http://www.eyeonspain.com/blogs/costaluz/2746/lgel-tip-206-steps-if-developer-applies-for-insolvency-status.aspx
Legal tip 206. Steps if developer applies for Insolvency status
05 January 2010 @ 07:55
There are lots and lots of information about this on Eyeonspain, but still I see people who seem not to know what to do if their developer is granted the insolvency protection by a Commercial judge:
A reminder today:
The main aim of an insolvency protection is to try to keep the life of the company. So initially nothing needs to make you think that the apartment will not be finally built or that all to come is disaster. Anyhow...
There are some things you can and you must do:
I) If you have decided to want to cancel your off-plan purchase and have rights to do so, according to Law 57/68, Contract and Consumers Law and related Case Law. You might be under two different circumnstances:
a) You have a Bank Guarantee/ Insurance policy according to Law 57/68. The good new is that: If the premises for its execution exist, you can execute it for the refund of deposit plus legal interests from the Bank or Insurer. No expiration deadlines which may be contained in the Guarantees documents count. Interests are always included, regarding the text of the document. The bad new is that in most of the cases a litigation is needed. Even if you decide to execute the Bank Guarantee, it is also advisable to register the credit before the Judge.
b) You do not have a Bank Guarantee: First step is to register your credit before the Commercial judge governing the insolvency situation. There is a deadline of 30 days from last publication of the insolvency granting. You also need to direct a cancellation notice against the developer under administration.
Under this b) situation, if you obtained a favourable Court decission but you were not able to cash your Court decission against the company due to its insolvency, our proposal is to use compensation of damages actions against those who had to secure on the existence of Bank Guarantees/ Insurance Policies and did nothing about it: Civil liability action agsinst the solicitors´ Insurance company and action out of 1.2 of Law 57/68 agsinst the Bank which received deposits.
II) If, on the contrary, you want to keep the contract alive. Once completion deadline arrives, you can start asking the administrator of the company for price reductions due to the delay and stablish a new completion deadline in order to have a new , extended contract. Otherwise, they may claim you are allowing extension for ever. I would also ask for a Bank Guarantee now too if you do not have it. At least you will have this written petition which mat be useful in the future.
Please email us if you have further questions regarding this.
Maria.
www.costaluzlawyers.es