BANK GUARANTEES PETITION - LEY 57/68

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13 Dec 2010 22:17 by ads Star rating. 3349 posts Send private message

Rose green,

Well done!

Did you have a Bank Guarantee? Did you have to fight an appeal? Who was your lawyer? Was this a case won against the Bank or developer?

Sorry for all the questions!

 



This message was last edited by ads on 13/12/2010.



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14 Dec 2010 07:56 by mariadecastro Star rating in Algeciras (Cadiz). 9062 posts Send private message

Legal Questions? Speak to Maria Direct

 Rosegreen: Congratulations! Great before Christmas!



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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14 Dec 2010 12:05 by rosegreen Star rating. 52 posts Send private message

Maria and Ads,

Thank you very much for your good wishes.

Ads - we had a bank guarantee which they said was out of date. Our lawyer terminated our contract but the bank refused to honour the guarantee.  We went to cort in Malaga and the judge found in our favour however the bank still did not pay.. Then we were told that the judge was corrupt and was put in jail so our case would have to go to court again. In september 2009 the new judge found in our favour.  However the bank still did not pay so we went to the Banc de Espana.  In September this year the court enforced the banc de Espana.  The money was the nput in the court about two weeks and sent to our lawyer this week/  We were told that the Court No4 in Malaga was one of the most corrupt in Spain and that there was a backlog of work.

Our bank was the bank of Galicia. Our solicitors were the company introduced to us by the developers. We were worried but the solicitors did the business in the end.  They are based in Puerto Banus, The developerss were the now defunct Mac Anthony,

Our solicitors always said that we would get our deposit back but because of the connection between them and the developer we were very worried.

rosegreen 

 

 

 

 

 

es





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14 Dec 2010 12:31 by ads Star rating. 3349 posts Send private message

Rosegreen,

Thank you so much for that.

It is much appreciated that you have taken time to feed back this information which will no doubt be of benefit to many who have BG's.

The detail relating to Court No 4 in Malaga is of significance.

 



This message was last edited by ads on 14/12/2010.



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15 Dec 2010 14:13 by ads Star rating. 3349 posts Send private message

Just lifting a posting from another thread for all those interested (or maybe confused) by the Bank Guarantee scenario that has impacted so drastically on all too many offplan purchasers. I hope I'm forgiven for repeating it here but I considered it relevant to this thread also.

I suspect that many purchasers who completed on developments where developers were in breach of contract, were  either under pressure from lawyers/agents who were not independent from the developer, or they had been given wrong information regarding their legal rights for breach of contract, and felt that they had little option but to complete.

Most likely, many lawyers who had not ensured that Bank Guarantees were in place, were in fear of repercussions if the purchaser found out that the contractual agreement for provision of the BG lay with the Banks and that they (the lawyers) had not ensured that this provision was in place (as per the contract) prior to signing the contract, nor had they ensured that purchasers deposited monies had been placed into secure special Bank accounts as per the Law 57/68. These are the laws, which Maria and others are now using to challenge the Banks, to ensure Banks are made accountable for offplan deposits. 

All the more reason for us now to push for correction to the system, to ensure that purchasers know their rights and the Banks obligations with regard to offplan purchase, to ensure that legal professionals no longer remain in ignorant bliss (if this is the case), to ensure that purchasers no longer should deal with lawyers who are not independent of developers, and thereby gain transparency throughout the real estate industry which should benefit all good professionals in the longer term, and likewise ensure accountability by all those responsible for their actions.

In some cases I suspect lawyers who fell foul of this have endeavoured to put good their ignorance/mistakes by following through with breach of contract cases. Yes, some may argue that this lined their pockets, but the reality is that what should have been a straight forward case of claiming return of monies against Bank Guarantee for those who had suffered breach of contract by the developer, instead found themselves without a BG necessary to effect speedy return of their monies (all of which was illegal I might add as according to Maria the Banks were entrusted to protect purchasers’ deposited monies relating to offplan purchase from the outset).

And here is where the abuse continued. Many of those who chose not to complete on substandard properties or other forms of breach of contract, without BG's in place, then followed through the procedure for breach of contract against the developer (under advice from their lawyers) and had to face not only a costly route for justice, but also to add to their sense of injustice and horror, the existing Spanish justice system failed them, so they endured lengthy procedures, with little guarantees of return of monies due to major administrative delays, and in some cases inconsistent judgements.

