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LEY 57/1968 WON CASE in FIRST INSTANCE COURT AGAINST BANCO POPULAR FOR OUR CLIENT WHO PURCHASED AN OFF-PLAN PROPERTY FROM THE DEVELOPER LOS LAGOS DE SANTA MARÍA GOLF S.L. AT URBANIZACION SANTA MARÍA GOLF

We were extremely pleased to inform our client recently that we had won their case against BANCO POPULAR in the First Instance Court.

The client paid their off-plan deposit according to the Purchase Contract to the developer’s bank account at Banco Popular.  The client did not receive an individual Guarantee for their off-plan deposit from the developer, Los Lagos de Santa María Golf S.L. or from the developer’s bank.  Banco Popular issued a General Guarantee to the developer but the buyer did not receive an Individual Guarantee.

Re: YOUR CASE AGAINST BANCO POPULAR ESPAÑOL S.A.
PO xxx/2015

Please find attached Sentence number xx/2016 from the First Instance Court No.2 in Marbella.

Your case against BANCO POPULAR S.A. has been won.

The final paragraph of the First Instance Sentence delivered on 23 May 2016 and notified on 25 May 2016 states:

“Upholding the Lawsuit filed on behalf of xxxxxxx against BANCO POPULAR S.A. and condemn the defendant to pay the plaintiff the amount of xx,xxx€ plus legal interest from the date on which the various amounts were paid to the account.  No assessment of costs”


So BANCO POPULAR S.A. is sentenced to refund the total amount of xx,xxx€ plus interest at the legal rate from the date on which each amount was paid to the developer’s bank account.

There is no imposition of costs of the First Instance.

Therefore each party will pay its own legal costs.

Interesting statements from the Judge in the Sentence were:


“The claimant signed a purchase contract with the entity Los Lagos de Santa Maria Golf S.L. on 14 August 2002 for the purchase of a home in the Urbanisation Santa María Golf.  The contract stipulated that the property would be delivered in September 2004, allowing an extension of 3 months with a maximum deadline of December 2004.  The housing does not have the First Occupation Licence.  Due to this situation the buyers expressed their will to cancel the contract by way of a burofax sent to the seller on 9 November 2012.  The seller was in a situation of bankruptcy.

The plaintiffs never received the individual guarantee so therefore the general guarantor must be responsible.

The defendant bank recognized that it issued a General Guarantee to the developer, but argued that the Guarantee has expired and the plaintiff has no cause for legal action as they had not been issued with an individual Guarantee.  The bank also argues that there is no ‘special account’ as referred to in the purchase contract.  Finally with regards to interest, it argues that, if convicted, it can only be required to pay the accrued interest since the refund was requested and not from the original date of payment by the buyers to the developer’s account.

LEY 57/1968 does not allow expiry dates for Guarantees.  According to Article 4 the Guarantee only expires when the First Occupation Licence is issued.  In this case the First Occupation Licence has not been issued.  The argument is therefore dismissed.

It is undisputed that the developer has failed to deliver the property to the buyer.  It is also established that no individual guarantee was issued to the buyer.

Therefore the repayment obligation to the buyers is generated when the valid period for delivery of the housing has expired.

With the existence of default by the promotor, the nuclear issue of this Lawsuit is actually to establish whether the existence of a General Guarantee (Guarantee Line) by the bank, without the issuing of an individual guarantee, gives the bank a liability to the buyer.

Supreme Court jurisprudence has recently confirmed that the non-issuance of an individual guarantee does not prevent the buyer having a claim against the General Guarantee.

The irrelevance of the existence of the ‘Special Account’ has also been recognised by the Supreme Court in its ruling of 21 December 2015.

In this case it is proven that the buyer paid the off-plan deposit to the developer’s account opened at the respondent bank and to the account stated in the Purchase Contract.

Consequently the arguments of the Bank should be rejected.

The Bank must be responsible according to the General Guarantee for the amounts paid by the buyer to the developer’s account opened in its branches.

As requested the defendant bank must pay legal interest from the date the off-plan deposit was paid to the developer’s account.

Regarding costs, the full upholding of a Lawsuit normally involves the imposition of costs to the defendant; however, in this case when the Lawsuit was filed and the Bank responded, there were serious questions of law which have only recently been clarified by various Supreme Court rulings.  Consequently, there is no imposition of costs.  Each party will pay its own costs”

  
BANCO POPULAR S.A. has 20 working days from the date of notification of the Sentence, which was 25 May 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Malaga.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If an Appeal is filed by BANCO POPULAR S.A. it will be necessary for us to file an Opposition to the Appeal on your behalf.