Just lifting a posting from another thread for all those interested (or maybe confused) by the Bank Guarantee scenario that has impacted so drastically on all too many offplan purchasers. I hope I'm forgiven for repeating it here but I considered it relevant to this thread also.
I suspect that many purchasers who completed on developments where developers were in breach of contract, were either under pressure from lawyers/agents who were not independent from the developer, or they had been given wrong information regarding their legal rights for breach of contract, and felt that they had little option but to complete.
Most likely, many lawyers who had not ensured that Bank Guarantees were in place, were in fear of repercussions if the purchaser found out that the contractual agreement for provision of the BG lay with the Banks and that they (the lawyers) had not ensured that this provision was in place (as per the contract) prior to signing the contract, nor had they ensured that purchasers deposited monies had been placed into secure special Bank accounts as per the Law 57/68. These are the laws, which Maria and others are now using to challenge the Banks, to ensure Banks are made accountable for offplan deposits.
All the more reason for us now to push for correction to the system, to ensure that purchasers know their rights and the Banks obligations with regard to offplan purchase, to ensure that legal professionals no longer remain in ignorant bliss (if this is the case), to ensure that purchasers no longer should deal with lawyers who are not independent of developers, and thereby gain transparency throughout the real estate industry which should benefit all good professionals in the longer term, and likewise ensure accountability by all those responsible for their actions.
In some cases I suspect lawyers who fell foul of this have endeavoured to put good their ignorance/mistakes by following through with breach of contract cases. Yes, some may argue that this lined their pockets, but the reality is that what should have been a straight forward case of claiming return of monies against Bank Guarantee for those who had suffered breach of contract by the developer, instead found themselves without a BG necessary to effect speedy return of their monies (all of which was illegal I might add as according to Maria the Banks were entrusted to protect purchasers’ deposited monies relating to offplan purchase from the outset).
And here is where the abuse continued. Many of those who chose not to complete on substandard properties or other forms of breach of contract, without BG's in place, then followed through the procedure for breach of contract against the developer (under advice from their lawyers) and had to face not only a costly route for justice, but also to add to their sense of injustice and horror, the existing Spanish justice system failed them, so they endured lengthy procedures, with little guarantees of return of monies due to major administrative delays, and in some cases inconsistent judgements.
And the end result? Developers then abused the system further to ensure that they placed appeals knowing more delays would ensue, and what did many developers do in the interim? Yes they asset stripped while the delays grew and grew, and thereafter lived in the hope that many could not afford to continue their fight for their legitimate return of monies as per their cases for breach of contract, that ironically by this stage had been proven via court judgements in the purchasers favour. In the interim once cases had been won for breach of contract, the lawyers placed preliminary embargoes to ensure return of monies as per the successful judgements (frequently this included costs and interest in the purchasers favour). BUT, the legal system failed them YET AGAIN, as the delays then resulted in embargoes being ineffective (no liquid assets left to embargo) or the developer went into administration before the embargo was able to be implemented . All, I might add, because of failures within the legal administration system.
As for those who find themselves in the unenviable position of their developer going into administration, who gets first call on any assets?…….yes, you’ve guessed it…… the Banks, who were the perpetrators in the first place. And then the procedure becomes even lengthier (and more costly) as alternative routes are explored......... what a nonsense and how WRONG!
But to add to purchaser's woes (as if that wasn't enough) suggestions are now being made to do deals with the very Banks who were wrong in the first place. The same Banks that placed them at risk from the outset. More nonsense. WE HAVE TO MAKE THE BANKS ACCOUNTABLE.
The failure of the justice administration system in my eyes is the major cause for concern here, as without these delays, legitimate successful cases for breach of contract would have been resolved (at appeal), interim embargoes would have been effected (monies placed into court accounts as per successful legal judgements) thus making the developer accountable for their breach of contract. BUT THE BOTTOM LINE IS THAT NONE OF THIS WOULD HAVE BEEN NECESSARY, had the Bank Guarantee been made available and the monies placed into special accounts as per the Law 57/68 as purchaser's contracts stipulated from the outset.
So where does this leave us?
WE HAVE TO MAKE THE BANKS ACCOUNTABLE.
All need to sign and provide evidence to Keith’s petition www.bankguaranteesinspain.com
The evidence thereafter should ultimately identify all monies owed to purchasers “stuck” within the system and identify abusive timescales that have compromised purchasers for rightful return of monies.
It should identify the numbers of purchasers awaiting return of monies.
And as Keith has rightly and expressly identified we need the following to happen:
1). Any purchaser not provided with the legally required Bank Guarantee is refunded immediately in accordance with LEY 57/68.
2) Any purchaser in possession of a Bank Guarantee, where the developer has clearly defaulted on the contract, is able to execute the Bank Guarantee, in accordance with Ley 57/68 without need for litigation.
3). Fast track courts be established.
4). The Spanish government and Banco de Espana must immediately set up a fund to underwrite the refunds on all Bank Guarantee cases.
5) The Spanish Government and Banco de Espana must act now to ensure the abuse being suffered by innocent off-plan purchasers in Spain is ended immediately and that it is never allowed to happen again.
If the Banco de Espana and Spanish government fail to act within defined timescales on the above issues, then, armed with evidence, we ask the European Parliament and European Commission to take firm and effective action demanding that these very serious financial illegalities are addressed as a matter of extreme urgency.
Keith needs your evidence. Please make it available via his petition www.bankguaranteesinspain.com .
Keith can’t say it any clearer than that…