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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 1419. Case won in the Madrid First Instance Court against BANKIA for an off-plan property from the developer Studios Inmobiliarios Howell at Mundo Aguillo
20 December 2016 @ 14:27

We were very pleased to inform our clients recently that we had won their LEY 57/1968 Bank Action case against Bankia in the First Instance Court in Madrid for an off-plan property they reserved at Mundo Aguillo from the developer Studios Inmobiliarios Howell.

No Individual Guarantee

Our clients paid their off-plan deposit to the developer’s account at Bancaja (now Bankia).  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 cancelled the Purchase Contract due to serious breaches by the developer and found Bankia and the Developer jointly and severally liable according to Article 1.2 of LEY 57/1968 to refund the full amount of the off-plan deposit plus legal interest from the date the buyers paid to the developer’s bank account.  Costs of the First Instance procedure were also imposed on the Bank & Developer.

The Judge based her Sentence on the Supreme Court Sentences dated 21 December 2015 & 9 March 2016.

Interesting Statements from the First Instance Sentence

“The plaintiffs filed a Lawsuit against the developer Studios Inmobiliarios Howell & Bancaja (now Bankia), requesting cancellation of the Purchase Contract and the joint conviction of the developer & bank according to its responsibility under LEY 57/1968.  The plaintiff requested the refund of the total amount paid to the developer’s bank account under the Purchase Contract plus interest & costs.

On 15 December 2006 the plaintiffs signed a Purchase Contract to purchase a property in the development ‘Mundo Aguillo’ from the developer Studios Inmobiliarios Howell SL.  According to clause 5 of the purchase contract the property should have been completed within 300 days from the date of the contract.

At the time of signing the purchase contract the plaintiffs paid their off-plan deposit to the developer’s account opened at Bancaja (now Bankia).

The plaintiffs did not receive a Guarantee for their off-plan deposit.

The Town Hall of Pulpí stated that as of 7 October 2015 the developer had not started the construction of the property due to the fact they never obtained the corresponding building licence.

A serious contractual breach is clear and the purchase contract is cancelled.

The defendant financial institution in which the off-plan payment was deposited must be jointly liable with the developer for the return of the money to the plaintiff together with the payment of interest.  This is a responsibility under the provisions of article 1.2 of LEY 57/1968.

This has been confirmed by the Supreme Court Sentences dated 21 December 2015 & 9 March 2016.

The financial institution that receives the off-plan deposit is obliged to demand that the amounts are held in a separate special account and that the corresponding Guarantee is issued.  If the bank receives off-plan deposits without having opened the separate special account or without ensuring the corresponding guarantee is issued, then it will be jointly responsible with the developer for the refund to the buyer in the same way that the guarantor or insurer would have been if the property did not commence or complete on time.

Therefore the Lawsuit is upheld.

It is also appropriate that the defendants are jointly and severally liable to pay legal interest from the date the buyer paid the amounts to the developer’s bank account.

In accordance with Article 394.1 of the Civil Procedure Act, having fully upheld the Lawsuit the costs must be imposed on the defendant bank”


Possible Provincial Court Appeal

Bankia has 20 working days from the date of notification of the Sentence, which was 15 December 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Madrid.

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.

A typical street (one of the oldest) in the neighbourhood of Austrias in Marid.



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