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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.

FINCA PARCS ACTION GROUP - LAWSUIT 2 - TRIAL - 28 SEPTEMBER 2015
22 September 2015 @ 13:18

FINCA PARCS ACTION GROUP vs CAJA DE AHORROS DEL MEDITERRÁNEO (CAM BANK) & SPANISH PROPERTY DEVELOPER, CLEYTON GES SL

FINCA PARCS ACTION GROUP – LAWSUIT 2

TRIAL TO TAKE PLACE IN THE FIRST INSTANCE COURT IN HELLÍN ON MONDAY 28 SEPTEMBER 2015 AT 10AM

 

FINCA PARCS ACTION GROUP – LAWSUIT 2 TRIAL

Disgraced CAM Bank, once described by the Governor of the Bank of Spain as the ‘worst of the worst’ is back in Court again.  On Monday 28 September at 10am the Trial will take place for 13 members of Finca Parcs Action Group Lawsuit 2 against the off-plan property developer, Cleyton GES SL & the financing bank, Banco CAM, which was purchased by Banco Sabadell.

The group members in Finca Parcs Lawsuit 2, which was submitted to the Court in December 2012, are claiming a refund of almost half a million Euros that they paid between 2005 & 2008 to the developer’s accounts opened at Banco CAM for off-plan properties that were never built.  According to Spanish Law, LEY 57/1968 the Bank, under its responsibility, should demand that the corresponding individual Guarantees are issued for off-plan buyers funds held in the developer’s accounts at its branches.  The Bank failed in this legal obligation.

The off-plan project, Las Higuericas Finca Parcs, which is close to the village of Argramón in Albacete, has been abandoned since 2009 when the bank withdrew funding and the developer ran out of money.  Only 10% of the 617 luxury detached villas were completed, but not even these were issued with the First Occupation Licence by the local Town Hall.

FINCA PARCS ACTION GROUP LAWSUIT 1

Banco CAM has already lost one landmark legal case on this development to the 47 buyers in Finca Parcs Action Group Lawsuit 1.

In that case the First Instance Sentence issued in June 2012 which was then ratified by the Provincial Appeal Court in April 2013 concluded that both the developer and Bank failed to fulfil their legal obligations according to Spanish Law, LEY 57/1968 and that CAM Bank was guilty of malpractice and a complete dereliction of its duties.

The Bank & developer were convicted jointly and severally to return off-plan deposits paid by the 47 buyers totalling almost 1.5 million Euros.  Banco CAM paid and all the group members received a full refund of their off-plan deposit plus interest & costs.

LAWSUIT 2 CLAIMANTS CALLED TO APPEAR IN COURT BY BANCO CAM

In May 2012 Banco CAM called all 47 group members of Lawsuit 1 to the Court in Hellín for questioning at the Trial.  Despite the fact that all 13 claimants in Lawsuit 2 are in exactly the same situation as the successful claimants in Lawsuit 1, the Bank has still called 3 of the Lawsuit 2 claimants to appear in person at the Trial for questioning.

The trial will take place in the First Instance Court in Hellín on Monday 28 September and the Judge is expected to issue her Sentence a few weeks after that.


Finca Parcs Action Group Leader, Keith Rule says:

“It was hugely significant when we beat CAM Bank in Lawsuit 1 in 2012 and even more so when the First Instance Sentence was then confirmed by the Provincial Appeal Court in April 2013.

But here we go again with the Trial for Lawsuit 2 and the Bank has yet again called claimants to appear for questioning in Court.  Let us hope that the outcome will be the same as in Lawsuit 1.

In 2008 & 2009 when I formed the Finca Parcs Action Group I was of the opinion that developer’s banks had liabilities and obligations according to Spanish Law, LEY 57/1968, regarding off-plan deposit funds, but one of my biggest hurdles back then was to find a Lawyer who also shared my view. 

Fortunately I found Costaluz Lawyers, who since winning the first Finca Parcs case have now won similar cases for many other clients on failed off-plan property projects all over Spain.

We have worked tirelessly since 2008 to highlight this issue in the media and to the Spanish & British Governments.  The Finca Parcs case has no doubt helped to strengthen the cases of other off-plan buyers who did not receive the legally required Bank Guarantees, but there are still many people who paid off-plan deposits between 2002 & 2009 who have not yet started legal action against the developer’s bank.

