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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.

Article in THE TIMES - 10 July 2013
Wednesday, July 10, 2013 @ 12:24 AM

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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