate, Fuerteventura.

 The Supreme Court has now fixed jurisprudence (Case Law) regarding Banks liabilities and obligations according to LEY 57/1968 as follows:

‘In house sales governed by Law 57/1968 credit institutions (banks) that receive income from buyers in the promoter’s account without requiring the opening of a special account and the corresponding guarantee or warranty, shall be liable to the buyer for the total amounts paid by buyers and deposited in the account or accounts the developer has opened in that entity’

There are still hundreds of cases in the Courts.  We are very positive on the outcome of these and future cases as there is now, after all these years, a clear interpretation of LEY 57/1968 by the Supreme Court.  All we hope is that some of those funds that we successfully recover for our clients are then wisely re-invested in Spain to make many retirement dreams finally come true.

Like 3


M11Block said:
03 December 2016 @ 19:19

We live in hope Matia. Our case is in your hands.

M11Block said:
03 December 2016 @ 20:03

Sorry for typing error.

We live in hope MARIA, our case is in your hands.

Poedoe said:
04 December 2016 @ 10:52

We purchased in 2007-8, Requested the information from the Spanish Lawyer in Alicante, Regarding the legal safety of the purchase. the Lawyer confirmed that all searches etc would be taken place and our purchase secure.
Now almost 2017 we are still looking for justice from the courts for the uncompleted work on our complex which our Builder charged all the purchasers for. We still wait for the Electricity to be legal as the builder removed the vital machinery leaving the complex of over 40 apartments with just one meter. The Road is still a dirt track, The Lift lays rusting because the builder failed to pay the bill. Just a third of the units were purchased by non Nationals, The builder rented approx 10 of the apartments to undesirable tenants who caused much damage and never paid any community fees. Using a Rent to buy system. The local council took on the Road Building with the consent of the complex community in 2014. We still have no built road. yet all the non National Owners are paying €100 to €80 a month in community fees, The fund held waiting to the new Transformer to be installed and the many parcels of work the builder did not complete. YET the Builder let many of the apartments he owns collecting rent. He never paid any of the Utility bills leaving huge debts to be paid by the community funds.
The Community of fully paid up Owners have employed a Caretaker who lives in free, with his Family for the security of the building and peace of mind for the community. We have waited since 2014 for the local council to complete the road because the community were not allowed to without permission. Sadly we all feel very trapped because nothing is happening.
We are still waiting for the court to go forward and claim the monies the Builder and our gang of legal beavers to solve our Community problems.

mariadecastro said:
04 December 2016 @ 17:21

Are there planning irregularities? Still present?

briando55 said:
09 December 2016 @ 09:32

In the U.K. When you purchase a property the solicitor carrying out the conveyance has responsibility to ensure all these matters are in place and discuss these with you at the time of completion.

The surveyor you instruct (which you should always do) provides information from the building itself to you and your solicitor to bring up any potential issues prior to completion.

A lot of purchases I read about from EOS experience seemed to be part of a half baked system that needs urgent reform (I do hope most transactions are really straight forward though).

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