Will the Supreme Court grant Consumer Law status to Law 57/68 debate?

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29 Jan 2020 11:12 by mariadecastro Star rating in Algeciras (Cadiz). 9302 posts Send private message

Legal Questions? Speak to Maria Direct

That is one of the main points under discussion at present as, depending on this, the ample concept of Consumer that Europe emanes will apply or otherwise, a restricted concept of “ buyer of first or second residency” will apply, to the lesser or bigger interest of banks and insurance companies.

Law 57/68 talks about “ buyers of first or second residency” as the concept of Consumer Law did not exist when that Law was drafted. Nevertheless, the same Supreme Court has affirmed that Consumer Law in application when interpreting Law 57/68 and therefore the current concept of Consumer, according to Europe, apply.

In simple terms a Consumer is for Europe and for our Supreme Court not a person itself but the act that the person performs. A transaction is considered a Consumer Law protected one is that is not part of the professional/commercial activity of the performer.

So, basically, a Consumer can act with profit purpose if he does it on a particular basis and not on a permanente fashion. Just ​the assiduousness​​​ converts profit in speculative



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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30 Jan 2020 00:26 by ads Star rating. 4016 posts Send private message

Maria,

This is quite difficult to understand I'm afraid.

Is there any difference between those that had purchase contracts prior to this consumer law coming into existence as opposed to those contracts that were effected after that date?

Also in terms of who might be at risk going forward....

Would it not be up to the Bank to prove that the offplan purchaser had INTENT to rent out the property or use it with any business intent or business profit motive?
How can Banks possibly prove this was intended from the outset of deposit, if the purchaser never had the opportunity to subsequently take ownership?

So who are at risk in this scenario? 
Is it those who put deposits down on touristic properties, and if they were not advised that their deposits were not deemed to be protected by Bank Guarantee law, would this be deemed a lack of due diligence by the conveyancing lawyer, or does this come back to the fact that monies would have been deposited into named developer accounts and the surveillance mechanisms supposedly in place would have subsequently required those deposits to be safeguarded and accessible and eligible for return in the event of developer insolvency, regardless?

Would those at risk also be those who bought properties in the name of a company as opposed to their own name? Again should this risk have been forewarned by the conveyancing lawyer? Would these purchasers then be classed as a corporate user and not be classed as a consumer and lose their rights? Or once again if their monies had been placed into developer accounts would the surveillance and safeguarding mechanisms as described above still apply?

Are there other instances that might be deemed to be at risk under this scenario?

Would it be possible if you could explain your last paragraph a little more, please?

Many thanks.

 


This message was last edited by ads on 30/01/2020.



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30 Jan 2020 09:20 by mariadecastro Star rating in Algeciras (Cadiz). 9302 posts Send private message

Legal Questions? Speak to Maria Direct

Answers below, Ads:

Would it not be up to the Bank to prove that the offplan purchaser had INTENT to rent out the property or use it with any business intent or business profit motive? Yes, according to the current concept of Supreme Court, it would be the bank that would need to prove that the property was bought to be sold out before completion. According to European concept of Consumer ( adopted by our Supreme Court), it would be the bank who had to prove that the purchase was part of the professional/commercial activity of the buyer. We deffend the whole Consumer Law applies and therefore the broader concept of concept by Europe( and also our Supreme Court applies here).Some judges deffend that it is not a consumer but a more restricted concept which is involved: buyers of first or second residencies.

Also Law 57/68 is to be applied if parties freely agree in that level of protection in the contract, regardless the profile they have.
How can Banks possibly prove this was intended from the outset of deposit, if the purchaser never had the opportunity to subsequently take ownership? They work through reasonable grounds: number of properties,  tourism classification, profession of the buyer, if the buyer was a company... 

So who are at risk in this scenario?  Those who bought more than one property or bought a toruistic element.
Is it those who put deposits down on touristic properties, and if they were not advised that their deposits were not deemed to be protected by Bank Guarantee law, would this be deemed a lack of due diligence by the conveyancing lawyer, ( true) or does this come back to the fact that monies would have been deposited into named developer accounts and the surveillance mechanisms supposedly in place would have subsequently required those deposits to be safeguarded and accessible and eligible for return in the event of developer insolvency, regardless?  True too. But those two situations fall into a different " discussion thread", which is the control duties of Banks-- both developers and depositers under Law 57/68 and the due diligence of Lawyers when doing off plan conveyancing.

The particular point we are discussing is specifically on if despite existing breach and lack of control by Bank, a buyer can get out of the protection because a Banl allegue throgh " reasonable grounds" that he was an investor. It is being massively used at present at every jurisdiction.

And the crucial question is: ¿ Is Law 57/68 a Consumer Law? The Supreme Court has said it is--- it cannot not be--, so, if so, Consumer concept issued by Europe and gathered by Supreme Coury Spain needs to be applied here and unless a bank prove that a transaction was made as part of the professional or commercial activity of the buyer, Law 57/68 and all his guarantees apply.

Would those at risk also be those who bought properties in the name of a company as opposed to their own name?  Yes,too. As some judges do a direct assumption that becuase the buyer is a company, the purchase was professional and not consumerist. Would these purchasers then be classed as a corporate user and not be classed as a consumer and lose their rights? They are being classed as so. Or once again if their monies had been placed into developer accounts would the surveillance and safeguarding mechanisms as described above still apply? It should.

Are there other instances that might be deemed to be at risk under this scenario? I cannot think of other ones.

Would it be possible if you could explain your last paragraph a little more, please? Yes, of course. European Consumer Law states that making profit with a property investment does not convert you in an investor/speculator. Just if you make profit through property transactions on a permanent basis ( as professional) you are an investor/speculator.



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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