07 Mar 2009 6:05 PM:

Just an update to my original post.

In answer to a question I put to Pablo about  Schedule 6 of the contract ie "Agreement for the Assignment of Contractual Position", I have now received written confirmation that this part of the contract has been revised and it no longer stipulates that the price the contract can be assigned for has to be the same as the amount made as partial payment to Corvera, In fact there is no longer any ref to price on the schedule. Pablo has emailed me a revised copy. In theory this should make it easier to sell on the contract , since you could charge just £1 for it if you really wanted to end your contractual involvement and walk away...not that you would find anyone wanting to take it on, even at £1...believe me, I've tried selling my 71000 euro deposit for £1 and failed!!

Stuart99

Community thread: Corvera advise legal proceedings will be taken against purchasers failing to complete

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02 Mar 2009 9:41 PM:

Hi Trevor

That's interesting about your Spanish lawyer's view on assets. My UK solicitor has written to me saying  " you may find that they will get a judgement against you in default and that could result in you being made bankrupt ". But then he does not specialise in Spanish property law.

I'm just about to appoint a Spanish lawyer and grant POA. From my previous post you will see that  it seems Calidona have the right to persue contract fulfillment, but I now think the contract was flawed to start with and and am prepared to go to court if needs be to have it cancelled.
 

Stuart99

This message was last edited by Stuart99 on 3/4/2009.
Community thread: Corvera advise legal proceedings will be taken against purchasers failing to complete

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02 Mar 2009 9:35 PM:

Hi Cazbaz

Re your question about legal action...Item 16 on page 9 of the contract (mine anyway) says that Calidona get to keep the deposit as a penalty if the Purchaser does not complete. But it's clause 7 on page 6 that's the killer punch and carries the serious implications. If you look up on the net Article 1.454 of the Civil Code (which this clause refers to), you will see why the monies we have paid thus far have not been described anywhere as deposits or down payments. In fact, all payments made have been specifically termed 'partial payments', and therefore the protection offered to the buyer by Article 1.454 to cancel the agreement and only lose the deposit as the penalty is avoided ie...extracted from the web: "the seller then has the right to demand Contract fulfilment. If the buyer desists the seller may demand him to buy for the agreed price". Clause 7 of our contract states ..'under no circumstances shall the provisions of Article 1.454 of the Civil Code apply'. Just to make matters more difficult, under clause 6 on page 6 Calidona are entitled to interest on any due amounts that are not paid up on time. Sorry!
 
In practical terms the Calidona legal team are going to be very busy taking each individual case to court. It will literally take years, given the large number of buyers likely to default because they simply don't have access to the funds to complete anymore. Meanwhile the ownership of the properties will be in limbo and they will remain unoccupied. I would think it far more sensible for Calidona to keep the deposit as the penalty, cancel the contract and then remarket at a discount at least equivalent to the 30% to 40% deposit that they already have in their bank account. If they concentrated sales efforts in Germany for instance, buyers would get the benefit of the discounted price, are not adversly affected by the value of the euro and are able to take out a mortgage at rates much lower than we were prepared for in 2005 when we put down the deposit ...sorry, partial payment!

I know Calidona are threatening to take legal action as ploy to get those that are wavering to complete, but in practical terms this will be a costly and lengthy exercise...so Calidona spies, if you are reading this, take my stategic business advice as above...there's no charge for it!
 

Stuart99

 

This message was last edited by Stuart99 on 3/4/2009.

This message was last edited by Stuart99 on 3/4/2009.
Community thread: Corvera advise legal proceedings will be taken against purchasers failing to complete

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18 Feb 2009 1:15 PM:

Hi Trudiea

We do seem to be in a similar boat, along with many other people.

