Hallo

How about some New Years resolutions for Peninsula?

1. Must put in place rental guarantee as this was how the development was marketed.

2. Must remember to complete the whole of the development and not just the minimum to obtain the habitation licence.

3. Must stop threatening clients.

Any more anyone?  Now they have taken over the shambolic rental scheme maybe there will be some progress there, interestingly they are still advertising the vanished rental guarantee, surely there must be a rule somewhere against this?  Thank you for all the posts from people who have completed, it seems a nightmare.  My concern has always been they would not spend the money to make the development habitable, just the minimum to get people to complete. This appears to be the case, although the sewage and water situation is far beyond anything I could have imagined.  It is a financial black hole, and without that rental guarantee there must be a number of us who could not afford the mortgage anyway.  If anyone has any bright ideas please let me know as well.  Thanks 

There are regional and national laws that prohibit the use of such false advertising but this is Spain so it seems that laws exist to be largely ignored especially if they are at the expense of foreigners. 

In many instances its impossible to get a ruling against a developer in a local court so people just don't bother.  That's why forums like this are invaluable!

Anyone got  the stomach for a class action??

Gaspar still owns 2/3 of ME23 - the rest having defaulted on deposits, so we've got to 'live with him' and he, obviously with us if he wants to sell the rest. I know he runs scared of the forums as the strength of the internet undermines his glossy marketing machine.

I wonder if the Consumer Protection specialist lawyer who advises this forum would be interested?

Don't waste your time on local conveyancing solicitors for this, as patronage gets in the way!

Any thought anyone??

This is a reply I had from a law firm in Spain - I've emailed him for further details - let me know if you're up for a collective response.

   It is possible a class action against the developer please send me an email if you are interested in order to give you more information

Happy New Year everyone,

I need to visit this place and see for myself what a sham things are.  As a purchaser on Medina Golf and not ME23 I hate to imagine how far in the future we are talking for our development.  Have not heard a whisper from Peninsula.

Has anyone been out there to have a look at "Golf", the photos I saw were scary on here.

Better still, has anyone had any luck with cancellation of contracts as my lawyer can only recommend another at a huge cost and still no guarantees.

On other forums I see that Polaris World clients have been left high and dry despite any bank guarantees.  Correct me if I am wrong but it looks as if Gaspar and his crew have no cash left. 

If this is the case then with the banks as tight as they are, we are never going to get a mortgage, the development facilites i.e. the sports centre, riding centre, lake development, shopping centre and 5* hotel - you know, those small things that might help our appartments to be rented if there was ever any truth in the rental scheme promise are definately not going to be finished, let alone a frickin water station. 

Do I get to go camping at least in my shell of an apartment?

Thanks to all for the posts.  At the very least I need to find a new independent lawyer, mine appears to just rubber stamp anything the developer says.  If anyone has anysuggestions please pm me.

My second solicitor issued a cancellation notice on Medina Golf nearly a year ago now but I'm still waiting for a court date.  My original solicitor like yours seemed to just do what the developer wanted.  So I've not had any luck yet and I think whichever road we take it's going to be a long one.  I am now using the lawyer who advises on this forum, so she would already be aware of  many of the issues involved.

PL - Dont touch Kriado and Kraus..... not unless you want to be robbed blind!

 Russ W:

It is possibe to get justice in Spain. I assure you. I understand there is also many frustrations, specially in terms of timing but as a general rule, with a good legal defence, justice is possible. It is.

Best,

Maria

Hello all.

I hope you had a wonderful Christmas break.

Reading through the forum posts again (now I have some “me” time!!) and having spoken to Margaret over the holiday, there is one thing we are all forgetting.

There WAS a rental guarantee in place – the problems stem from the unfinished development.

The contract is clear where it states the development has to have the proper services – which we don’t have even now. 

I think, with reference to “the looneys” comment that Margaret has failed, I think that is very unfair.  If owners are talking about “camping out in shells of apartments” and with the existing problems, how can we expect people to pay for the same experience?  Personally I think she did a great job under very difficult circumstances and the rental contract signed back in October was reliant on the development being finished to the standard we all bought into in the beginning.  I, for one, think we have lost a very good ally and am pretty sad about it.

Its telling isn’t it that Peninsula, having removed the management company hasn’t said a word since. At least I haven’t heard anything – has anyone else?

