WON CASE in FIRST INSTANCE COURT AGAINST BANCO POPULAR FOR OUR CLIENT WHO PURCHASED AN OFF-PLAN PROPERTY FROM THE DEVELOPER HUMA MEDITERRÁNEO S.L. AT ALMANZORA COUNTRY CLUB
We were extremely pleased to inform our client today that we had won their case against BANCO POPULAR in the First Instance Court.
The client paid a six figure sum to the developer’s account at BANCO POPULAR and only received an Individual Guarantee for around 50% of the amount paid. The client did not receive an individual Guarantee for the other 50% of the off-plan deposit (claimed in this Lawsuit) from the developer, Huma Mediterráneo S.L. or from BANCO POPULAR, the Bank to which their off-plan deposit was paid and the Bank that signed a Guarantee Line with the developer.
Re: YOUR CASE AGAINST BANCO POPULAR ESPAÑOL S.A.
PO xxxx/2014
Please find attached the Sentence from the First Instance Court No.8 in Murcia.
Your case against BANCO POPULAR ESPAÑOL S.A. has been won.
The final paragraph of the First Instance Sentence delivered on 29 January 2016 and notified on 3 February 2016 states:
“Substantially upholding the Lawsuit filed on behalf of xxxxxx xxxxxx against BANCO POPULAR ESPAÑOL S.A., I must condemn the defendant bank to give to the plaintiff within 30 days an individual guarantee or certificate of insurance for the amount of xx,xxx Euro that was paid by the buyer to the defendant bank to the account of the developer on account of the purchase price of a house from Huma Mediterráneo S.L., plus interest at the rate of 6% per annum as agreed in the Guarantee Policy dated 12 May 2005, starting from the delivery date of the advance payments (10 August 2005) until payment in full, with the imposition of procedural costs on the defendant”
So BANCO POPULAR ESPAÑOL S.A. is sentenced to issue the Individual Guarantee within 30 days and to then refund the amount of xx,xxx€ plus interest at the rate of 6% per annum from the date you paid to the developer’s bank account until complete repayment.
Costs of the legal proceedings are also imposed on Banco Popular.
Interesting statements from the Judge in the Sentence were:
“Banco Popular granted Huma Mediterráneo as of 12 May 2005, two general guarantees for the repayment of amounts paid in advance by buyers plus interest, one for a maximum amount of 2.5 million euros and another for a maximum amount of 4.25 million euros. In this case the buyer paid a total of xxx,xxx€ to the developers account opened at Banco Popular. The bank issued an individual guarantee for xx,xxx€ which was legally satisfied by the defendant bank.
However, as a result of planning irregularities and the declaration of bankruptcy of Huma Mediterráneo S.L. the buyer requested termination of the purchase contract and had a claim recognised in the bankruptcy procedure amounting to xx,xxx€ which was the amount not individually guaranteed by the defendant bank.
Banco Popular claims lack of capacity to be sued as it never issued a guarantee for the funds, individually or collectively. The bank states that neither the contract nor the law LEY 57/1968 establishes this obligation. It states that the account to which the funds were paid was a normal current account and not a special account. Furthermore it states that it was not the only guarantor in this promotion and that although Banco Popular had issued some individual guarantees there was no evidence to show that the developer had requested it to issue an individual guarantee for the amount of xx,xxx€.
The issue regarding the lack of capacity to be sued must be rejected as the legitimisation of Banco Popular is determined by the General Guarantee policies signed with Huma Mediterráneo on 12 May 2005.
The fact that the General Guarantee policies signed between the bank and developer are for a limited amount is contrary to the law. Any agreement that contradicts the mandatory rule (Article 6.3 of the Civil Code) is void as the rights recognised in LEY 57/1968 to home buyers are of an inalienable nature.
Indeed, to understand the full extent of the scope of the obligations imposed by this Act to financial institutions is necessary to go to the final paragraph of the second condition of article 1, which states that ‘for the opening of these accounts or deposits the bank or savings bank, under its responsibility, must require the guarantee that the above condition refers to’.
This statement attributes to the bank the duty to demand the guarantee, coupled with accountability, of ensuring the amounts advanced by the buyers are entered into a special account with separation from any other kind of funds belonging to the promoter and from which it may only make withdrawals for the construction of housing. If there were doubts regarding this then Supreme Court Sentence of 21 December 2015 has set as case law as follows: ‘In the house sales governed by Law 57/1968 credit institutions that receive income from buyers into the promoters account without requiring the opening of a special account and corresponding warranty/guarantee are liable to buyers for the total of the amounts anticipated by the buyers and deposited in the account or accounts that the developer has opened in this organization’.
Nor is it an irrelevant fact of the economic benefit accruing to banks to arrange these transactions, since the obligation to deposit the advance payments into an account opened for that purpose in that entity as consideration involves not only the price of the guarantee, but also the gain or advantage derived from the financing of the property development.
In short, we are not facing common contract bond under Article 1822 of the Civil Code, but an endorsement of a special nature regulated by Law 57/1968, which provides the indispensable guarantees for homebuyers who delivered quantities towards the total price (STS. of 4 December 2009) and has a strong protective nature of the rights of these buyers, as consumers who hire a professional construction, since they can suffer irreparable damage. As a second premise, there is repeated jurisprudence stating that it is not a prerequisite that the entry of the amounts is verified in an account specifically listed as Special for the bank to respond even to sums not guaranteed, without limitation.
In consideration of this doctrine is to be understood that it is the responsibility of the bank receiving the funds into the developer’s account to require the developer to constitute a specific individual guarantee to cover the amounts paid in advance by each buyer and the lack of requirement by the bank for the developer to issue such individual guarantees may have an impact on the purchaser if the developer breaches its obligations to construct the property.
It is true that this is not a breach of obligations by the bank guarantor, but it is aware from the outset that the granting of the guarantee line creates a legal relationship that produces effects towards a third party, a third party which has the status of consumer, who cannot be adversely affected by the violation of the duties by any of the contracting parties, formed by two business entities.
In short, Banco Popular awarded Huma Mediterraneo a guarantee line for the provision of individual guarantees to various individual homebuyers in the promotion Almanzora Country Club, guaranteeing the amounts paid on account by the buyers of these homes. And then the buyer’s funds were entered in an account of the entity in the name of Huma Mediterraneo SL without the Bank making any inquiry about the reason why any individual certificate of guarantee is not requested for the home buyers. Therefore, the defendant Bank must respond to the applicant for the sums of money given to the seller as advance payments for the purchase of housing and deposited into the account. Furthermore, the mention of Aldea Asesores SL as a legal person performing the transfer of xx,xxx€ has no bearing on the outcome of this procedure, as the transfer document contained sufficient data for the bank to identify the buyer.
The legal questions raised by the Bank at the Preliminary Hearing (4 November 2015) regarding the Supreme Court Sentence dated 5 February 2013 were already superseded by the Supreme Court Sentences dated 30 April & 23 September 2015 which definitively clarified any dispute concerning this matter but despite this the defendant bank decided to continue the procedure”
BANCO POPULAR has 20 working days from the date of notification of the Sentence, which was 3 February 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Murcia.
If an Appeal is filed by BANCO POPULAR it will be necessary for us to file an Opposition to the Appeal on your behalf.