A new hope for the buyers of off-plan properties in Spain
The Spanish Supreme Court has issued a Judgement, and thus set a legal precedent, by which the banks of the developers who did not complete properties bought off-plan during the 2000s must refund the buyers who advanced funds.
After the burst of the construction bubble in Spain in 2010 / 2011 thousands of developers were taken into administration or simply shut down their business and disappeared, leaving whole developments unfinished and thousands of euros paid as deposits completely lost.
The buyers have tried for years to have their deposits returned from the builders, unsuccessfully.
During 2014 and 2015 the lower Courts issued some Judgments favouring those frustrated buyers and making the banks liable to return the payments.
This was based in the Construction Law 68/57 which stated that the banks should “keep the funds advanced by buyers in off-plan schemes separated and under proper custody”.
Most banks did not observe this and allowed their clients (the developers) to use the funds for any purpose, including other ventures and business of the builders, completely unrelated with the constructions for which they’ve received payments in advance.
However, the banks fought back fiercely against the court rules, claiming that they were separate entities to that of the builders and that they had no obligations concerning the developers monies.
The buyers then had to go to the Higher Courts, and eventually to the Spanish Supreme Court, to make the banks liable for their payments.
A recent Supreme Court Judgement has ended the dispute.
In a Judgement of direct application to most off-plan purchases during the building boom in Spain (those years between 2004 and 2009), the Supreme Court makes the developers’s banks fully liable for not observing the Law 68/57 and forces the banks to return the payments made in unsuccessful off-plan schemes and complexes.
The only requisites to claim the deposits made to the developers are;
- That the payment was made before January 1st 2016.
- That there was an off-plan contract / agreement in place.
- That the person / parties mentioned in the said agreement as buyers paid directly to the developer.
- That the buyer has a kept a record or relevant documents of the two points above.
Those who tried unsuccessfully to purchase a property off-plan and who comply with the four points above can email the relevant documents to email@example.com for a non-obligation consultation.
After this review RDT will confirm within 24 hours that they qualify for a refund and also that a no-win no-fee action can be submitted at the Courts in Spain.
If deemed liable, as the Supreme Court, rules, the bank will have to return the payment made, the interest and all the Court costs.