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Spanish Off-Plan Property - Bank Guarantees - LEY 57/68

This blog is for all those Off-Plan property purchasers in Spain who have not received Bank Guarantees for their deposit funds as required by Spanish Law, in particular LEY 57/68 Article 1.1 and 1.2 and are now at risk of losing their money.

In addition many purchasers who did receive Bank Guarantees are now finding that the Spanish Banks are refusing to honour them without legal action being taken by the purchaser.

UK man beats Spain's banks on home ground
Thursday, July 18, 2013

 UK man beats Spain's banks on home ground

Thanks to an all but forgotten 45-year-old property law he found with the help of Google Translate, Englishman Keith Rule has provided hope to thousands of expats who lost money in failed Spanish property ventures during the credit crunch.

Published: 17 Jul 2013 14:23 GMT+02:00 
Updated: 17 Jul 2013 14:23 GMT+02:00

The Local – Spain´s news in English

In 2006, Keith Rule bought two houses off the plan in Albacete province in the south-eastern Spanish region near Murcia.

The high-end Finca Parcs development had everything he was looking for. It was located in inland Spain, the town was nice and there was a good school for his young children.

"But then Spain's housing bubble burst and our house was never built," Rule told The Local by telephone from the southern Spanish city of Algeciras.

Like many other investors, Rule saw initial attempts to reclaim his deposit thwarted. The bank he had paid his money to — then CAM, now Sabadell — refused to return his outlay of £45,983 (€53,000, $70,000).

Unlike many investors in his position, though, Rule refused to give up the fight for the money he'd lost in the property deal.

While trawling the internet with the help of Google translate, this Englishman based in Milton Keynes came across a law which dated back nearly 50 years.

"Law 57/68 (from 1968) was designed exactly to protect people in my situation," Rule told The Local.

"It made banks liable for all kinds of cases where developers didn't meet their end of the bargain."

Armed with this law, Rule eventually went on to win back his deposit with judges ruling in his favour.

Thanks to his hard work, 46 other buyers at the development also had their down payments reimbursed.

The process was far from easy though. Rule had to do some serious lawyer shopping before he found a firm prepared to take on his case.

"It was his persistence that won me over eventually," Maria L. de Castro, Director of Costaluz Lawyers said to The Local, explaining why she had accepted the case.

The lawyer explained that she had come across a relevant ruling in the high court of the Spanish region of Navarre.

There, judges found banks could be liable in certain cases where property developers failed to deliver their products.   

The opinion of a lawyer in Seville also helped persuade de Castro to take on Rule's case.

"But mostly it was the fact that Keith clearly saw that the bank was liable in his case, and that we had to find a way to enforce that liability.

"At the beginning they called us crazy," the lawyer freely admits of her firm's fight to see banks cough up deposits.

"One lawyer criticized Keith very harshly online, saying that he was a cheat and that he was trying to steal clients," de Castro told The Local.

Being a woman didn't help either, she explained. "I think the legal profession thought we were dreamers." 

There were also issues with Law 57/68 which mentioned bank liability without specifying how this would be enforced.

"We had to change people's thinking," said the lawyer.

"Luckily the law came to light at the same time as society was changing as a result of the crisis. There was more acceptance among judges that you can fight the banks".

Given the results of Rule's case, de Castro is now optimistic about similar cases in future.

"A lot of people had given up on getting their money back but this decision has reignited their motivation." 

But de Castro sounded a note of warning for people who may be looking to see their deposits again. "We need to have data," she said.

"You need to be able to show that you cancelled your contract with the developer, and you also need to see if a bank guarantee existed on the property.

"You will also need to be able to show that you made payments to a bank account held by a developer."

Some clients were also lacking a certificate of guarantee (certicado bancario), she added.

"What we have done now (with Law 57/68) is provide a new way to look at these cases," Rule told The Local.

"Of course the judges have to choose on a case-by-case basis. Now, though, we have seen some 35 to 40 similar decisions around Spain."

