PEOPLE WHO have lost money buying a property off-plan in Spain – because the developer is insolvent, has disappeared or has not handed over the property – you should know that apart from the money lost, can claim against the banks involved for interest.
The banks are also responsible for the interest; which could sometimes represent approximately 50% of the money paid for the property.
Laws 57/68 and the LOE establish the banks must give a guarantee to off-plan buyers, covering the money paid to the developer plus legal interest from the moment when each payment is made and until their return.
This could mean, for example, that if 50,000 Euros was paid on 01/01/2006 a claim for interest accrued up to 01/01/2017 would be 22,684.93 Euros.
For this reason, banks increasingly focus their arguments in court cases – like the ones we have against them for our clients – on the fact that the interest must begin to not from payment, but from the time when a claim is made. They say that only at that time is a bank is aware about the existence of a problem and the need for repayment.
But, we believe that such allegations from banking entities should not be accepted by courts; for the following reasons:
- The law states: The interest that banks must pay in light of Law 57/68 and Law 38/1999 (LOE), could not be other than the legal interest of the money of the amount paid from when the payment is made until is paid back. These laws foresee the legal obligation to repay, in the event of non-completion of the works, the amounts delivered by the customer plus legal interest from when each of the payments is made. Since the liability of the banks has its base in these regulations, the moment where the interest must begin to count should be as indicated.
- In addition, it has been established by the jurisprudence (court precedents), including numerous judgments granted in favour of our clients, and even and repeatedly by the Supreme Court itself, in judgments including case numbers 733/2015, 142/2016, 174/2016, 527/2016.
Therefore, and because of the importance that the interest has in a claim, it is crucial to insure when claiming for refund of the money lost in the purchase of a property in Spain, it includes correct and properly justified the interest, because the amounts can be very high.
If you have lost money buying a property in Spain, you can claim against the bank held the developer’s account where you paid not only the money lost but also the interest. If you want to know how much you can claim and your rights, we claim on your behalf no win no fee, contact us and we will help you.
The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.
Carlos Baos (Lawyer)
White & Baos
Tel:+34 966 426 185
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