Know Your Rights in Spain

Through a landmark decission, the Supreme Court has just stated the banks liability under Law 57/1968 before the buyers, confirming their obbligation to refund the deposits paid for non-built properties.

The case at hand, quite usual in our days, off-plan buyers paid the deposits agreed with the developer in advance, but they didn't get an individual certificate of guarantee (or BG).

The developer had signed colective insurance policies with  the banks BBVA & Banco Popular and with the insurance company SGR to cover the refund of deposits in case the properties were not built or not finished in time.

The banks refused their liability arguing that they only covered those buyers in favour of whom they had issued individual cettificates.

The Supreme Court states in this landmark ruling that the right to be refunded comes out not from the individual certificate, but from the policy itself, and that any off-plan buyer comes under the cover of the colective insurance policy just by paying the agreed deposits.

This is great news for all those buyers who saw their monies fly away when the developer went into bankrupcy (many cases in the latest years, such as Trampolin Hills, Santa Ana del Monte, Aifos, Fortuna Hills, La Tercia Real, etc.) and the properties were never finished (sometimes, even not started to be built), that now can claim their money back, with the support of a landmark decission from the Supreme Court.

Even though, this line of reasoning has been held in the latest years by our Firm (and others), bringing succesful legal actions against those banks receiving the funds.

After several favourable rulings (many of them yet executed), it's a big support that Supreme Court confirms this, understanding that the mere payment of the agreed amounts puts the buyers under the protection of the policy, as this kind of guarantees are considered as a collective insurance. 

This will encourage all those not claiming yet to do so, and will give peace of mind to those already in the process awaiting for a decission or the confirmation of the one they had.

Find below a link to the relevant piece of news and also to the full text of the ruling:

http://www.legaltoday.com/actualidad/noticias/el-supremo-dictamina-que-la-falta-de-un-aval-individual-en-las-polizas-colectivas-no-impide-estar-asegurado

http://www.poderjudicial.es/search/doAction?action=contentpdf&databasematch=TS&reference=7479879&links=Ley%2057%2F1968&optimize=20150929&publicinterface=true

Last 14th july the Spanish Parliament issued Law 20/2015 (published in the Official Gazzete wednesday 15h july 2015), which contains the new regulation for the insurance sector.

Of course, there would be lots to comment on the new insurance regulation, but this is not the aim of this forum, nor of this post. In fact, we would not mention Law 20/2015 in this blog, being the only reason to comment it the deep changes this Law implies for off-plan property buyers.

Hidden in an Additional Provision of the said Law 20/2015, we can find two relevant decissions that affect seriously the rights of the buyers:

          1) Law 57/1968 is abolished

          2) Law 38/1999 is modified, and the obbligatio to issue BGs or Insurance just comes since the building licence is issued to the promoters.

It seems the pressures from the Banking and Insurance Companies lobbies have been succesful because this means a significant cutting on buyers rights.

Law 57/1968, that was ratified by Law 38/1999, had operated as a Consumers' Protection regulation, protecting off-plan buyers from losing the monies paid in advance for the properties in case they weren't built or finished and/or the promoter came to insolvency.

Now, with Law 57/1968 out-of-game and Law 38/1999 modified, the protection to the off-plan buyers is limited, as far as now the obbligation to issue guarantees for the advanced payments comes out only since the building licence is granted.

For us it's really a nonsense regulation, as far as the Supreme Court is, in the latest judgments, highlighting the protective nature of Law 57/1968 and ruling in favour of the buyers' rights, and this new regulation comes to erase all the safeguarding system stated by that Law, pointed by the Highest Court as the lead to follow.

If this new regulation would have been in force within the latest years, buyers of such famous developments as Trampolin Hills, Fortuna Hills or Santa Ana del Monte would be absolutelyunprotected.

Fortunately, this new regulation just will operate since 1st january 2016, so the former off-plan buyers would be still under the protection of Law 57/1968 and Law 38/1999.

But, should you be interested in buying an off-plan property, you shouldn't make any payment until the building licence is granted to the promoters, unless you want to risk to be unprotected for the advance payment.

Since last 13th June, your siesta shouldn't be disturbed by any commercial call.

The recently reformed Spanish Law for Consumers' Rights Defense states that commercial calls won't be done in certain times.

This is not the only new things this reform brings. The most relevant are the following:

1.- The online stores will provide more information, more clear, and in a type size easy to read (even in mobile and tablet screens).

2.- The prices of goods and services offered in the web or in advertising must be final prices, including detailed expenses, means of payment or finance.

3.- The buyer will be able to desist the purchase 14 days after the order, with no additional costs or penalties.

4.- About the "Online Spam", even if you are client os a web, can refuse receiving online advertising of the services agreed.

5.- Any charge for credit or debit card payment that exceeds the real cost for the seller is forbidden. 

6.- Commercial calls can't be done with hidden phone no..

7.- Contracts done by phone must be confirmed in written.

8.- If there's a minimum term or the contract and the contract is cancelled before, the cancellation penalty will be calculated on a pro rata basis

STEP 1.- Is your contract yet rescinded?

    YES -> Go to step 2          NO -> You must rescind it into the Insolvency Process

STEP 2.- Do you have a Bank Guarantee

    YES -> Great! You must execute it, even if it has an "Expiry Date". Perhaps you can even make a quick deal with the bank 

    NO, BUT I HAVE A FOTOCOPY OF ONE IN MY FAVOUR -> Let's have a look at it. Perhaps is as valid as an original.

    NO -> Don't worry. There's a solution. Slower, but, at the end of the day, a solution. Go to step 3

STEP 3.- Do you have all the payment evidences?

    YES -> Great! Go to step 4.

    NO -> Try to get them. Must be some way to get them.

STEP 4.- Did you make the payments into a bank account of the Promoters?

    YES -> Go to step 5

    NO -> Call the agent or broker you gave your money to and tell him/her/them to give you the evidences of the payment of those amount to the promoters.

STEP 5.- Sue the bank.

    Law 57/68 states that Promoters had to guarantee the reimbursement of payments plus interest with a BG and that the Banks that received the funds should check, under their resposibility, if the moneys they received were or not guaranteed. If your money was not guaranteed, and they received it, there's a negligence, and the bank must pay for that.

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Every case is singular. Contact us and we'll be happy to listen to your case.

www.lucasasociados.com   www.lucasasociados.es

Last week, our Firm received two judgments against BBVA, who received advanced payments for off-plan properties without issuing Bank Guarantee for those amounts or checking if they were guaranteed by other entity.

Courts no 2 of Almería an no 9 of Alicante granted judgments in favour of foreign clients of our Firm, obblying BBVA to pay back the amounts paid through their accounts plus interests since the date of each payment.

With these rulings, the Courts of Alicante confirm their unanimous opinion on this matter, and the Courts of Almería join this line of thinking, yet followed by the Courts of Murcia, Leon or Burgos, amongst many more, and also by the Supreme Court