And the end result? Developers then abused the system further to ensure that they placed appeals knowing more delays would ensue, and what did many developers do in the interim? Yes they asset stripped while the delays grew and grew, and thereafter lived in the hope that many could not afford to continue their fight for their legitimate return of monies as per their cases for breach of contract, that ironically by this stage had been proven via court judgements in the purchasers favour. In the interim once cases had been won for breach of contract, the lawyers placed preliminary embargoes to ensure return of monies as per the successful judgements (frequently this included costs and interest in the purchasers favour). BUT,  the legal system failed them YET AGAIN, as the delays then resulted in embargoes being ineffective (no liquid assets left to embargo) or the developer went into administration before the embargo was able to be implemented . All, I might add, because of failures within the legal administration system.

As for those who find themselves in the unenviable position of their developer going into administration, who gets first call on any assets?…….yes, you’ve guessed it…… the Banks, who were the perpetrators in the first place. And then the procedure becomes even lengthier (and more costly) as  alternative routes are explored......... what a nonsense and how WRONG!

But to add to purchaser's woes (as if that wasn't enough) suggestions are now being made to do deals with the very Banks who were wrong in the first place. The same Banks that placed them at risk from the outset. More nonsense. WE HAVE TO MAKE THE BANKS ACCOUNTABLE.

The failure of the justice administration system in my eyes is the major cause for concern here, as without these delays, legitimate successful cases for breach of contract would have been resolved (at appeal), interim embargoes would have been effected (monies placed into court accounts as per successful legal judgements) thus making the developer accountable for their breach of contract. BUT THE BOTTOM LINE IS THAT NONE OF THIS WOULD HAVE BEEN NECESSARY, had the Bank Guarantee been made available and the monies placed into special accounts as per the Law 57/68 as purchaser's contracts stipulated from the outset. 

So where does this leave us?

WE HAVE TO MAKE THE BANKS ACCOUNTABLE.

All need to sign and provide evidence to Keith’s petition www.bankguaranteesinspain.com

The evidence thereafter should ultimately identify all monies owed to purchasers “stuck” within the system and identify abusive timescales that have compromised purchasers for rightful return of monies.

It should identify the numbers of purchasers awaiting return of monies.

 And as Keith has rightly and expressly identified we need the following to happen:

1). Any purchaser not provided with the legally required Bank Guarantee is refunded immediately in accordance with LEY 57/68.

2) Any purchaser in possession of a Bank Guarantee, where the developer has clearly defaulted on the contract, is able to execute the Bank Guarantee, in accordance with Ley 57/68 without need for litigation.

3). Fast track courts be established.

4). The Spanish government and Banco de Espana must immediately set up a fund to underwrite the refunds on all Bank Guarantee cases.

5) The Spanish Government and Banco de Espana must act now to ensure the abuse being suffered by innocent off-plan purchasers in Spain is ended immediately and that it is never allowed to happen again.

If the Banco de Espana and Spanish government fail to act within defined timescales on the above issues, then, armed with evidence, we ask the European Parliament and European Commission to take firm and effective action demanding that these very serious financial illegalities are addressed as a matter of extreme urgency.

Keith needs your evidence. Please make it available via his petition www.bankguaranteesinspain.com .

Keith can’t say it any clearer than that…





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11 Feb 2011 14:39 by ads Star rating. 3349 posts Send private message

Hi Maria and Keith

Please can you clarify some important points relating to those off plan purchasers who have not been given a BG, nor have their original conveyancing lawyers specified the details of the Bank and Account where deposited monies were to be placed within the contract.

How does the BG petition allow for the case where the originating conveyancing lawyer and/or developer refuses to provide the information re the relevant Bank where monies were placed? Should there be mention within the petition of this scenario and the legal options available to the purchaser given this obstructive behaviour?

If this occurs and they are called before a judge to identify these details but they continue to refuse or be obstructive, what happens then? Presumably the ability to place a claim against the Bank then fails at this point?

How does the law stand on this scenario? Can the law firm be struck off if they fail to provide this detail? Can the law firm be made to repay the monies as per the successful first instance judgement if the developer is declared insolvent or goes into administation (i.e. if they have no assets)? What if the law firm's legal indemnity only covers for a limited amount (10k euros as Norman has implied in another thread). Will they be made to pay the remainder outstanding? How can they be made accountable for this act of double negligency if the developer is no longer in a position to pay  as per the first instance judgement and the Bank information has not been made available?

 Also I have another question.

I have just listened to Maria's podcast where she suggested that any embargo placed against a developer, once a case had been won for breach of contract, may be in vein as the Bank who funded the development will take preference for return of monies ahead of any purchaser, therefore the suggestion was to place a claim against the Bank concerned. Now, supposing that the Bank where monies were originally deposited,is a different bank to the bank funding the development, what happens then? Which bank would be made responsible?