What mythical rental programme have they come up with?  Anyone got any info on that?

Where is the rest of our development? The hotel? The shopping centre? The riding school? And how about the utilities and..even more shocking – the water and sewerage?

I think its bang on the button to say that Peninsula, despite all their “we are the best” – have run out of funds to finish it. 

Talking of the stomach for a class action:  Yes, I m up for it.  And have just the lawyer to do it too.  He s ready to take them on and as a class action it will be cheaper for all of us.

Anyone interested, PM me and I’ ll get the ball rolling.

No way am I going to complete, when all Peninsula seem to do is fob us off with more glitzy self serving “newsletters” with no substance.  The one good thing we had going for us (the rental company) is now gone so we’re at Peninsula s mercy.  Well, I m not standing for that!!!!

Hey Vickydee,

Ok, maybe I was harsh on Margaret as she surely hasn't been in a position to rent the apartments.  I have to say though that reading the online advertisements - if you have then you would really get the impression that ME23 was good to go.

The 'shell of an apartment' reference was to my own on Medina Golf mate.  This is not complete and therefore I naturally don't expect rentals yet .  It is ME23 clients who so far are the ones seriously out of pocket and I am speaking for here so apoligies again if I have offended any of you.

The main thing management can do to get us on side is show honesty and integrity.  I'm afraid that we have been shown little of these qualities.  Why didn't Margaret send out a letter to owners simply saying that due to the lack of progress and facilities on the resort she would be uable to rent apartments until further notice and arrange suitable compensation for those who have completed and may be struggling to pay mortgages. 

Likewise Sharon should have given owners a good honest heads up on dates when properties would be ready to rent.  Instead we received notice that many companies had come aboard and ME23 would soon be set to rent............. soon...............soon.................

http://www.eagleyerentals.com/details-page.aspx?id=619 

http://royalpeninsula.net/medina-elvira.html

I'm not being funny guys but above is Royal Peninsulas OWN website stating that things are ready and they are taking rentals at £600 plus a week 

I am glad you also have a proper contract for your rental as many others haven't seen this. Is there any chance of a link to download this document please?

Nowayhose - pm coming your way after my dinner.

Guys - I thought this might interest a few of you (found it on this sight - the very bottom bit (without a guarantee) probably applies to most Medina 'Golf' purchasers:

Please note that the information provided in this article is of a general interest nature and intended as a basic outline only. It is not intended as any substitute for detailed legal or other professional advice specific to the reader’s circumstances. Nothing contained in this article should be seen or taken as the writer or publisher providing legal or financial advice.

Without any intended insult to the text of the Old Testament, the sub-prime disaster in the US begat market jitters, market jitters begat the collapse of age old financial institutions, the institutional collapse begat the credit crunch and the credit crunch begat the withdrawal of project finance. Sprinkle lightly with a reduction in demand and an over supply and what do you have Spanish property developers falling off the perch, howling about liquidity issues and seeking creditor protection under the Spanish equivalent of Administrative Receivership (as in the UK) or Chapter 11 (in the US).

In the last month a company owning most of projects of the Grupo Jale, a major developer on the Costa del Sol, and Grupo Sanchez – equally big on the Costa del Sol - entered into Administrative Receivership and this week we heard that San Jose with projects in Murcia has sought similar protection.

Obviously in an already changed market, awash with fears for the security of hard earned money invested in Spanish property, this is not great news.

But where does this leave the property purchaser?

If you have already completed it is likely that your developer may not have sold his entire stock of properties at your new Urbanisation. This means that the developer will also become your neighbour, a member of your Community of Owners and be as responsible as you for their share – their quota - of community fees.

However, the effect of the appointment of an Administrative Receiver over the assets of the company will mean that your Community’s will be required to deal with the office the Administrative Receiver and no longer with the developer themselves. Any subsequent sales of properties at your Urbanisation will generate cash for the Administrative Receiver’s office. This will be used to pay out secured creditors – including the tax and social security offices – but it will also provide cash flow for the continuance of the company under the creditor protection. This means that the developer’s employees – for example - will continue to be paid whilst the company attempts to trade its way out of trouble.

