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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.

PRESS RELEASE - PAYMENT OF FULL AMOUNT BY CAM BANK
10 August 2012 @ 17:04

PRESS / MEDIA RELEASE - FOR IMMEDIATE RELEASE – 10 AUGUST 2012

 

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

LEGAL PROCESS FORCES CAM BANK TO REFUND OFF-PLAN DEPOSITS

 

CAM BANK PAYS FULL AMOUNT OF THE BUYERS DEPOSITS PLUS LEGAL INTEREST AND COSTS TO THE COURT FOLLOWING THE FILING OF A PROVISIONAL ENFORCEMENT ORDER BY FINCA PARCS ACTION GROUP


FINCA PARCS ACTION GROUP – TIMELINE OF THE LEGAL ACTION

  2006 - No legally required Bank Guarantees for Off-Plan deposits totalling 1.5 million
    Euros
  February 2011 - Lawsuit 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 – decision expected within 1 year

PROVISIONAL ENFORCEMENT ORDER

 

Following the Finca Parcs trial in May of this year Spanish property developer Cleyton GES SL and CAM Bank (now SabadellCAM) were convicted jointly and severally by the First Instance Court to repay in full the off-plan deposits paid by members of the Finca Parcs Action Group plus interest and costs.  Cleyton GES SL did not appeal the First Instance Court Judgment; however neither defendant paid the funds to the Court within the time limit set by the Judgment.  Therefore the Finca Parcs Action Group filed a Provisional Enforcement Order with the Court which resulted in CAM paying the full value of the deposits plus the amount tentatively set for interest and costs to the Court.

Keith Rule coordinator of the Finca Parcs Action Group comments:

“We continue to make progress in this case and it shows that the Provisional Enforcement Order can work in a timely and efficient manner if you are enforcing a judgment against a solvent entity.  Our case differs to other similar cases due to the fact that we also included the Bank in our Lawsuit.  We filed our Provisional Enforcement Order with the Court on 18 July, it was admitted and enforced by the Court against both defendants on 19 July and on 1 August CAM paid the full amount to the Court.  In due course the Court will transfer the funds to our Lawyers client account and we will have ‘interim’ possession of our funds pending the result of the Appeal”.

OPPOSITION TO THE CAM BANK APPEAL

Finca Parcs Action Group filed their Opposition to the CAM Bank Appeal on time and the Appeal will now be heard by the Albacete Appeal Court.

Keith explains, “The Appeal is not a physical hearing so we will not be called to appear in person again.  Three magistrates in the Albacete Appeal Court will preside over the Appeal reviewing all the evidence and the first instance Judgment.  Based on the timescales of other appeals in the Albacete jurisdiction, we expect the appeal decision to be released within one year”.

Jaime de Castro, Lawyer for the Finca Parcs Action Group comments, “After reviewing the Banco CAM appeal and submitting our Opposition to that Appeal, I feel confident of a successful outcome in this case given the strength of the First Instance Judgment against CAM and the available Case Law relating to Banks liabilities and obligations according to Spanish Law, LEY 57/1968”

 

Maria de Castro, Director of Costa Luz Lawyers, one of the two legal teams that have been working on this and other similar cases over the past few years adds, "The success of this appeal will enhance confidence in our judicial and banking systems abroad which have been severely weakened during these years of crisis.  We are confident that the precise interpretation of LEY 57/1968 by the courts will help to encourage future real estate investment by ensuring that these abuses do not occur again"


Despite its actions being described by the First Instance Judge as ‘banking malpractice’ CAM Bank continues to maintain that it is not responsible for the situation and that all irregular actions and illegalities were committed only by the developer.

APPEAL DECISION EAGERLY AWAITED BY OTHER OFF-PLAN VICTIMS

Other buyers of off-plan property who were not issued with the legally required bank guarantees will be awaiting the outcome of this appeal with interest as an Appeal Court decision can be used as a Case Law precedent in other similar cases.

Keith says;     “During the past few years buyers without Bank Guarantees were advised to take legal action only against the developer.  They win the case, but enforcing the judgment proves very difficult as on most occasions the developers have asset stripped, gone missing, declared bankruptcy or entered Administration.

For buyers in that situation it is important their cases are now reviewed by their legal teams to see if they have the necessary evidence required to file a Lawsuit against either the Bank who knowingly accepted the off-plan deposit and failed in its legal obligation to issue or verify the existence of the corresponding Bank Guarantee or against a Bank who may have issued a Generic or Collective Bank Guarantee to the developer”.

 

LICENCE TO BUILD AT LAS HIGUERICAS, FINCA PARCS EXPIRES

The Ayuntamiento de Hellín (Hellín Town Hall) has issued a Resolución de la Adjudicación
del Programa de Actuación Urbanizadora en el sector de Las Higuericas.

The result of this is that Finca Parcs developer Cleyton GES SL has had the contract for the licence to build the Las Higuericas Finca Parcs development cancelled after they failed to complete the urbanisation within the time limit set according to the Contract signed with the Town Hall.

The Town Hall has now claimed the funds under the security bond that was given by Cleyton GES SL at the time of signing the contract
.

Cleyton GES SL abandoned the Las Higuericas Finca Parcs project in May 2009 completing only 10% of the planned 617 detached villas and none of the properties were granted a First Occupation Licence.

CAM Bank (SabadellCAM) as the single largest creditor now owns the properties that were constructed but they or any other developer or promoter cannot continue with the Urbanisation without first submitting a new draft plan to the Town Hall and requesting a new licence.

HUGE FOREST FIRE ALMOST DESTROYS LAS HIGUERICAS, FINCA PARCS

In July a huge forest fire burned out of control for 2 days in the mountains of the Sierra de los Donceles.  The fire came very close to the Las Higuericas Finca Parcs site and although the infrastructure was not affected, much of the forest area at the back of the site was destroyed.



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