To those off-plan buyers I would say, never give up.  Focus on recovering your money from the developer’s bank, the bank that received your off-plan deposit and failed in its obligations under Spanish Law.  A significant amount of Case Law is now on your side”

María de Castro, Director of Costaluz Lawyers comments:

“Finca Parcs Lawsuit 1 was a magnificent result in favour of the consumer, but it was just the start.  Over the past 3 years we have won many other cases against Banks and we look forward to another successful result in Finca Parcs Action Group Lawsuit 2”

Group Lawyer, Jaime de Castro comments:

“Over the past few years it has become clear that Spanish legislation protects off-plan house buyers with protective rules that do not exist in other European countries.  The Spanish Courts have been applying this Law strictly and categorically and I am confident this will also be the case in Finca Parcs Lawsuit 2”


FINCA PARCS ACTION GROUP – TIMELINE OF THE LEGAL ACTION – LAWSUIT 2

● 2005 to 2008 - No legally required Bank Guarantees for Off-Plan deposits totalling almost half
   a million Euros
● December 2012 – Lawsuit 2 against CAM Bank & developer Cleyton GES SL filed to the Court
● 28 October 2014 - First Instance Court Preliminary Hearing
● 28 September 2015 - Trial to be held in First Instance Court - Hellín

 

FINCA PARCS ACTION GROUP – TIMELINE OF THE LEGAL ACTION – LAWSUIT 1

● 2006 - No legally required Bank Guarantees for Off-Plan deposits totalling 1.5 million
   Euros
● February 2011 – Lawsuit 1 against CAM Bank & developer Cleyton GES SL filed to Court

● 12 January 2012 - First Instance Court Preliminary Hearing
● 21 & 22 May 2012 - Trial held in First Instance Court - Hellín

● 8 June 2012 - Judgment released in favour of Finca Parcs Action Group
● CAM Bank and Cleyton GES SL sentenced to return deposits amounting to almost 1.5  
   million Euros to the buyers with the addition of legal interest and costs
● July 2012 - CAM Bank appeals the First Instance Court Judgment
● July 2012 - Finca Parcs Action Group submits Opposition to the CAM Appeal
● July 2012 - Finca Parcs Action Group file Provisional Enforcement Order to the Court
● August 2012 – CAM Bank pays full amount of deposits plus legal interest and costs
    to the Court
● Appeal to be heard by the Albacete Appeal Court
● 4 March 2013 - Appeal Magistrates to meet for deliberation & voting on the CAM Bank Appeal
● 11 April 2013 – Appeal court dismisses the CAM Bank Appeal and confirms First Instance   
   Sentence in full and imposes costs of Appeal on CAM Bank

● 14 May 2013 - CAM Bank does NOT appeal to the Supreme Court
● 14 May 2013 - FIRST INSTANCE & APPEAL COURT SENTENCE NOW FIRM AND FINAL
● June 2013 - Court releases Principal Amount of buyers off-plan deposits amounting to almost    
   1.5 million Euros to the Finca Parcs Action Group Legal Team
● July 2014 – Court releases Interest & Costs to the Finca Parcs Action Group Legal Team
● ALL 47 BUYERS RECEIVED A FULL REFUND OF PRINCIPAL, INTEREST & COSTS



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2 Comments


john123 said:
23 September 2015 @ 17:43

Hi Keith, many thanks for sharing all that information with us. i have been asking people for this info for a couple of years but this is the first time it's been done. great to see the legal steps and equally beneficial to see the timeline. i notice the court kept the principal for about 10 months and the legal costs and interest for a further year! how did they justify this? [i doubt they got round to mentioning it, eh?]. my solicitor says that i should get my money back this month [the first instance case was heard in May this year]. BBVA have appealed [of course]. thanks again, regards, John


ads said:
03 October 2015 @ 12:45

Thank you Keith,

Do you have any updated information yet on this case, and can you please keep us all posted on the ruling, including any awarded interest and costs?

Can you also please advise/clarify if ley 57/68 makes reference to interest and costs and if this forms an integral part of this law if the Bank is subsequently found culpable for return of monies. Can your case effectively act as case law to bring greater consistency to the awarding of interest and costs?

The reason I ask is because many claimants perceive it as Bank abuse when a Bank retains monies from the outset and benefits from retention of those monies during the lengthy interim periods due to Bank appeals, when in reality the Bank made no provision to protect deposited monies in secure accounts as required by law, and the innocent claimant has not only to find the finance to defend these rights written into existing law, but also for all too many their lives have had to be "put on hold" so to speak whilst they await rightful return of their monies.

Had they been provided with legal BG and a secure account to protect their monies from the outset as required in law, they would have been able to facilitate far swifter acess to return of their monies when breach was proven.

Would these facts (legal arguments) act as sufficient evidence to present to the judiciary for the judiciary to demonstrate moral authority in their subsequent judicial rulings and award of interest and costs, which in turn would act as necessary disincentive against continuing attempts by the Banks to deny their responsibilities according to existing law?

Where applicable are these legal arguments being presented by the litigators in order to facilitate greater moral authority and act as a necessary part of the "good faith exercise" that Maria has recently highlighted?


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