And despite everything, Rule still feels he has been fortunate.

"We were lucky we bought off the plan in Spain where there is a law. If we had bought in Bulgaria, for example, it would be quite different.

"There was a lot of corruption and greed in Spain during the building boom," Rule says.

"But Spain is slowly rebuilding the confidence people had."   

George Mills (

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Thursday, July 11, 2013


Hope for thousands of Britons who lost fortunes in Spanish property ventures after ex-pats win legal battle with bank to return £1.3million

  • Keith Rule spent hours trawling the Internet for help after a bank refused to return his £45,983 deposit on a villa which was never built
  • He took on bank bosses after discovering a 45-year-old property law
  • Not only has he got his money but he has helped win back nearly £1.3million for 46 other buyers
  • The 46-year-old impressed lawyers so much he has been asked to work with them on a part-time basis

By Gerard Couzens



A laundry owner who feared losing life savings in a Spanish property scandal is celebrating after helping lawyers win a landmark legal case which has given hope to thousands of wronged Brits.

Father-of-two Keith Rule, 46, spent hours trawling the Internet with the help of Google translator after a bank refused to return his £45,983 deposit on an off-plan villa never built because of the economic crisis.

He took on bank bosses after discovering a 45-year-old property law making them jointly responsible with promoters for returning guaranteed deposits on failed developments.

Now the businessman has not only got his money back - but helped win back nearly £1.3 million for 46 mostly British buyers whose dreams of villas on the same development in south east Spain were scuppered.

Mr Rule, from Milton Keynes, Buckinghamshire, impressed the Costa lawyers he instructed to take their case on so much, they asked him to work for them on a part-time basis.

He now combines the day-to-day running of his firm on an industrial estate in his home town with his new job preparing case files for other Brits engulfed in the drama that swept him up when Spanish savings bank CAM washed its hands of buyers after an initial promise of a bank guarantee seven years ago.

Last night Mr Rule, described as a 'dog with a bone' by one of the lawyers who agreed to fight his case through the 1968 law he found on the Internet, urged others in the same situation not to give up.


The 47 buyers involved in the landmark trial at a court in Albacete province near Murcia, south east Spain, have just received all the money back they put down.

Only some of the 617 three and four-bed homes with pools on the luxury Finca Parcs development in Hellin on the Albacete-Murcia border were ever partially finished.

The group are now also applying to the court for case costs and interest on their deposits to be paid.


Only some of the 617 three and four-bed homes with pools on the luxury Finca Parcs development in Hellin on the Albacete-Murcia border were ever partially finished

Mr Rule, who handed over deposits on two villas in November 2006, said: 'At the start of this fight people called me crazy but they don’t now and I’m delighted to have given hope to other Brits.

'There was no concept five years ago in Spain banks could be liable in these sorts of situations.

'We’ve created case law here. 

'I haven’t got a magic wand I can wave for everything but my message to people in the situation I was in is "Don’t give up."

'I’m living proof you can take on powerful institutions and beat them when they’re wrong and you’re right.'

A Spanish judge ruled CAM - now taken over by Sabadell - was guilty of malpractice for failing to ensure deposits were spent only on building the villas and never collecting an equivalent cash safeguard from the promoters.

The holiday home buyers won an initial trial against the bank and Spanish promoters Cleyton Ges in May 2012 - and an appeal in March this year.



A Spanish judge ruled CAM - now taken over by Sabadell - was guilty of malpractice

A second lawsuit on behalf of 13 more Finca Parcs buyers has already been filed - and Mr Rule is working on a third lawsuit with Algeciras, Cadiz-based lawyer Maria de Castro and her brother Jaime who took the first case to court.

Theirs and other Spanish legal firms around Spain are also winning cases based on law 57/1968 - the law Keith uncovered on Google which has spared Brits the nightmare scenario of exhausting court battles against promoters with no money.

He said last night: 'I bet the CAM executives I demanded my money back from five years ago wished they had given me a cheque that day.

