Contract Term for Off Plan Purchase

The contract term for completion of my off-plan property was 15 months from contract signing and their receipt of a down payment and so this expires Oct. 5, 2008.  If I wish to give the developer an extension to this time period, should I write an offical addendum to the contract saying so?    I understand that with new laws in place, forcing the developer to finish infrastructure before proceeding with building, that it has delayed building plans so I would like to have on record that I am not being unreasonable in this regard.  Another part to the story is that I currently don't have a BG and am trying my best to threaten legal action to get it.   However, if I eventually have to go to court to get this BG and/or have my contract terminated because of non-compliance, I want to make sure I have all my I's dotted and t's crossed to show that I have everything in order and that the judge, if it comes to that, won't throw me out of court for being unreasonable and so favor the developer.   Appreciate your advice and direction.  Many thanks. 

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If you wish to give an extension to the developer you are already giving one by not denouncing the delay. But if you dont have a BG I would take action fairly quickly and negotiate something. If the developer does not have liquid funds in the bank, a pretty normal scenario in these days of credit crunch, ask them to register a charge against one of the properties with more equity. This will give you a degree of protection you currently dont have although it is not a proper BG. 

If you want to cancel you can give it a try but it is not a straightforward case for many judges dont consider this as a fundamental breach of contract, especially if they can prove that they tried to get one by applying to a couple of banks and they were rejected. Judges are not consumer friendly as some put it so have proper ammo before you walk into the Court room!

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Dear Colleague A. Flores:

Good to see you in the forum. I look forward to discussions with you here. They will for sure enrich everyone at EOS. Are you here representing the opinion of Lawyers of Spain and Lawbird or just your personal proffessional opinion?

I need to start disagreeing with you on two important matters:

1.- Implicit extensions are forbidden by Consumers Law and also the Supreme Court has already stated that once the completion deadline stated in the contract arrives, any possibility of extension need to be notified and justified to Consumer ( expressly) and allowed ( also expressly) by them. That is part of essential principles of Contract Law.

2.- Jusges are passing lots of decission in favour of Consumers recently. We have got a 95% success rate in this type of cases. Always counted, that a good independent solicitor brings good legal arguments based in Consumers Law to these Jusges of course. We are being very succesful so far,

I am  very happt you are becoming to start being interested in Consumers Law now. It is a very challenging and fascinating discipline.  Much more than doing conveyancing to clients refered by Estate agents or developers as you used to do in the past. Welcome on board!

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Dear Colleage Maria,

Thanks for your supportive post and your acknowledgement that my imput will be refreshing for EOS.

My opinion I suppose will be that of my professional capacity and ethics, irrespective of who I work with or for which incidentally includes both companies.

I would definetely welcome a copy of these court rulings, there seems to be much said about them. My understanding, after reading many court rulings, is that judges will have to determine whether missed completion dates are sufficiently serious so as to be construed as a fundamental breach of contract, in particular where these delays have brought about a ´frustration of the buyer´s legitimate expectations´. 

Secondly I would have to remind you that the Code of Ethics of the Law Society specifically bans publicising success rates as well as selfpraising comments (art 7.d). I am sure you are winning cases but so are many other lawyers such as, for example, Lawbird Legal Services who as you know won a land mark case against La Reserva de Marbella (published in El Mundo Newspaper) but we refrain from encouraging, provoking or inciting clients into court action as it is also forbidden (art. 7.h)

Finally I will not take offensively your last comment :)

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I am very satisfied and happy that you know the Code of Ethics for lawyers in Spain.  We all need to read it oftenly and fight hard to avoid conflict of interests.

Have a wonderful morning.

Maria

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It is a cause for celebration to know that solicitors in Spain are taking an interest in Consumer Laws. We need to know that when things go pear-shape, our solicitor is there defending our rights. It will be very welcome to have different opinions. Saludos

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Fully agree with you Andenca. That is the point!
Maria

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Hi spanishsolicitor,

We have agreed with some developers that since they dont have the possibility to give us a BG we will only continue with the transaction if they can guarantee the downpayment with a charge against another property. We advise the client of the degree of protection this entails as opposed to an irrevocable BG, which cannot be obtained, and if he/she is happy we proceed. We have found that some developers only have 50% of the value of a property mortgaged whereas many others, especially the ones building 2 bed/2bath, go up to 70%. Of course, the costs have to be borne by the developer.

