El blog de Maria

We recently informed our clients that we had won their LEY 57/1968 Bank Action case against Banco Popular in the First Instance Court in Orihuela for an off-plan property they reserved at Playa Golf III in Jumilla from the developer San Jose.

No Individual Guarantee

Our clients paid their off-plan deposit to the developer’s account at Banco Pastor (now Banco Popular).  The Bank failed to issue or verify the existence of the Individual Guarantee for the buyers off-plan deposit paid to the developers account opened in its branches.

First Instance Court Sentence

The First Instance Court has found Banco Popular guilty according to its obligations under Article 1.2 of LEY 57/1968 and sentenced the Bank to refund the full amount of the off-plan deposit plus legal interest from the date the buyers paid to the developer’s account.  There was no imposition of costs of the First Instance procedure; therefore each party will pay its own costs.

Interesting Statements from the First Instance Sentence

“The plaintiffs filed a Lawsuit against Banco Popular, requesting the conviction of the bank according to its responsibility under LEY 57/1968.  The plaintiffs requested the refund of the total amount paid under the Purchase Contract and recognised in the insolvency procedure of the developer, plus interest & costs.

In 2006 the plaintiffs signed Purchase Contracts to purchase off-plan properties from the developer San Jose Proyectos e Inversiones S.A. at Playa Golf III-Orihuela in Jumilla.  The properties were due to be completed in December 2007, however on that date the building works had not even started.

San Jose is in liquidation and the claimants are recognised as creditors of the company in the insolvency procedure.

The claimants state in their Lawsuit filed in May 2012 that the defendant Bank issued a General Guarantee to the developer but failed to issue the Individual Guarantees for the money received into the developer’s bank account opened in its branches.

The Bank opposed the Lawsuit on the grounds that the account to which the buyers paid their off-plan deposits was a normal current account and not a special account.  The Bank also stated that the Guarantee referred to by the claimants was issued to another developer, Herrada del Tollo S.L. and that it was not a General Guarantee.  It also said that LEY 57/1968 did not apply to residents of the United Kingdom and that the purchases were purely speculative.  Finally the Bank said that it did not intervene in the purchase contracts and that the properties were completed with First Occupation Licences in January 2009.

Regarding the responsibility of Banco Pastor (now Banco Popular), we must take into account the Supreme Court Sentences of 23 September 2015 and the most recent Supreme Court Sentence of 21 September 2016 where in a similar case the responsibility of the Bank is established.

The bank account must be considered a Special Account, even though the bank considered it to be a normal current account, because it was clear that the entries into the account were from buyers of off-plan properties and therefore the bank had the obligation to open a Special Account and to issue or verify the existence of the corresponding individual guarantees.

This is a line of jurisprudence that has been ratified by our Supreme Court on a number of occasions”

Possible Provincial Court Appeal

BANCO POPULAR has 20 working days from the date of notification of the Sentence, which was 17 November 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Alicante.

Although Appeals must be submitted strictly within a 20 working day deadline, we do not normally receive notification of an Appeal or of a firm sentence from the Court until a few weeks after the deadline due to the workload of the Court.

If an Appeal to the Provincial Appeal Court is filed by the Bank it will be necessary for us to file an Opposition to the Appeal on behalf of our client.

Jumilla, Murcia, Eastern Spain