'The court case set a legal precedent and is being used by other law firms around Spain.'

Jamie de Castro, of  De Castro lawyers, added: 'It’s amazing that a non-Spaniard who didn’t even speak Spanish and was using Google translator helped get us this far.

'I have no problem in admitting I wasn’t confident at the start this would work and feared Keith might be wasting time and money.

'But he insisted and insisted and began to make us believe it could.

'My sister described him once as a dog with a bone which I hope he takes now as a compliment.'

Pensioner Reg Matthews, a friend of Mr Rule's who has had his £22,980 deposit returned, added: 'It’s a great relief to have my money back although I was keen on having a place in the sun like thousands of other Brits.

'Without Keith’s help I and many others would have lost everything.'


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Article in THE TIMES - 10 July 2013
Wednesday, July 10, 2013

Article in THE TIMES - WEDNESDAY 10 JULY 2013


Spanish bank forced to pay back €1.5m deposit

Graham KeeleyMadrid – 10 July 2013

A British businessman has won a landmark legal victory against a Spanish bank that was refusing to return €1.5 million in deposits that he and other buyers had paid for 47 villas.

Keith Rule, 46, led a group of British and Irish people who had invested off plan in a luxury development near Murcia, southeastern Spain, marketed as the “real Spain”.

They paid their deposits in 2006 but when the property bubble burst in 2008 the developer collapsed, and the Spanish bank, Caja de Ahorros del Mediterráneo, refused to return their money.

Faced with losing €53,000 (£46,000) of his own money, Mr Rule researched a 1968 property law and used Google translator and a basic knowledge of Spanish to fight back. Spanish lawyers told him that he was unwise to take on a bank and would lose but he convinced one lawyer to take up his case.

When the case came to court, the bank demanded that all 47 buyers attend. Mr Rule organised their journey.

A judge sitting in Albacete ruled against the bank and ordered it to pay back €1.5 million in deposits to Mr Rule and the 46 other buyers.

The judge ruled that the bank was guilty of malpractice by failing to safeguard deposits. The same court dismissed an appeal by the bank, which must also pay costs and interest.

“This could have implications for many more British people who have bought properties in Spain but have lost out,” Mr Rule, who runs a laundry in Milton Keynes, said. “It proves that if you persevere then you can get justice in Spain but it is a bit of a lottery depending on whether you get the right judge.”

Caja de Ahorros del Mediterráneo, which was later taken over by Banco Sabadell, claimed that Mr Rule and other buyers were not entitled to their money back because they had no bank guarantees. It said the developer, Cleyton Ges SL, should have guaranteed the deposit money, not the bank. However, Mr Rule argued that the bank had a duty to guarantee deposits in case the developer went bust.

The case revolved around Finca Parcs, a luxury development of 617 villas. Today, seven years after hundreds of Britons were lured into spending millions on the home of their dreams, the development is a ghost town. Mr Rule has become a part-time adviser on the issue to a Spanish law firm. Another 53 buyers are still out of pocket and thousands more British expatriates in Spain face similar battles after the collapse of the property market.

Giles Paxman, the British Ambassador in Madrid, wrote to Mr Rule to congratulate him on his victory. A spokesman for the bank said that it would not appeal.

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Tuesday, July 9, 2013

Financial Justice

The British buyers fight back

Foreign property investors are battling to recover money lost in deals gone bad

Rafael Méndez – El País English Edition - 9 JUL 2013 - 14:20 CET

Keith Rule says that he first thought about buying a house in Spain after a friend told him about an advertisement he had seen in an easyJet in-flight magazine for a property development in Hellín, called Finca Parcs-Las Higuericas, in Albacete province. The year was 2006, the height of the country's property boom.

"It was being sold as 'the real Spain'," says Rule. The development was not on the coast, but inland, in a lovely place," explains Rule on the phone from the UK.

