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PROMOCIONES EUROHOUSE 2010 S.L. - BANK ACTION WON IN PROVINCIAL APPEAL COURT AGAINST CAJA RURAL CENTRAL FOR BUYERS AT FORTUNA GOLF RESORT & PUEBLO LA SAL (SAN PEDRO DEL PINATAR)

Notification sent today to a group of our clients who had reserved off-plan properties from the developer, PROMOCIONES EUROHOUSE 2010 S.L. at FORTUNA GOLF RESORT & PUEBLO LA SAL in San Pedro del Pinatar, informing them that CAJA RURAL CENTRAL had lost its Appeal against the First Instance Sentence
 

Re: YOUR CASE AGAINST CAJA RURAL CENTRAL HAS BEEN WON IN THE PROVINCIAL APPEAL COURT

Please find attached Sentence number XXX/15 from the Provincial Appeal Court Section 9 (Elche) in Alicante.

I am very pleased to advise you that the Appeal filed by Caja Rural Central SCC has been dismissed and the First Instance Sentence has been confirmed in its entirety.

The final paragraph of the First Instance Sentence delivered on 10 December 2014 and notified on 17 December 2014 stated:


“Substantially estimating the Lawsuit filed on behalf of xxxxx 16 BUYERS xxxxx against CAJA RURAL CENTRAL SOCIEDAD COOPERATIVA DE CREDITO, and must condemn the defendant to the repayment of the amounts paid on account of the purchase price of homes deposited in the account of the defendant CAJA RURAL in the name of the Promotor PROMOCIONES EUROHOUSE 2010 S.L., allocated as per the second article of this Sentence, amounting to a total of 406,385.52 Euro, plus legal interest from the date of payment to the developer until full payment & legal costs”.


The final paragraph of the Provincial Appeal Court Sentence delivered on 11 June 2015 states:

“We dismiss the Appeal filed by CAJA RURAL CENTRAL SCC against the Sentence of the First Instance Court No. 3 of Orihuela dated 10 December 2014 and fully confirm the First Instance Sentence with the imposition of the costs of this Appeal on the Appellant”


So the Provincial Appeal Court has dismissed the Appeal filed by Caja Rural Central against the First Instance Sentence.  The First Instance Sentence has been confirmed in full.

The costs of the Appeal are imposed on Caja Rural Central.

Interesting statements from the Provincial Appeal Court are:


“Caja Rural maintains that Article 1 of LEY 57/1968 is not applicable because it was not involved in the Purchase Contracts signed between the buyers and the developer and that the obligation to Guarantee the amounts paid by the buyers lies exclusively with the developer. Caja Rural also states that the amounts were entered into an Ordinary Current Account and not a Special Account as required by the Law.

This appeal is not well founded taking into account the arguments detailed by the Judge in the First Instance.  In fact Article 1 of LEY 57/1968, in the first paragraph, imposes on individuals and companies that promote housing construction and who receive payments in advance, the duty to guarantee repayment of the amounts paid by way of insurance or guarantee in the event that construction does not start or does not come to fruition, adding in its second paragraph that sums advanced by purchasers shall be deposited in a special account, adding in the last paragraph that for the opening of these accounts the bank or savings bank, under its responsibility, must require the guarantee to which the previous condition refers to, that is, the guarantee of repayment of the amounts paid by and insurance contract or bank guarantee.  In the same vein we find the first additional provision of LEY 38/1999 of 5 November of the Building Act, insists on guaranteeing the amounts paid in advance by way of insurance compensation for breach of contract and Article 1 imposes obligations on the financial institution through which the developer receives the advance payments from buyers.

Therefore, and since jurisprudence has repeatedly stated that lack of income in a special account is an exception that the insurer cannot raise against the insured, it is clear that the appellant Bank cannot rely on that fact to ignore obligations in respect of the buyers, when the Bank accepted the entry of the amounts paid by purchasers of homes, as proven in the proceedings.

The appellant bank, as has been reiterated by this Court, in a ruling dated 25 June 2010, is a skilled professional that has ‘full knowledge and information of applicable regulations & duties’ and this negligence is punishable.  The appellant Bank knew that Promociones Eurohouse 2010 SL was a company dedicated to selling off-plan real estate and it is meaningless for the bank to allege that they knew nothing about the source of the substantial income received into the developers account opened in their offices.  The fact that the account was a normal current account and not a special account, cannot be attributed to the buyers as has been confirmed by a recent Sentence from the Supreme Court.  It is the duty of the entity that received the buyer’s funds to ensure compliance imposed by LEY 57/1968 and any breach of this compliance creates the liability of the entity.  As rightly established by the First Instance Judge, Caja Rural should not have accepted the amounts paid by buyers to Promociones Eurohouse 2010 SL without first ensuring that the promotor had assumed its legal obligation to ensure the return of these amounts paid in advance and may not now try to avoid its responsibility to the buyers of off-plan homes”