HI Martin
I have only recently registered on this site but saw you question and felt living in spain I should help answer this question.
The developer was in breech of contract as soon as delay reached more than 6 months. I think if i remember it was supposed to be finished no later than December 2006 and it took i think until October 2007 before they finished the building, so yes it does mean you can sue unless you have already sued.
Hope this helps
Roxy42