Words: Ashley Rigg
Published: 20th January 2011
*Spanish court makes “landmark” property ruling
A Spanish court has made a “landmark ruling” to uphold the principal of bank guarantees on off-plan property despite small-print exonerating the bank from liability.
The judge in Cantabria ruled that the bank, Caja Cantabria, had failed in its duty and ordered it to give the client a full refund of both deposit and staged payments for a unit on an off-plan development which was purchased during the boom but never completed.
The court disregarded small print which stated the bank guarantee had expired, deciding that guarantees could not expire whilst the purchaser still had no home to show for their money.
No-win, no-fee legal firm ReclaimYourDeposit.com director Daren Wallbank comments:
"Although bank guarantees were seen as the ultimate in security by Spanish property investors, we’ve uncovered many cases where the guarantee has been promised but not delivered and everyone from the bank to the lawyer, notary to the developer has seen fit to relieve themselves of responsibility for the failure”.
"This landmark ruling shows that the Spanish legal system is prepared to apportion blame and will not allow property scams to be brushed under the carpet. It gives us added confidence going forward as we work on behalf of our out of pocket clients”
"Sadly Spanish Law is not based on precedent in the same way as English Law, but undoubtedly other courts in Spain will take this verdict into account when faced with similar cases of which there are many”, he said.
Source: Global edge
User Comments
Many newspapers have reported a loss of profits to be gained in Spain, bad construction decisions and a loss on the Spanish stock market of a major building company. What they omit to explain is that the major building company, whose shares dropped by 60% had an increase of 1000% in the last 2 years. Construction empires on golf course in Murcia have seen a down turn in the interest of purchasers.
Watson,
thespanishpropertynetwork
Good result - well done. I trust Antonio from lawbird is not referring to you as being a bunch of crooks.?
Luisa,
Saffron International
What a bunch of crooks!
Antonio,
Lawbird
Well done to ReclaimYourDeposit.com, however, the chances are that it will (possibly) make Spanish banks think twice about offering such guarantees in the first place - not a bad thing overall considering the extent of unsold new developments - but it could mean problems in the future with respect to the bigger picture of developer financing in general.
Peter Mindenhall,
IPIN - International Property Investment Network