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15 Oct 2009 00:00 by Deeleys Star rating. 17 posts Send private message

Hi I am new on here and would like some advice please. 

3 years ago, my wife and I put a 19,000 Euros deposit on an 89,000 new apartment in a village just north of Almunecar, Cost Tropical.  About 18 months ago the apartment was finished but work stopped on the other blocks and the pool area due to lack of funds.  The developer could not get the habitation licence either for the completed block. 

Another person purchased the development but also had no money to finish it.  I have recently found out that there was no bankers guarantee although my solicitor said there was one.  My solicitor also said that they had evidence that the new buyer was transferring assets to other companies to make the original company bankrupt so he could get rid of debts and not have to honour the original deposits.  The solicitor tried to make this accusation to the developer but he has now disappeared. 

Meanwhile the bank has hired a third party company to sort out the mess.  They said that they will not honour the deposit but we can still purchase the apartment for the price of the mortgage only (which would give future capital gains issues).  They also said we would have to purchase without a habitation licence and without the gardens or pool being completed.  They also said the new owner would sign the deeds or his representative at the notary (although he has disappeared).

I have also recently paid the solicitor another 2000 Euros to start court proceedings against the developer.

Should I walk away now and forget the whole thing loosing the 19000 Euros or should I pursue this person for fraud and a refund? 

Apparantly this person has nothing in his name although he owns the company.  The company is not in administration but apparantly according to recent released figures, they are very close to it.  We know there are about 4 other companies involved, which I know at least one has gone bankrupt.

Any advice would be much appreciated.

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15 Oct 2009 16:31 by EOS Team Star rating in In Spain of course!. 4017 posts Send private message

EOS Team´s avatar

Hi Deeleys

What a mess...although if it's any consolation you are not alone.

I think you really are in a very difficult position here.

Can you tell me the name of the development and the developer to see if we have any other info about this?




Schools in Spain Guide | The Expat Files | Learn Spanish | Earn a living in Spain

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15 Oct 2009 19:05 by Deeleys Star rating. 17 posts Send private message

Hi Justin

The developer is Medina ger SL and the development is Pueblo Mediterraneo in Itrabo, Granada.



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15 Oct 2009 19:36 by EOS Team Star rating in In Spain of course!. 4017 posts Send private message

EOS Team´s avatar

Unfortunately those details don't mean anything to me.

We do know someone is a very similar situation also buying on a development in Granada area and also no bank guarantee even though the lawyer told them it was in place.

They spoke to a lawyer recently and found their only option is to start legal proceedings which would also put them on the creditors list which is important in case the developer does go into administration.

I don't think there are any other options, unless Maria, the lawyer who posts on here, has some other suggestions.

Best of luck with it.



Schools in Spain Guide | The Expat Files | Learn Spanish | Earn a living in Spain

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15 Oct 2009 21:25 by mariadecastro Star rating in Algeciras (Cadiz). 9336 posts Send private message

Legal Questions? Speak to Maria Direct

That´s it Justin.


Maria L. de Castro, JD, MA



El blog de Maria

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18 Oct 2009 09:31 by mariposa07 Star rating. 82 posts Send private message

Hi there,

I'm very sorry to hear of your situation, unfortunately there seems to be a lot of cases similar to yours. 

We moved into our house 2 years ago, after completing minus the habitation licence which our solicitor told us had been applied for.  So we assumed it was simply a formality, however 18months later when, still on builder's supply for water & electric, the water was cut off and then we received a bill via our Administrator (kindly faxed through by the builder) for 32,000e for electricity, we all started to panic!

After much expense and running around I was able to negotiate with the council, Iberdrola & the waterboard and have the site finished to the required standard and get the habitation licence for the 38 owners on our urbanisation.  Our builder is still trading and looking to sell the remaining 14 properties and telling potential buyers that the properties have their habitation licence which is a lie, without one the utilities companies can and do refuse to supply you! 

So I would be very careful if you do proceed with the purchase, I would certainly ask the planning department at the council what work is outstanding on the flats before they would grant the certificate, because this may lead to even greater costs in the future for owners!  What use is a property without utilities?

Good luck.


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18 Oct 2009 14:38 by Deeleys Star rating. 17 posts Send private message


Thanks for that Mariposa07.  We have decided not to purchase until the habitation licence is in place and the gardens are finished.  As you said, it would only be a matter of time before the utilities are cut off and a large bill appears.  The residents would end up having to finish the gardens also.  At the moment I believe the licence is tied to having all blocks completed, which some are just shells and two haven't been started yet.  They are trying to get it tied to each block seperately, so they can raise funds from each one to finish the next one.


I was wondering whether anyone could answer these questions.

If it is law to have a bankers guarantee, why would the bank lend money to the developer to build, without one?

Could the bank just say there wasn't  a bankers guarantee when there really is due to wanting to still sell the apartments?  They have told us things before about the mortgage that wasn't true.

How can the bank put all the apartments back up for sale when they have not repossed them and they are still owned by the developer, which we still have an original contract with?


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18 Oct 2009 15:16 by mariposa07 Star rating. 82 posts Send private message

Hi Deeleys,

just to let you know that as far as I'm aware it is the law for developers to give buyers a bank guarantee, but many don't and the law doesn't seem to be inforced.

However, a guarantee is held by the local council, when builders apply for a licence the conditions are that they must pay a proportion to the council, I believe this take the form of a bank guarantee.  Should the builder not finish the build or go bust the council can legally ask to execute the gurantee to finish the build. 

It's certainly worth a conversation with the planning dept of your council.



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