As a consequence, it is likely to be necessary to call either an Extraordinary General Meeting or an Annual General Meeting in order to protect the Communities position in respect of the unpaid Community Fees. I am told that only after these have been voted upon at the EGM or AGM will it enable the Community to enforce the unpaid fees as a debt against any incoming purchaser and thereby collect the unpaid balance. This may be an unpleasant surprise for the incoming purchaser – who’s Abogado should have advised them on such matters and checked with the Secretary of the Community whether any such fees were outstanding. But the legal position appears to be only once the unpaid fees have been voted upon and passed into the Minutes of the Community that following a purchase will the incoming purchaser be obliged to assume responsibility for the unpaid fees. This should benefit the Community.

Alternatively, another potentially interesting scenario is starting to emerge – and we are seeking detailed legal advice on this point as I write. If like any other owner, the developer fails to pay their share of the community fees; will the remaining members of the community – probably a majority – be able to take legal action to recover the debt against the developer? Further should they be successful in obtaining judgment will the Community of Owners be able to obtain an “embargo” over the property to the extent of the Community Fee debt? As a consequence, will the Community then be able to progress to a “subasta” or auction sale of the defaulting owner’s property to realise the unpaid Community Fees? Will this create an interesting new market of distress stock – whereby willing purchasers can acquire finished property at a knock down price?

We believe that this may be relevant where the developer, as is usual, has established an individual company vehicle to develop and sell a particular development. If they have sought creditor protection for only a member of the group of companies – rather than the individual development company - then the moratorium which prevents creditors taking action against the group member but may not apply to the individual development company. Careful review by an appropriately qualified professional is required as group wide creditor protection may operate to prevent a challenge by the Community of Owners.

What if you have not yet completed your purchase but you have paid over your deposit on signing your Private Purchase Contract (PPC) plus – possibly - several stage payments?

Under the terms of the PPC that you have signed, you will usually be acquiring an option to purchase the property at completion. This is not a property right as such but a debt owed to you by the development company with whom you’ve signed your PPC. As in English law, there are different categories of creditors. These include: “Secured” creditors who have registered charges against the development company’s assets probably by way of mortgages or other loans – often manifested in an up to date Nota Simple of the property - the Spanish state tax and social security offices; “Favoured” creditors such as the company’s own employees and “Unsecured” creditors.

Until completion it is usual that a property purchaser will be an “unsecured” creditor of the developer. This means that your rights in respect of your cash as deposited with the developer will mean that you rank behind the “secured” and “favoured” creditors.

Spain has a developed and legally backed system of Bank Guarantees (Aval Bancario). The Law 57/68 establishes a system of bank guarantees - or insurance policies - to protect the amounts paid by the buyers in case of the developer’s failure to complete the development.  The aim is to ensure that you do not lose your money should the property not be built for some reason. This is usually offered by the main funding bank which has provided the developer with their project finance.

In practice, bank guarantees may not always reach the require level of protection as envisaged by the law. In our experience they need to be studied very closely to ensure that they are valid, up to date and signed by all relevant parties. To give you added comfort, you should seek from your Abogado written assurance that they have hold original versions of up to date – amended to include your deposit funds and any subsequent stage payments - fully signed and original Bank Guarantees from the developer’s banker.

Should you find yourselves in a position where your developer has announced that they are entering into a formal creditor protection arrangement or they have filed for, Administrative Receivership, voluntary liquidation or similar you should consider whether it’s appropriate to give your Abogado instructions to seek to call upon the bank’s Guarantee. Whilst it may be difficult in practice to invoke this guarantee – it will usually require the intervention of your Abogado and possibly formal court proceedings – which may prove costly – it should provide you with long stop protection in the event of the collapse of the developer that results in the property not being constructed or completed.

It is not the intention to overly simplify this process and for one reason or another it is likely that the bank providing the guarantee – given the current financial climate - may seek to delay honouring or even refuse to honour their guarantee - so ensuring that your Bank Guarantee arrangements are at all times in “apple pie” order is very sound advice.

If you developer does not appear to be in financial difficulties we’d recommend that you review your Bank Guarantee arrangements in any event. A difficulty often arises if a date of expiry of the Bank Guarantee is specified on its face. Such a date may be an “in any event” date meaning that the Bank Guarantee will expire whether or not the property is “legally” completed. You should check with your Abogado to ensure whether such a date is stated in your case and he/she should apply to have them renewed before they expire. It is usual that the developer and the bank will need to sign each Guarantee and any extension to it which in our experience may well not happen if the developer and their financier are in dispute over other liquidity issues.

