Words: Ashley Rigg
Published: 5th November 2009
Another developer forced into bankruptcy
The developer behind the
Trampolin Hills Golf Resort in the Spanish province of Murcia has been forced into bankruptcy proceedings unable to pays its debts, according to reports in the local press. Administrators have been appointed to run the company, and creditors now have a month to register their claims.
Trampolin Hills, in Campos del Río, had been struggling to survive since the market downturn and was dealt a fatal blow when the town hall refused to approve its plans to build 2,500 homes and a golf course.
Investors who bought off-plan without a bank guarantee will now at the back of the creditor queue and face potentially huge losses. The bankruptcy will add further weight to the argument that developers should offer escrow facilities or bank guarantees as standard to protect consumers and help reverse the damage that cases like this do for the image of the industry.
Trampolin Hills follows in the footsteps of Nozar, Llanera, Martinsa Fadesa, Habitat, Tremón, Aifos, Constructora Pedralbes, Edisan, Obrum, DHO and Begar, amongst others.
Further coverage on
Spanish Property Insight.
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User Comments
You state in your article:
"The bankruptcy will add further weight to the argument that developers should offer escrow facilities or bank guarantees as standard to protect consumers and help reverse the damage that cases like this do for the image of the industry"
There is no argument as to whether developers or banks "SHOULD" offer Bank Guarantees.........It is the law. Any developer or bank not protecting deposits for off plan purchases in a Cuenta Especial and not issuing the corresponding Bank Guarantees are breaking Spanish Law and should be punished accordingly.
Here are the relevant clauses of LEY 57 / 1968
Primera - Garantizar la devolucion de las cantidades entregadas mas el seis por ciento de interes anual, mediante contrato de seguro otorgado con Entidad aseguradora inscrita y autorizada en el Registro de la Subdireccion General de Seguros o por aval solidario prestado por Entidad inscrita en el Registro de Bancos y Banqueros, o Caja de Ahorros, para el caso de que la construccion no se inicie o no llegue a buen fin por cualquier causa en el plazo convenido.
Segunda - Percibir las cantidades anticipadas por los adquirentes a traves de una Entidad bancaria o Caja de Ahorros, en las que habran de depositarse en cuenta especial, con separacion de cualquier otra clase de fondos pertenecientes al promotor y de las que unicamente podra disponer para las atenciones derivadas de la construccion de las viviendas. Para la apertura de estas cuentas o depositos la Entidad bancaria o Caja de Ahorros, bajo su responsabilidad, exigira la garantia a que se refiere la condicion anterior.
First - To ensure the return of the payments made plus six percent annual interest, by means of Contract of Insurance granted with an Insurance Entity inscribed and authorized in the Record of the General Sub-department of Insurers or by means of a Bank Guarantee issued by an Entity inscribed in the Record of Banks and Bankers or Savings Banks, if the construction does not commence or complete for any reason by the agreed deadline.
Second - Depositing the sums advanced by purchasers through a Bank or Savings Bank, which must be deposited in Special Account, with separation from any other funds belonging to the promoter, which may only contain funds deposited for the construction of dwellings. For the opening of these accounts or deposits the Banking institution or Savings bank, under its responsibility, will demand the guarantee to which the previous condition refers.
Kind regards
Keith
Keith,
Finca Parcs Action Group