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Antonio, Spanishsolicitor:

Why cannot develpers  give to you, your clients´ Bank Guarantee? Why didn´t they give it to you when your clients paid the deposit? Were  you representing them at conveyancing since the beginning of the purchase operation? 

It is true that setting a charge on another property now  is better than nothing,  but  the optimal and legitimate position clients/consumers should be is the possession of hard copies of  fully legal Bank Guarantees duly obtained by their conveyancing solicitors.  

Out of these two years, exclusively concentrated in Consumers Law for Real Estate purchasers, we have found that the most of the Law Firms which have been dealing with conveyancing during the Real Estate boom, were mostly recommended to clients by Estate agents and developers (risking very high our proffessional obligation of avoiding conflict of interest)  

These same Law Firms did not achieve to get a  Bank Guarantees for consumers, or get ilegal and useledd ones)

 I need to say that being a witness of this panorama during the last years has been heart breaking and that  this has made such an horrendous damage to the Legal proffession in Spain.....


What do you both think of these?


Also, there is case Law which enable cancellation due to Lack of Bank Guarantees.... so...... if not cancellation, I think that , together with charges on properties, consumers deserve  good price compensations in these cases. Come on!

Best weekend,

Maria



This message was last edited by mariadecastro on 8/29/2008.

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WELL SAID MARIA!!!!! 

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 Yes well said Maria, This is what's needed.    You have a nice rest now and a lovely weekend.  

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Thanks Tish, Pat and Roy.
Fortunately I am not alone at this.
You know....  I can get even stronger if you ask me about this privately.. but i want to fully respect the friendly style of EOS.
You all have a great wekend too!!

An with all my respect to all those anomimous colleagues who silently work according to our Ethical rules.

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Well said Maria.

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Thanks Alicante Lawyer... but still.. I would love to know your name.. so our communication can be more personal, as EOS style is. Anyhow, you are the owner of your privacy!

I have always thought and said the same.... among unproffessional and unethical, embarrasing behaviours by different agents during the real estate super-boom in Spain, the one I reject the most is that of lawyers who violated the principle of independence and avoidance of conflict of interests, damaging their clients rights.  Those who massively received clients by agents or developers.... Those who now are making every effort to discredit us, alluding to ethics and deonthology. That proffessional and ethical zeal....  hum!  if they had displayed more of that when they acted as convenyancers, many of you would be in a different situation now.

I am not talking about anyone specifically. I just want to denounce a practice which  has been reported to me by dozens of you.

That is one good thing of financial crisis: they put everyone in its place and burst so many false pretences. My american mentor David Coolidge, so wise as he was, wrote once:  " Truth cannot be buried, because it will germinate and come out".  That is our sole reliance. Truth and honesty. Proffessional care for every single client. Absorbent and exhausting... but dignifying and supersatisfactory.

We are not the best, we are not famous ( and do not want to be), we simply want to humbly work effectively for the protection of people who trust us and ( at the same time) to be able to clean a little bit Spain´s name abroad and the reputation of our proffession.

Fortunately, thanks to platforms like EOS you are getting more and more legal knowledge on several aspects of life and businesses in Spain.

It is being a real challenge. I never could imagine...

Have a lovely evening

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I have  been working most of my proffesional career as a litigation lawyer in Alicante city (both civil and criminal Law- which is my speciality) and on these days I am seeing things that some colleagues have done in tourist areas and I really cannot understand. I agree with you: "proffesional care with every single client", people need proffesional care, this is the minimum we can give them. This is my principle with my private clients and with my legal aid clients. 

I will send you a private message so we you can have all my details.

Good night Maria.

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Dear Alicante Lawyer:

Thanks for your post and apologies for not responding earlier...

So you are one of those anonymous lawyers who hold the value of the proffession. So glad to have you here among us...

Please keep contributing... this is a great community open to everyone who respect the terms and conditions of EOS style.

I would be so pleased to have your contact sata so we converse... I love constructive and deep conversations with thoughtful colleagues. We should think of start forming a  community of lawyers to pursue different justice-related issues together. What do you think?

Best wishes,

Maria

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Supreme Court doctrine is now clear on this!

Good to all benefitted, deciding and fighting for this great achievement!

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