Our firm has helped many families, especially expats, recover money paid in the purchase of real estate assets ‘off plan’ that were never built. Although most of the Spanish courts have interpreted Law 57/68 (focused on protection of consumers-buyers, and effectively the base for these kind of legal claims) in an appropriate manner and in line with its spirit and nature, there have been some regrettable exceptions, although a minority.
Our law office has defended our clients’ interests from those banks which did not check as required by law 57/68, whether promoters had contracted the insurance or guarantees required by law to guarantee money paid by consumers when they opened special accounts to receive such amounts.
We also understand that those banks and insurance companies who did grant a general insurance policy or bank guarantee line, are themselves liable and must pay the money back plus interest, even if they did not give individualised certificates or guarantees to the buyer.
In connection with this second theory, we wish to emphasize today a recent judgment from the Supreme Court (Civil Division) of Spain, Court Order number 322/2015, dated 23/09/2015, concerning an appeal presented by Banco Popular, Sociedad de Garantía Recíproca de la Comunidad Valenciana (SGRCV) and BBVA on a ruling from Audiencia Provincial de Alicante, relative to the development Herrada del Tollo SL.
The Spanish high court says, as we ourselves have defended for a long time, that if there is a general bank guarantee or insurance line or policy to cover the amounts paid in advance in a development, as required by Law 57/68, the fact that an individual certificate is not delivered to the consumer does not affect the bank or insurer’s liability, as the delivery of this individual certificate really depends on the developer, bank or insurer, not the consumer.
So the Supreme Court concludes that:
i) On the agreement on a general insurance or guarantee and on the perception of the premiums, the insurer or guarantor is liable to cover the guaranteed issue, which was the obligation to refund the amounts received, together with interest as provided by Law, in relation with the development or construction to which the guarantee referred to;
ii) the issuance of the individual certificates or guarantees, by the insurer or guarantor, for each of the buyers, legitimizes the buyers to cash the guarantees (directly) on an execution court case, as per the art. 3 Law 57/1968; and
iii) the lack of individual certificates does not preclude that the obligation to repay the amounts handed over, with interest, ……………….. in favor of those buyers who have entered into a purchase agreement and pay money, due to the existence of the general guarantee or policy.
If you have lost the money paid for a purchase of a property from a developer – builder in Spain, contact us and we will help.
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)
Spanish Law firm solicitor attorney barrister.
Alicante, Denia, Costa Blanca Marina Alta
White & Baos 2015 – All rights reserved