Finca Parcs-Las Higuericas was going to consist of 617 chalets with their own swimming pools. Few of the 300 or so British or Irish investors who put down a deposit knew the area, but the layout plans and artist's impressions looked good, the price was right... what could go wrong?

Spain's property market collapsed in early 2008, taking with it hopes that Finca Parcs-Las Higuericas would ever materialize. The company behind the project, Cleyton Ges, went bankrupt, and Keith Rule began to worry that he would never get back the 53,434 euros he had put down, much less get his Spanish vacation home. The bank that had acted as intermediary in the promotion, CAM, was in serious financial difficulties of its own: it was unable to finance the operation, and would not return the money it had taken. He contacted a lawyer, who told him to sue Cleyton Ges. "But I knew that this wouldn't get me my money back. I looked on the internet and using the little Spanish I have, discovered that there was a law from 1968 stating that the bank was also responsible."

Using my Spanish, I found a 1968 law saying that the bank was responsible"

The little-known legislation that Rule uncovered details procedures in the case of deposits put down on the construction and sale of dwellings, and outlines in clear terms the guarantees that a home buyer is entitled to. The preamble states that the law was passed in response to "the justified alarm among the public caused by repeated abuses, which on the one hand, are a threat to social stability, and on the other, are clear breaches of the law."

The law was designed to avoid the repetition of cases such as Nueva Esperanza, a property developer that took money from more than 10,000 savers without ever building a single home. "The measures we are taking are meant to resolve an indignant problem, because people that had spent a lifetime saving to buy an apartment saw their money disappear overnight, and were left with no home," said the then-housing minister, according to the newspaper Abc . The law not only required the property developer to return buyers' money, but required the bank to guarantee that any amounts it received were spent on construction. The bank would, from now on, have to supervise the money and provide a guarantee "under its own responsibility." In other words, if a bank takes your money as a deposit on a property, if that property is not built, it is responsible for returning your money.

When the property market collapsed, lawyer Javier Domínguez Romero was contacted by people who, like Keith Rule, were in danger of losing their deposits, and who had also looked at the 1968 law. "The law had been forgotten about for years during the economic boom. Few lawyers even knew about it," says Domínguez, who later published a book on the subject.

Around the same time, Keith Rule had begun looking for a Spanish lawyer who would handle his lawsuit, as well as those of 46 other would-be home owners. Eventually he met with Jaime de Castro, a Gibraltar-based lawyer used to representing British clients within the Spanish legal system. The trial was held in May 2012. CAM tried delaying tactics by saying that all those bringing charges must appear in person in court. All 47 made the trip to Albacete provincial court, although none of them were questioned by CAM's legal team. CAM's argument was simple. It had no "legal relationship" with the 47, and said they would have to pursue their case against the property developer. The bank did not have guarantees for each depositor, as it was required to do so by law, should there be any problem with the construction.

The judge hearing the case agreed that CAM was indeed responsible and ordered it to return the 1.5 million euros that the British had paid to the developer: "CAM knew that the deposits placed in accounts in its branches were from the buyers of a property development and completely abandoned its responsibilities to them under the 1968 legislation, and as such committed bad banking practices." The sentence has since been ratified, and the British investors are getting their money back, with interest and costs. CAM, which has been taken over by Banco Sabadell, has not appealed against the ruling. The bank says that it inherited the problem. The British embassy says that it will use the ruling for future cases.

Rule, who is now working with the legal team that won the case, says that the ruling should give hope to anybody who has lost money to a property developer. "This law, after 45 years, is more necessary than ever," he says. He has set a precedent that in general terms provides much greater protection to consumers, because the bank has to pay, even if there is no guarantee.

Similar cases have emerged in recent months of foreign investors getting their money back from bankrupt property developers. Alec Edwards works for the Liverpool fire brigade. In 2009, he put down 150,000 euros as a deposit on a property in Trampolin Hills, in Murcia. "We could see that there was no building work, so we asked the bank to execute the guarantee, which it refused to do." Two months ago, after bringing legal action, he got all of his money back. His lawyer, Guadalupe Sánchez, says that British people are more inclined to take legal action. "Spaniards do not like taking on the banks, but the British seem to have no fear," she explains. Antonio Flores, a Malaga-based lawyer who specializes in construction disputes involving non-Spaniards, agrees: "These people really put their foot down, and demanded a response from the system."