I have been approached by some purchaser’s saying that their Abogados failed to advise them in relation to a Bank Guarantee. There may be one of two scenarios here. Firstly, the Bank Guarantee was issued in the usual way - as is required by the law - but for some reason the Abogado just didn’t give the purchaser a copy. In which case, a note to your Abogado’s office should reveal its whereabouts. Secondly – and of much more concern – is where either the Bank Guarantees has not issued for a variety of reasons. This may include that they were not requested by anyone including the purchaser’s Abogado, were not offered or that they were issued and have now expired. Whichever way fully independent professional advice should be sought as to your available remedies against your advisors and the Administrative Receiver – or similar.

Finally, and this sounds like total stupidity, if your property is pretty much completed – snagging done etc. - but lacks - for example - the final formal licences from the local Town Hall – particularly the License of First Occupation (LIFO) - but – and this is an enormous but – your developer is threatening to file for creditor protection, Administrative Receivership or similar, it may be worth considering – if you are in a position to do it – to complete on your property in any event. For obvious reasons, care and professional advice must be taken if you are considering upon such a strategy – it may well be a massive gamble – e.g. the LFO may never be granted - but the net result of such completion will mean that the property is registered in your name. Instead of a debt owed to you by the developer you will have a property asset with an enforceable title.

 Hi Looney,

Interesting post, do you have a link to the original article? I would like to make one point; from my understanding of postings in the Bank Guarantees Message boards (www.eyeonspain.com/forums/Threads.aspx), a bank guarantee can not expire. Maria explains this here www.eyeonspain.com/forums/posts-long-9184.aspx, and others have also won back their deposits with out of date BGs (www.eyeonspain.com/forums/posts-long-9269.aspx). So if you are unhappy I would strongly suggest that you talk to someone like Maria - you may be in a better position than you think.

Happy New Year!

AIS

http://www.eyeonspain.com/spain-magazine/developer-goes-bust.aspx
 

It looked comprehensive so I thought it would be good info.  I have had differing opinions from different lawyers and on the Polaris forum the clients the are certainly having trouble without the guarantees.

I hope you right on that point though as they development initially had a guarantee which has now run out according to my lawyer.  Hefailed to renew it when requested and says it would be impossible to get one now.

I will ask Maria to comment on this as she seems pretty switched on.  It's unlike this site to place a major article like this though.

 Once a company enters into insolvency status, if you are an off plan purchaser:

- With Bank Guarantee: You can execute it, if the contract has been breached in terms of completion deadline, for the refund of deposit plus legal interests from the Bank or Insurer. No expiration deadline counts. No limit clauses in the text of the Gurantee as rights provided by Law 57/68 cannot be waived. In most of the cases a litigation is needed.

-Without Bank Guarantee: First step is to register your credit before the Commercial judge governind the insolvency situation and if you want to cancel, you need to direct a cancellation notice against the developer under administration. If you obtain a favourable Court decission but you cannot 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.

Maria - absolutely outstanding thank you.

Please do not forget  that  Bank Guarantees and Insurance Policies do no expire and that... tomorrow is a Feast Day in Spain: Three Wise Kings.

An specification on expiration of these guarantees: just if you have an Insurance policy, you need to claim within 2 years from the insured event. Being insured event the moment when completion deadline arrives and the property has not been handed over to the off plan buyer.

Best regards,

Maria

 Just to clarify; if your completion deadline was say summer 2008 then you would need to claim by summer 2010? And by "claim" do you mean court action, or simply writing to the developer asking them to execute the BG?

Many thanks,

AIS

We have already completed in ME23 and now wondering what our options are - probably more limited than those who have not completed yet - trying to get information from our lawyer and peninsula isn't getting us very far.  Are there any others who post here who have already completed? Has anyone got anywhere with engaging a lawyer who is able to help?  Clearly it would be better all round if the development could be completed and we are all winners - our apartment is furnished and when we visited in June 09 both the property and the site were looking great, with the unseen problems (water, sewage & lifts etc) not at all obvious to us - but it seems to be impossible to find out exactly what is happening.  I'd be interested to hear from anyone who has got anywhere with looking into a class action whether owners or not & how this is progressing. Paying a mortgage on a property we can't use and possibly worthless too - not a good feeling!