We were contacted by our solicitors in November asking us if we wanted re rescind our contract and receive a refund of monies paid to date because the contract completion was suppose to be 30th October 2006 and as stated in clause 6 of the contract the buyer had until the 15th Nov to notify the developer that he wished to resolve his contract, receive a refund plus legal interests and as an compensation receive a 10% of the monies paid to date.
As we were concerned with the president of Arenal 2000 was arrested we thought it would be an opportunity to get our monies back to date and invest it elsewhere. However, it wasnt so easy Arenal argued the following:
They considered that our solicitors were not entitled to represent us to cancel because we had not given them power of attorney at that time. This of course could be rectified by us going to a public notary. They also mentioned that the property has been built in the agreed period of time, as the architect has already certified the construction has been finished (this is relating to Phase 1 Block 13). From a legal point of view as the property has not obtained the first occupation license yet, it can not be considered finished, so they have not fulfilled their contractual oligations. Finally, they consider that they are not inbreach of contract as the completion date had not expired , and they argue that the Andalusian Law allows to agree completion dates in trimesters. Although it is true that the Andalusian Law allows to agree completion dates in monthly basis and also in trimsters, this is not the case of our private purchase contract, as there is an specific date to proceed with completion, and our property has to be legally finished on that date. The contract specifically allows us to cancel the contract if the property was not ready by the 30th october alternatively, we also had the right of granting 8 months more to the developer to finish the property if we so wished but this had not been the case.
Bearing in mind of the above in our solicitors opinion we had a right to cancel our contract and the developer had the obligation of refunding the money that we have already paid, plus legal interest, plus 10% of the funds that we had already paid as a compensation.
Nevertheless, as the developer is refusing to proceed with the cancellation of the contract and the refund of the money, in order to exercise our rights, we would have to take legal actions against the developer and although the funds that we had already paid are protected with an insurance policy, the developer and the insurance company are cooperating between them and for that reason our solicitors considered that the chance that we would be paid from the insurance company was very low, unless we took legal action against them as well.
Our solicitor stated that if we wanted to cancel our contract we would have to be aware of the following
The next step would be to grant power of attorney to our solicitor cost being 200-300 pounds.
Once power of attorney given they would request again from the insurance co and the developer to proceed with the payment of the moneys that they have been paid plus interests. They would also request the developer to pay the 10%of the funds that have already been paid (as this is not covered by the insurance policy). The fees then for the solicitor requesting for the payment from the developer and insurance co would have been 500 euros plus VAT. 95% of the cases both the developer and the insurace co would refuse to refund the money and pay the 10% compensation ast this is what they have already said. If this is still the case, after requesting them to proceed with the payment again, next step would be to take legal action against both the developer and the insurance co. Our solicitors fees would be 2,000 euros plus VAT. Also we would have to make a provision of fund 800 euros to cover fees for barrister. The trial process could take about 1.5 - 2yrs to have a sentence depending on the volume of work in the court.
Our solicitors advised us we were entitled to cancel our contract and claim to the developer to pay us compensation but made us aware that we could not be guaranteed we would win and if we did win then the developer could appeal the sentence and this would involve more time and expenses for us.
Therefore knowing the above and knowing how long things take in Spain to get done we decided it was not a good idea to proceed with cancellation as our money would be tied up for 2 years plus costs and expenses could raise to £2000+. The Spanish Law would also be in favour to the Spanish especially when these developers could be paying the'people at the top'. So its a matter of sticking with it and hoping that they sort themselves out and get the complex completed and up and running so that the complex can arrange a community of owners meeting to ensure any site problems can be sorted out before the developer moves out.
Sorry the above long winded but wanted to show everyone the problems that arise if u wish to pull out.