This message was last edited by ads on 11/02/2011.



This message was last edited by ads on 11/02/2011.



This message was last edited by ads on 11/02/2011.



This message was last edited by ads on 12/02/2011.



This message was last edited by ads on 12/02/2011.



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14 Feb 2011 12:46 by ads Star rating. 3349 posts Send private message

Hi Maria and Keith,

I'd be really grateful if you could respond to some outstanding queries posted below on 11th Feb.

Many thanks in anticipation!





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14 Feb 2011 13:20 by normansands Star rating in Kent. 1281 posts Send private message

Dear All,

on reflection I can endorse Ads' view just how significant the bank guarantee actually was at the sales pitch.

the due diligence was................developer's experience...........endorsed by the lawyer..................lawyer...............long established firm...............and finally the clincher...................absolute bank guarantee on your funds...........again endorsed by the lawyer.

it really was the clincher that made it all a safe "investment".

a sickening fraud.

Regards

Norman



_______________________
N. Sands



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14 Feb 2011 13:42 by normansands Star rating in Kent. 1281 posts Send private message

Dear All,

just read Faro's reply to Ads which was as expected.

also would like to endorse Faro's reminder concerning agents.

The Casares del Sol site was examined by me pre-build and I approved the location.

On site of the finished article it bore no relation to the agent's description and was immediately rejected.

Later enquiry on the site's forum revealed that the developer had used a number of agents who it was rumoured had been actually selling properties/allocations between themselves with increased prices each time from different brochures.

It did not seem that Interlaken the actual contractor/builder had any control of the agent's activities.

It seemed that there was never any intention of building a comprehensive secure holiday complex, Interlaken had neither the land nor the planning consent to build such a thing.

It was a complete conspiracy of fraud, probably with the agents and the lawyers as the major culprits.

Regards

Norman



_______________________
N. Sands



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14 Feb 2011 18:13 by mariadecastro Star rating in Algeciras (Cadiz). 9062 posts Send private message

Legal Questions? Speak to Maria Direct

 ads: always first against the bank where money was placed. 



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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14 Feb 2011 18:33 by ads Star rating. 3349 posts Send private message

thanks Maria,

and if the banking information had been impossible to identify, what then? an action against the law firm?

and if a law firm had been negligent and their legal indemnity had limits, would the law firm be accountable for the full amount as per the successful first instance judgement against the developer?





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14 Feb 2011 19:28 by mariadecastro Star rating in Algeciras (Cadiz). 9062 posts Send private message

Legal Questions? Speak to Maria Direct

I cannot see this information being impossible to identify unless the payment was made in cash.




_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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14 Feb 2011 19:36 by ads Star rating. 3349 posts Send private message

14 Feb 2011 20:31 by normansands Star rating in Kent. 1281 posts Send private message

Dear All,

this rather sounds like a reluctance to blame the true criminals, those that perhaps thoughtlessly FACILITATED THE WHOLE AND EVRY SINGLE OF THESE CRIMES.

regards

Norman



_______________________
N. Sands



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14 Feb 2011 23:52 by Suzie Star rating in England. 121 posts Send private message

Quote Ads:

'I have just listened to Maria's podcast where she suggested that any embargo placed against a developer, once a case had been won for breach of contract, may be in vein as the Bank who funded the development will take preference for return of monies ahead of any purchaser, therefore the suggestion was to place a claim against the Bank concerned...'

This doesn't make sense to me. If the courts are now being expected to honour said claims against banks, why are banks able to lawfully have preference over embargoes - activated by these same courts. If the Ruling is that the banks are liable and responsible why has this not been clarified in the many cases already 'won' by claimants (re: 'illegal' properties that had the banks' backing)? It can't work both ways.

Ads: Regarding embargoes, your lawyer should ensure from the outset that you have enough of them to adequately cover your claim, interest & legal fees. 





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15 Feb 2011 00:40 by ads Star rating. 3349 posts Send private message

Suzie thanks,

What I am confused by is how you identify the link between where deposited monies were eventually placed and that same bank being aware that it was linked to an offplan development (and thereby be accountable)? For instance, Mrs A's legal firm send the monies from the client account to developer B in the form of a cheque. For the sake of argument, that cheque may be paid into any bank account. So how can that Bank that took receipt of that cheque possibly know that this is linked to an offplan development and be made accountable? Am I missing something here?

 



This message was last edited by ads on 15/02/2011.