Spanish judges are at last beginning to do something to improve the country's poor reputation in Europe. In March, the Supreme Court demanded that foreigners buying here be given special protection. Rule says that he is happy, not just for himself: "Spain has shown that it is a serious country, and that if you insist, the justice system works."

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Tuesday, July 9, 2013


BBC Radio 4 Interview with Keith Rule (Finca Parcs Action Group) & Jaime de Castro (Costa Luz/De Castro) first broadcast on 27 May 2013 after the Sentence against Banco CAM was definitive and final:

BBC Radio 4 Interview with Keith Rule (Finca Parcs Action Group) & Gerard M Vazquez (Lawyer from VAZQUEZ ESTUDIO JURIDICO) first broadcast 11 July 2012 following the victory in the First Instance Court – June 2012:

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Tuesday, July 9, 2013


Compradores de promociones fantasma recuperan el dinero por una ley de 1968

Los jueces culpan a la banca de incumplir la normativa, que les hace también responsables

El banco debe garantizar que las cantidades que recibe el promotor van a la construcción


Rafael Méndez – El País - Madrid - 7 JUL 2013 - 00:00 CET


Keith Rule recuerda que un amigo le pasó un anuncio que había visto en una revista de Easyjet sobre unas casas en Hellín (Albacete). Era 2006 y no había posibilidad de equivocarse al comprar casa en España. “Lo vendían como ‘la verdadera España’. No era un resort en la costa, sino en el interior, en Albacete, en un sitio muy bonito”, recuerda hoy por teléfono desde Londres. “Finca Parcs-Las Higuericas” se llamaba la promoción. Iban a ser 617 chalés con piscina en el campo. No era el destino habitual y a pesar de eso atrajo a unos 300 británicos e irlandeses que dieron un anticipo por la vivienda. Compraron sobre plano, cuando aún no había nada. Keith, que tiene una lavandería, pensaba pasar temporadas en España.


Pero pronto vio que algo se había torcido. De arriba abajo, la explosión de la burbuja inmobiliaria llegó inexorable a Hellín. Y la promotora, Cleyton Ges, se quedó sin dinero para las cinco fases. Era 2008 y Keith vio que los 53.434 euros que había dado como anticipo estaban en serio riesgo. Ni la CAM, la caja que había recogido todos los ingresos, podía financiar la obra ni devolvía el dinero. Keith comenzó a consultar a abogados. “Me decían que demandara al promotor, pero sabía que así no recuperaría mi dinero. Busqué en Internet con el poco español que sabía y vi que había una ley de 1968. La traduje con Google y leí que el banco también era responsable”.


La ley es la 57/1968 “sobre percibo de cantidades anticipadas en la construcción y venta de viviendas”. Se trata de una concisa norma, dos folios y siete artículos, que da todo tipo de garantías al comprador de viviendas. La ley explica que surge por “la justificada alarma que en la opinión pública ha producido la reiterada comisión de abusos, que, de una parte, constituyen grave alteración de la convivencia social y, de otra, evidentes hechos delictivos”.


La norma pretendía evitar casos como el de la sociedad Nueva Esperanza, que en los años sesenta se llevó el dinero de más de 10.000 ahorradores sin levantar los pisos prometidos. “Las medidas tomadas vienen a resolver un problema indignante, ya que gente que estaba ahorrando toda su vida para hacerse con un piso se veía de la noche a la mañana con el dinero perdido y sin vivienda”, declaró entonces un portavoz del Ministerio de Vivienda, según recogió el diario Abc. La ley no solo exige al promotor la devolución del dinero, sino que dice que el banco debe garantizar que las cantidades que este recibe deben ir a la construcción. El banco debe fiscalizar el destino del dinero y exigir un aval “bajo su responsabilidad”. Esos derechos, según la norma, son “irrenunciables”.


