22 Sep 2010 11:14 AM:
Hi Paddy22, Last Dec we received the letter below from LOS. It says that though we can list ourselves as a creditor the court may decide that because we have not completed we are in breach of contract and therefore must pay the amount owing on the flat. If we don't our assets in the UK copuld be at risk etc etc. Did you also receive this? After seeing your message I have asked LOS if the situation has now changed i.e. the court has ruled that the developer is in breach of contract but LOS will not confirm this or give us any details until we pay more fees. I would appreciate any further details you may have.
Best
Dear client,
We are writing to you in order to let you know our thoughts about the new scenario opened with regards to your purchase in El Patio de Doña Julia, following an application for voluntary judicial receivership filed by the developers Evemarina.
As we have informed you time ago, on your instructions we have tried to get the contract cancelled and recover your money either from the developers or the insurance company that issued the guarantee, on the grounds that the developers had not delivered the property on time. They both refused arguing that there is a clause in the contract that expressly rules out the possibility of cancelling the contract due to delays during the first year. We refuted that argument saying that said clause is null and void as it goes against Consumer Protection Law, but they did not change their position and they even summoned you to complete the purchase last June.
So we currently are at a stalemate which can only be resolved by a judge. We have also advised you that it was not recommendable to take the case to the courts because your chances were low, considering that it is very unlikely that a judge declares the clause null and void, and specially taking into account that the property is already finished.
We now have to add to all this the current situation with the developer, which has applied for voluntary receivership but losing the right to run the company in favour of Court appointed administrators. The fact that there is now a judge supervising all movements related to the developers’ assets, makes cancellation of the contract even more difficult.
As the developers have already been put under judicial receivership the administrators are requiring any individual or company, with a credit against the developer, to identify and prove the sum owed and inviting them to notify the Court. This is necessary in order to establish the extent of the company liabilities and decide how these debts will be repaid. This information must be submitted at the Courts before December 17th.
Considering that the contract between you and the developers is still in force (as they have not accepted our cancellation), and due to the fact that the property is finished, instead of you having a credit against them, what you have is a debit as you must pay the balance of the agreed price. And the administrator will probably summon you to complete the purchase. If you refused, the administrators could chase your assets worldwide in order to take them into liquidation and get the money to pay the developers.
So, in principle, you would not have a right to inform the administrators any credit against the developers.
However, there is another clause in the contract which states that, during the first year of delay, you are entitled to a compensation of legal interest on the amounts already paid. This implies a credit in your favour which would have to be communicated to the administrators named by the judge.
Moreover, if you wish to assert your position that the contract is already cancelled due to the illegality of the clause that would go against the Consumer Protection Law (something would have to be decided by the judge), then it would be recommendable that you notify your credit to the judge, namely the deposit already paid to the developers.
Then perhaps it would be good to communicate as credit in your favor the amounts paid so far to the company on the grounds that the contract is cancelled, and, in case this is not accepted by the administrators, you can subsidiary notify as a credit the compensation due to the delay.
Although the goal was not achieved, at least the communication could be useful as a pressure tool and to buy some time and try and get either a reduction of the price or compensation in the future.
The presentation at the Courts can be done you. You would have to go to Malaga Commercial Court before December 17th with the original contract and proof of all the payments made to the developers, apart from a letter written in Spanish where you indicate the reasons of your claim. You will then be required, if you wish to be updated on the case, to collect copies of the proceedings.
If you would like LoS dealing with the case our fees would be 1,000 € plus VAT at 16 %, including these fees an initial appeal in case the administrators did not accept your credit. This entails appealing the decision on grounds of the clause illegality, on the one side, and arguing that you are entitled to compensation according to the other clause. If despite the appeal their position did not change, then we would have to study the viability and convenience of making a new appeal to the second instance, in which case you would need to be assisted by a barrister and represented by a Court Agent, who would charge you separately.
Finally, if your intention is to complete the purchase and relinquish compensation you have according to the contract, then it is not necessary to make the presentation to the Courts.
We look forward to knowing your decision as soon as possible as the deadline is approaching.
Please let me inform you that I will be on holidays from Monday the 7th till Wednesday the 16th December. Considering this, I would be most grateful if you could please address any future communications till I am back to Mr. Flores (aflores@lawyersofspain.com) or Ms. Bermudez (isabel@lawyersofspain.com ) .
Should you have any questions, please do not hesitate to contact us.
Regards,
Javier Arboledas
Abogado / Senior Lawyer
Reg. Nº 6251 Malaga Bar Association
Community thread:
Dona Julia El Patio Completion Date
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