Investors. Purchase of multiple properties off plan. Can the money lost be recovered? Law 57/1968

WE have received a number of enquiries from clients (many of them expatriates) who purchased real estate properties in Spain off plan and who lost all of their money because the developer never built them.

As we have stated in a number of previous articles, these buyers can recover their money and deposits paid either from the developer, or from the bank that guaranteed the money or which granted a bank guarantee in respect of the build.

They could also recover their money from the bank, if there was no bank guarantee in place, if the bank received the money from the purchasers, without asking the developer to guarantee these amounts, as required by law 57/68, through bank guarantee or insurance policy.

Investors Exclusion of the application of law 57/68

One of the excuses most used by banks in Spain, (noted in the latest case law of the Supreme Court), is that certain buyers who lost their money are not protected by law 57/1968, because they are speculators, real estate investors, or acquired the properties for commercial purposes, etc.

In this regard, we should point out:

  1. The protection of Law 57/1968 is very broad, as it states in Article 1, “the purchase of property intended for home or family residence, must be subject to guarantee if it is to be used on a permanent basis or as a seasonal residence, accidental or circumstantial…” Therefore, even if it is a property that is going to be used sporadically, the buyer is protected by this law.
  2. – Agreement between the parties and what was agreed in the contract.

As stated in the judgment of the Supreme Court, dated 1/6/2016 number 360/2016, even if it was a sale excluded from law 57/68, because the buyer was a real estate investment company, and its objective was eventual resale of the property, nothing would prevent the parties from agreeing and making applicable to the sale the protection of the law and in such a case they should be able to require the bank to return the money.

Therefore, if you or a company that you represent purchased a property and lost the money, but in the contract with the developer it was agreed that your money would be guaranteed by a bank, then the bank could be responsible for returning the lost money to you, in certain circumstances which would require study of the specific case involved.

3.-Purchase of several properties.

It is generally accepted that banks and many judges understand that when the same person (or entity) purchases several properties, it is necessarily a speculative purchase not protected by the guarantees of Law 57/68.

In this sense, we would like to highlight the decision number 73/2019 of the Provincial Court of Alicante, dated: 01/24/2019, in which the Appeal Court noted that although it is true that the protection of law 57/68 is not applicable to property purchases for speculative purposes or by investors there may be exceptions.

In this case the court noted that the purchaser was a retired man who bought three properties and the court understood that there were indications that he could have acquired them for his three children and in addition the bank did not prove that the buyer was an investor or speculator, nor were the properties purchased for professional purposes.

The court therefore ruled that the bank was liable to repay the money lost in this case.

Therefore, if you lost money in the purchase of properties from a developer in Spain and do not know if you can claim or not, we recommend that you obtain advice from an expert lawyer, contact us and we will help you.


The information provided in this article is not intended to be legal advice, it simply transmits information related to legal issues.


Carlos Baos (Lawyer)

White & Baos

Tel: +34 966 426 185


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