11 Jan 2020 13:40:

Ads: Your comments are fully right. 

Thread: Bank´s liability on custody of off plan funds

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31 Dec 2019 12:08:

Ads, It would be great. I have actually offered our continued updated Case Law research to all lawyers involved in this fight. As lineral professionals, this type of commun endeavours are not too frequent, at least in  Spain. Most likely to be carried out by Consumers Associations,  I will be sending some notes to the most prominent ones in the New Year.

Thread: Bank´s liability on custody of off plan funds

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31 Dec 2019 10:05:

The shorter/ easier version it was requested from you. This below is specifically on depositer´s banks.

Law 57/68: it is clear that banks had to control off-plan deposits paid to developer’s bank accounts, but when does that obligation start?
The Supreme Court has said in at least 2 Sentences that this obligation starts "once the bank realises the possibility of off-plan amounts being deposited in a developer’s account".

So is that once a developer opens a bank account different to the account linked to a developer’s mortgage?
Yes, in our opinion. That is enough for the bank to realise the possibility, as the Supreme Court has defined.

What is the Supreme Court saying about when a bank can realise that funds are for off-plan property purchases?

The Supreme Court is saying that a bank can realise that the funds are for off-plan property purchases when the property details and buyers names are identified in the bank transfer and when the money is paid to the developer’s bank account stated in the purchase contract.

Was that established by Law?
No, that is not part of Law 57/68.

Was it clearly warned in the contracts?
No, it was not either.

So how can the Supreme Court make those requirements a requisite for the protection to be provided to the buyers?
It should not.  That is against Law 57/68 and its protective nature, Consumers Law and Contract Law.

Does the Bank need to prove what it did to meet this duty?
The Supreme Court has affirmed that the burden of proof of active surveillance is that of the bank as it is the bank that must prove the measures taken in order to protect the amounts deposited into the developer’s accounts opened in its branches

Should the bank monitor amounts received by property developers for other reasons?
Yes, the Money Laundering act of 1993 established that financial entities are obliged to control the amounts they receive from both property developers and estate agencies, as well as amounts from abroad, in order to know who was behind each operation.

 

 

 

 

This message was last edited by mariadecastro on 31/12/2019.
Thread: Bank´s liability on custody of off plan funds

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31 Dec 2019 10:04:

Sandra:

I would ned to see all related documents and offer to you my opinion on the suing of lawyers.

Ads: In regards to:

As monies have already been presented to a developer account, would the conveyancing lawyer be considered exempted from liability having requested and been denied BG with accompanying account details, I would say it would-- as liabililties of General Guarantoor and Depositer bank work in that situation-- but it can still be deffended that money should have not been entered the developers´account before the lawyer receiving the inidividual policy of guarantee/ insurance contract would the developer Bank then remain liable in the event of proven developer breach and developer insolvency? Or would both conveyancing lawyer and  developer Bank be severally liable? An action for several liability is possible.

As Law 57/68 make depositer bank legally liable of this custody, our strategy has always been to act against them,  but, it is true that there are associated costs which are not covered by this Bank´s/ Insurer´s liability and therefore-- litigation costs, poa, travelling, plus all moral damages described by Kavanagh, and an action against Lawyer is possible then.

would this then exempt the Guarantor Bank of liability if a General Guarantee existed and the conveyancing lawyer had made reference to this Guarantor Bank in the contract ( without any account reference), and without any cross reference to purchaser and property in the cheque made payable to the developer? No, Guarantoors are always liable, they have, by Law, the possibility of controlling both developer´s accounts and guarantees and therefore always liable once it is proven money entered a developer´s account ( Supreme Court has recently rectify its interpretation of this) Would this then leave the purchaser, in the event of proven developer breach, and having been denied guarantee and secure account information, without any possibility of making either the Bank or conveyancing lawyer liable???? No, if General Guarantee is known or is possible to obtain through Preliminary Diligences. Doesn't this then act as proof why the latest SC ruling fails to protect the purchaser and respect their inalienable right under Ley57/68, given the Guarantor Bank has responsibility for all due surveillance and administrative duties associated with developer accounts from the outset? Both Guarantoor and Depositers have those surveillance duties.

Kavanagh: In my opinon, despite the fight is still on. Justice is being made as a general rule: still corners to be conquered.

Thread: Bank´s liability on custody of off plan funds

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30 Dec 2019 19:21:

Kavanagh:

You are right, Kavanagh. Lawyers are also liable if they allowed money into developer´s account with no certificate of guarantee.

Thread: Bank´s liability on custody of off plan funds

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