An initial deposit on the Corvera property was placed in December 2005 and I was told (verbally) that the property would be complete in 18 months. In total 70000 euros have been paid. In the intervening 3+ years my cirumstances have changed drastically and I am not able to complete. It's not that I don't want to complete, I simply cannot complete. I fully understand that contractually I am at fault here and accept that I must loose the 70000 euros as the penalty.  This is where things start to get confusing. Having read a lot of the relevant threads on this site, a lot of people seem to have been told and are subsequently relaying conflicting legal information.

My understanding is that once the Housing Unit occupation licence has been received by the developer, there is no option but to proceed with the purchase within 30 days. If this does not happen, the Vendor keeps the deposit and (as has been advised by Pablo) will at some point institute legal proceedings to recover the balance, as (seemingly) is their contractual right. This though would seem unfair since, in theory, the developer could keep the substantial deposit, recover the balance through legal action and keep the property to sell 'again'. It's interesting to note therefore, that it is your lawyer's 'view' that the large deposit paid is considered sufficient compensation...a view that I share, but one obviously not shared by Corvera!  I have also been told that the purchaser becomes responsible for all expenses, fees and local taxes attributable to the property from the date set for the execution of the public deed of sale (even if that does not actually take place because the buyer does not present him/herself) plus continuing interest on the outstanding balance.

Definitive guidance on this seems to be in short supply. Perhaps since the Spanish legal system is not based on precedent as is ours, every case is different. Difficult to know what to do other than accept that large fees will have to be paid to a Spanish lawyer to deal with the case to its conclusion, and (as I have been advised by my UK solicitor) seek insolvency advice to limit forfeiture of assets if the worst happens ie Corvera can and do recover the full balance (or substantial part thereof) contractually due to them....plus interest etc!

Ironically, in my case,  if Corvera had handed over the property within the timeframe originally given, then completion would have proceeded.

If as you fear (and are probably correct ) a significant number of people do default, then I would think that Corvera have little choice but to take legal action to get cash moving into their acounts...I would doubt that they are generating many new sales (and hence income) in this climate. And in that case would a Spanish court look more favourably on assisting a Spanish firm get the money it is contractually owed by defaulting British residents, or assist British residents in not paying a Spanish firm the money they owe? I think you're right to say the situation will change!

 

This message was last edited by Stuart99 on 2/18/2009.

This message was last edited by Stuart99 on 2/18/2009.

This message was last edited by Stuart99 on 2/18/2009.
Community thread: Corvera advise legal proceedings will be taken against purchasers failing to complete

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16 Feb 2009 12:00 AM:

On Friday 13th Feb a call was received from Pablo Buitrago (from the Corvera office) ostensibly to check that the necessary mortgage arrangements have been put in place to proceed with the purchase of the contracted property on Corvera phase 2. Apparently completion is now on target for April/May.

Pablo was told that since the contract was entered into in December 2005 our personal and financial situation has markedly changed and we are no longer in a position to proceed. Our understanding was that under clause 16 of the contract ( Non compliance on the part of the Purchaser) we could in effect breach our obligation to appear at the act of executing the public deed after having been requested to do so by the Vendor and the Vendor would keep the 70000 euro deposit paid as the penalty and that would be the end of our involvement.

Pablo advised that this is not the case. If we fail to complete he said that "the legal dept will take legal action". Having looked at the contract yet again, and cross referenced various terms with information on the internet, it seems that Corvera can indeed do this.

Even trying to assign our contract (ie sell it on) is covered ie Corvera has to approve and authorise the new buyer and the selling on price cannot be for less than the deposit paid to Corvera. I had an idea to offer the 70000 euro deposited contract for sale for a peppercorn in order to attract a buyer and so avoid further liability, but it appears this is not possible .

I know that we are not the only buyers whose circumstances have changed in the intervening three+ years (!) and cannot proceed. In effect it seems that we have three options ie proceed with the purchase (not possible), find a buyer who will proceed with the purchase in our stead (highly unlikely) or default and await legal proceedings. Any ideas on this predicament would be much appreciated!

Many thanks.

Community thread: Corvera advise legal proceedings will be taken against purchasers failing to complete

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