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El blog de Maria

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

Legal tip 720. Compassion with developers
05 March 2012 @ 15:51

 Because the euro created the real estate boom in Spain with overecredit to developers and buyers.... after consumers, it is with developers that is my willing to help. For a reasoned argument about this perspective, please read De Gaulle here

Because all was created by a crazy financial boom.

The formula that is now working fine is that of buyers and developers together against Banks.


Olvera. Spain - 08

"Olvera Spain - 08", Olvera, Cadiz, Spain, by Drumsara, at

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Anne said:
05 March 2012 @ 17:34

Yes of course Banks should be made accountable but it's essential to discriminate between good developers and bad here, and to recognise the whole picture from a purchasers' perspective.
Some developers (with law firms) have been more than happy to turn a blind eye against the malpractices that have affected so many innocent purchasers, for which we are all paying the price. Plus how many developers have set up their own "people" in positions of responsibility within the newly formed communities, only to find that they have abused and continue to abuse their positions, thereby failing to reflect the interests of those whom they are supposed to represent.
What is required now is a far more ethical and regulated approach to the whole real estate industry in Spain if developers wish to regain credibility. And this should run alongside the common fight against the Banks.
To focus only on one area i.e. the Banks and ignore the need for reform and accountability from within the real estate industry and legal profession/Justice system as a whole, will I fear only delay a positive outcome.
This is a great opportunity to clean up Spain's act, to establish credible kite marks for agents, developers, lawyers, credible Bar Associations and Law Societies, Banking regulation etc.
I live in hope!

Maria said:
06 March 2012 @ 13:43

Dear Anne:

Yes, a whole set of reforms need to be materialised. I do hope the new government will pay specific attention to the off-plan industry as a whole: banks, developers, estate agents, lawyers...
It has been a crazy time which has made evident many weak and uncovered corners of the practise of many of these actors

Let´s keep the fight for the good of many!


Anne said:
06 March 2012 @ 22:24

To your knowledge do the details of "uncovered corners" and their impact on clients and lawyers ever get reported back to the Spanish Government from the “responsible” legal fraternity in Spain, to keep the Government educated of the realities and the need for reform?
Have these problems been formally logged in writing, and more importantly have workable solutions ever been formally identified by those with specialised legal knowledge?
Is there are any action group working to effect change from within the Spanish legal fraternity themselves? If not, why not?
Just as one practical example, if developers were made to automatically provide funds as per the first instance ruling to the courts (for safe keeping) at the point of appeal, until such time as a judicial resolution was reached, this would act as an effective disincentive for those developers “playing the system” of delays, thereby preventing any fraudulent asset stripping in the interim. It would also relieve the system of preliminary enforcements which can clog up the already over stretched system.
Likewise, at the point of appeal resolution, the judiciary could automatically follow through as a matter of course Law 57/68 by reviewing/requesting details relating to any Bank guarantee (generic or individual) made available at that time. This would ensure cases relating to offplan purchase are speedily resolved as was the intention of this BG law from the outset. Banks should not be able to cherry pick when this law is made applicable. This would ensure that consumer protection via existing law 57/68 was enforced at the point of proven developer breach of contract, and would automatically form part of the appeal resolution, saving time and effort by all.

Rosemary said:
07 March 2012 @ 12:58

Maria, I do not know how you can feel compassion towards developers. They are definitely not the ones who are losing money - we are ( and yourself ) in our case. As you know our experience is that the developer took our money, broke the contract and even after long prolonged court cases will not return our money. It is the developers who took our 40% and from others up to 100%, these deposits alone would pay for the houses to be built. As Anne said there might be some good developers but from this website, the majority are crooks.

I hope you don't feel too compasioniate about the developer in our case ( that you have won) as they do not deserve any compassion. The corrupt developer should be in jail and not free to open new sites only a few miles from our development taking other poor deluded new buyers for their deposits.
If developers and builders are genuine and have been taken advantage of by the banks, why are they set up to take your deposit under one name GM and sign your contract under another name which turns out to be a subsidiary working from a hole in the wall in Murcia. Any mail is then picked up by the parent company in Alicante by the main company GM. I have no sympathy or compassion for developers only for the buyers cheated out of their savings and many many years of worry, frustration and ill health trying to get back what is rightfully theirs. Our Developer ignored any official or legal communication right from the beginning in 2007 and is still ignoring the Courts communication in 2012. Please please don't waste your compassion on Developers as we will never see our money again.

Maria said:
07 March 2012 @ 13:29

Of course Rosemary. Do not worry. You have been the most affected parties.

Looking to things from the broadest angle. A crazy financial overrun, captured every builder who made money capturing every buyer. But, the origin of the problem in the big, whole picture is the financial syatem and specially as De Grauwe explainn in that article, the EURO craziness.

Of course, you buyers are first to rescue and help.

Suzanne said:
08 March 2012 @ 17:44

Feel compassion for developers who've paid backhanders to MANY town hall officials for illegal licences?

Feel compassion for developers who've taken out 2nd & 3rd mortgages on property they no longer own?

Feel compassion for developers who have been cosily tucked up in bed with lawyers & banks to very cleverly defraud honest buyers?

Feel compassion for developers who totally ignore court judgements to pay back deposit monies, and are allowed to do this over & over again with impunity? etc etc etc....

You must be out of your mind.

The 'origin' is NOT 'Euro craziness' but endemic fraud and corruption at the highest levels.

Maria said:
09 March 2012 @ 09:12

The whole mess and illegal conducts mainly promoted by the lack of control of Banks.

So, against to whagt it might sem, Banks paid the worse role and made and keep making the higher benefits.Developers were their instruments.

Of course I am not justifying the corrupted behaviours of many developers and some lawyers. Of course not.

Keith said:
09 March 2012 @ 12:28

The Banks were the 'vehicle' through which most of the illegal activity and corruption took place.

Many developers were only too happy to use this 'vehicle' as a means to carry out their corrupt activities.

I am sorry to say corruption was and still is prevalent in the Spanish real estate sector.

I have no compassion for any developer, agent, bank, town hall, lawyer etc who was/is part of this widespread corruption.


Maria said:
09 March 2012 @ 12:51

As always, you have convinced me. Better than that title, I would better use:

Developers: the greedy and silly victims

Or... what would you propose Keith?

Have you all a great weekend.


anne said:
09 March 2012 @ 20:03

I would hope for a broader perspective in the title for example, "Let's work together to effect timely justice and fair civilised methods to control corruption in Spain"!!

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