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15 Feb 2011 10:00 by Keith110 Star rating in the UK and I am lead.... 686 posts Send private message

Ads

In Mrs A's case:

If her legal firm forwarded her deposit payment by cheque to the developer, then it is true the developer could go to any bank in which they held an account and deposit the cheque.  If that bank which they chose to deposit the cheque was not linked to the development/developer in anyway - i.e. never provided any finance for the development, never provided construction mortgages, never issued any other Bank Guarantees and never knowingly received any other off-plan deposits from purchasers - then it will be very difficult to establish a case against that Bank as they may never have known from whom and for what that cheque was really for.

So we go back to Mrs A's legal firm.  They have accepted Mrs A's off-plan deposit in good faith and are holding it in their 'client account'.  They can only release those client funds to the developer when they have approved the contract according to LEY 57/68 and established that the account to which they are forwarding the funds is a Cuenta Especial in accordance with LEY 57/68.

If the legal firm has no conflict of interest and are acting in Mrs A's best interest, once they have established the above facts then they would forward Mrs A's funds by Bank Transfer to the Cuenta Especial as detailed in the contract.  Bank Transfer is by far the safest and most responsible way for the legal firm to forward Mrs A's deposit to the developer.  The responsibilty for those funds can then be linked to the Bank.

If for some reason (?) Mrs A's legal firm decides to pay her off-plan deposit to the developer by Cheque then if the legal firm are acting in Mrs A's best interest and in accordance with LEY 57/68 they would go to a local branch of the developers bank and pay the cheque themselves into the Cuenta Especial as detailed in the contract.  They would provide a reference such as Mrs A Plot 999 Sunny Development.  They would then obtain a stamped receipt from the bank.

But....if Mrs A's legal firm has a conflict of interest, some misplaced trust in the developer or is being negligent they may just send Mrs A's deposit by cheque to the developer with no control over which account in which the developer may deposit it.  This would be highly negligent because the developer could even endorse the back of the cheque and hand it to a third party for encashment.  Therefore, it would be impossible to ever start a case against any bank.

If the legal firm has not acted in Mrs A's best interest at all times and are unable to provide evidence to show that they paid Mrs A's deposit into the Cuenta Especial as detailed in the contract then Mrs A's legal firm must be guilty of negligence.  They know the requirements of LEY 57/68 but like so many others have chosen to ignore them.

Kind regards

Keith



_______________________

LEY 57/1968
CLICK HERE FOR THE BANK GUARANTEES IN SPAIN WEBSITE

       
      

fpag@btinternet.com




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15 Feb 2011 10:13 by ads Star rating. 3349 posts Send private message

Thanks so much Keith. I sadly suspect that many may be in this position regarding a cheque payment, especially where there were no written details in the contract relating to the cuenta especial .

Presumably you first have to give the law firm the opportunity to demonstrate how they handled the cheque and where it was placed, but if they fail to do so, or cannot prove that it ultimately went into a bank account linked to the developer/development , then as you say there would be little point in progressing with a claim against the bank. 

In this instance we have to know what options we have at our disposal, re the position of negligence. So I need to ask my question to Maria once again. In any negligence case will the legal firm have to meet all the costs relating to the successful first instance judgement (even if they are only partially covered for the amount within their legal indemnity insurance), or will the ultimate outcome be that the purchaser will lose their monies?

Sorry to push the point but this is critical to many who find that the law firm have compromised them through their lack of due diligence and negligence.

Also given all the above, this makes it even more critical that the judgement passed against any developer who has been proven to have breached their contract is progressed in a reasonable timeframe, so that the innocent and successful client can regain their monies as per the first instance judgement.. If not then the rule of law has been compromised not only by the legal profession in the first instance but also by the state! How do you see this instance panning out Keith?



This message was last edited by ads on 15/02/2011.



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16 Feb 2011 13:15 by ads Star rating. 3349 posts Send private message

Maria

Following on from what Keith has just clarified I would be very grateful if you could answer the following question.

In any negligence case against the legal firm who did not ensure that clients' monies were placed into an account that was linked in any way to the developer / development, will the legal firm have to meet all the costs relating to the successful first instance judgement (even if they are only partially covered for the amount within their legal indemnity insurance), or will the ultimate outcome be that the purchaser will lose all their deposited monies?





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17 Feb 2011 00:05 by normansands Star rating in Kent. 1281 posts Send private message

Dear All,

I was hoping to see full details of this success................

Rose green,

Well done!

Did you have a Bank Guarantee? Did you have to fight an appeal? Who was your lawyer? Was this a case won against the Bank or developer?

Sorry for all the questions!

can this be saved to the database and be part of the "blueprint"?

Regards

Norman



_______________________
N. Sands



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