HOW TO GET A REFUND ON YOUR ADVANCE PAYMENTS FOR AN OFF-PLAN PROPERTY PURCHASE THAT WAS NOT BUILT
If you have been affected by property developers or real estate co-ops in breach of contract (which, during the hardest years of the financial crisis have just “vanished” or who went into bankruptcy without finishing construction or refunding their clients) you should know that not everything is lost! The law is clearly in your favour, and there is a high probability of success in getting your money back.
HOW CAN YOU GET YOUR MONEY BACK?
Consumers who made advance payments toward the construction and purchased off-plan property that was not built according to the terms and conditions agreed in the contract can present their claim to the property developer’s bank to recoup their monies, based on Law 57/68 and on the ruling of the Spanish Supreme Court of date December 21, 2015, which set a legal present in the defence of the interests of consumers.
WHAT DOES THE LAW 57/68 STATE?
Law 57/68 states that off-plan property purchasers can recoup any advance monies paid to sellers if the property was not finished or delivered in the time stipulated.
This law, which is applicable to all cases of property purchased before December 31, 2015, regulates the responsibility of banks in cases in which the developer does not fulfil their contractual obligations to off-plan property buyers.
These breaches of contract may be caused by the inability of property developers to secure the required administrative permits for the construction of property dwellings; by lack of funding, even in cases that might have resulted in the dissolution of the company or in individual voluntary arrangements with creditors due to not having the financial capacity to reimburse clients their advance payments.
THE SENTENCE OF THE SUPREME COURT IS A GUARANTEE OF SUCCESS FOR YOUR CLAIM
On December 21, 2015, the Spanish Supreme Court made a paramount ruling in favour of claimants, citing Law 57/68.
With this ruling, the Supreme Court set a legal precedent that mandates banks to reimburse advance payments made by clients to property developers for any off-plan property that was either not built or not delivered under the terms of the purchase contract.
Banks are, therefore, obligated and sentenced to answer for the breach caused by the property developer. As a consequence, First Circuit Judges have sufficient legal precedent to apply the same criterion to any lawsuits filed in their local courts.
WHAT DO THE BANKS SAY?
In their effort to evade responsibility, banks have argued that they played the role of an independent third party, not directly linked to the relationship between buyers and sellers. Conversely, the Supreme Court ruling is clear and categorical when it states that:
“[…] in the purchase of property under the tenets of Law 57/1968, credit institutions that have allowed the deposit of advance payments from buyers in the property developer’s account without the requirement of opening a special account and ensuring the provision of the corresponding bank guarantees, shall be responsible to the buyer for the total amount of all advance payments made by buyers and deposited in the account or accounts that the developer had opened in said bank institution […]”
FILING LEGAL ACTION IS THE ONLY LEGAL RECOURSE TO GET YOUR MONEY BACK
In a scenario of widespread economic crisis, it seemed impossible for those affected to recoup their advance deposits, and the only possibility to do so was to file claims against the banks that received the payments and acted as property guarantors.
The legal precedent set by the Spanish Supreme Court allows for a court settlement attainable through legal action as a legal recourse for buyers affected by the bankruptcy of property developers and to recoup 100% of advance payments made, plus legal interests.
BEWARE! THERE IS A DEADLINE FOR LEGAL ACTION!
As an affected party, you should know that there is a set deadline for filing legal action and recovering your money! According to the latest amendment to Law 57/68, the final deadline to make your claim is December 30, 2020.
Until December 31, 2015, all off-plan property buyers were protected by an all-encompassing law, the aforementioned Law 57/68. Surprisingly, and to the relief of banks and insurance companies, Law 57/68 has been repealed. Since January 1st, 2016, the regulation and guarantee for advance payments made by co-operatives and off-plan property buyers are regulated by the (reformed) First Additional Provision of Law 38/1999, and Building Regulations (de Ordenación de la Edificación) Law 20/2015.
The main innovation introduced by this amendment, regarding advance payments, is that the insurance or bank guarantee shall not be liable for the total amount paid in advance toward the purchase of a property dwelling, but that the amounts covered are only those paid after the obtaining of the construction licence on the part of the developer.
Therefore, if you want to recover the total amount of any advance payments made to a property developer, we strongly advise you to file legal suit as soon as possible.
DEFEND AND RECOVER WHAT IS RIGHTFULLY YOURS
At Carlos Haering Lawyers we provide a free consultation service and feasibility study to evaluate the merits of your particular case. Should you choose to, we are ideally suited to handle all the aspects of your legal claim, including taking it to the courts.
We are specialists in Banking Law and claims against financial institutions. Hundreds of favourable rulings for our clients attest to our ability. Call us now for a no-obligation consultation. We will respond with complete honesty and transparency. We do not require a single Euro in advance. We only charge lawyer fees if you recoup your money.
We are located in Marbella, and have presented legal action against the most important cases in the Costa del Sol and the Malaga province: Promotora AIFOS, Grupo EVEMARINA, GEPROLAR, INTERLAKEN 2003 SL, PROVERTE, SIERRABLANCA COUNTRY CLUB, EXPLOTACIONES INMOBILIARIAS ALCAZABA, amongst others.