Con el desplome de la burbuja, el abogado Javier Domínguez Romero comenzó a recibir consultas de gente que se había quedado pillada en promociones a medias y se estudió la ley de 1968. “La norma había dormido el sueño de los justos durante los tiempos de bonanza económica. Los abogados apenas recurríamos a ella”. Publicó un libro sobre la ley y desde entonces ha perdido la cuenta del número de ejecuciones de avales que ha llevado.


Por esa época, Keith Rule comienza su lucha. Quiere ir más allá. Recuperar el dinero aunque el promotor ni había depositado los avales para 100 de los compradores. No llega a encontrar a Domínguez. De hecho, le costó dar con un abogado dispuesto a ir contra la CAM —“me llamaban loco”—, hasta que con 46 compradores convenció a Jaime de Castro, de un bufete de Algeciras especializado en clientes británicos. El juicio se celebró en mayo de 2012 y fue un espectáculo. La CAM pidió que fueran todos los demandantes, con lo que 47 familias británicas e irlandesas se desplazaron hasta Hellín, aunque luego su representante no les hizo preguntas. El argumento de la caja era que no tenía “ninguna relación jurídica” con los británicos, que estos debían reclamar al promotor, que no tenía los avales a los que le obligaba la ley por si no finalizaba las casas. Sin embargo, la juez consideró que el banco también era responsable. Hace un año, les dio la razón y ordenó a la CAM que devolviera 1.494.710 euros que los británicos habían dado a la inmobiliaria. Argumentó que “la CAM conocía que los anticipos ingresados en cuentas abiertas en sus sucursales se trataban de ingresos a cuenta de compradores de una promoción inmobiliaria e hicieron dejación absoluta de sus obligaciones que como entidad financiera le impone la ley 57/68 incurriendo su conducta en una mala praxis bancaria”.


La Audiencia Provincial ratificó la sentencia hace un mes y los británicos ya están cobrando, y con intereses y costas, lo pagado. La CAM, hoy parte del Sabadell, ni recurrió al Supremo, como confirma un portavoz. El banco considera este caso uno más de la herencia envenenada que dejó la caja. La Embajada británica afirma en una carta que lo usará como guía para casos similares. Keith, que ahora colabora con el bufete que llevó el caso, sostiene que su sentencia da una nueva esperanza a quienes han enterrado dinero en la burbuja inmobiliaria: “Esta ley es, 45 años después, más necesaria que nunca”. Domínguez sienta un precedente que, de generalizarse, daría mucha más protección al consumidor, ya que el banco paga incluso si no hay aval. Y podría abrir otra vía de agua en el sistema bancario.


Aunque los detalles cambian, hay muchos más clientes que, contra pronóstico, están recuperando el dinero que dieron para promociones fantasma. Alec John Edwards es un técnico del servicio de bomberos de Liverpool que en 2009 dio 150.000 euros como anticipo por una casa en el Trampolin Hills, en un diminuto pueblo de Murcia: “Como vimos que no se construía pedimos ejecutar el aval, pero el banco se negaba”. Hace dos meses, tras un pleito, recobró los 150.000 euros, y aún no da crédito. Su abogada, Guadalupe Sánchez, opina que los británicos tienen más costumbre de pleitear: “A los españoles les cuesta más ir contra la banca. Los anglosajones lo tienen más interiorizado”. Antonio Flores, abogado de Málaga especializado en atender a clientes extranjeros en temas inmobiliarios, coincide: “Estos insistieron mucho más y exigieron una respuesta del sistema”.


Los jueces empiezan a paliar la mala fama del urbanismo español en Europa. El Supremo exigió en marzo pasado especial protección para los extranjeros que compren una vivienda. Keith resume: “España ha demostrado ser un país serio, en el que si perseveras, la justicia funciona”.

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