Lack of Bank Guarantees. Bank´s responsability. Case Law

Dear TeamGB,

thank you for that, it needs some taking in to try to fit my case of the substandard clothes being offered rather nothing at all.

It is suggested that they can freely offer 10% less and still demand full money with the support of the Spanish courts.

they did not get away with offering Goodstitch less, though as I understand it he was just seeking an urbanisation residence for holiday use , like so many.

As Ads and the firm has pointed out there are some cautionary notes, but I suppose only they can decide what they will take on and on what terms.

I may well approach them.

Thanks again

Norman

Belucky358:

Of course yes. No doubt. If the conveyancer did not ensure all was in place for your protection according to Contract Law, Law 57/68 and Consumers Law... he/she is liable and his/her insurance needs to respond.

Norman

As a cautionary note I think you should do your in depth research regarding this firm (as with any firm) and take independent qualified advice prior to making any decision regarding legal action.

I do not know this gentleman nor his company, I was merely pointing out some of their observations relating to court delays and questions of impartiality re court decisions etc.

It has been suggested that there are links to another company that the gentleman in question appears to be/was Sales Director of, namely Rushcliffe International a British Property Developer in Spain, and this appears to be one of the companies that his company are receiving enquiries about. So might there be a conflict of interests here? Also this gentleman appears to be managing director of Heaven Bay Resort (Turkey). Apparently under the Can I claim tab, if you click on Our Solutions it takes you to the website of Signature International a property developer selling property in Turkey. So might there be a conflict of interests here also?

I don’t want to criticise anybody if they are genuine but I think you need to do some background enquiries before you make any decisions.

Have a look at these links:

http://www.eyeonspain.com/community-forum/20421/vutures-are-circling-but-theres-nothing-to-eat.aspx

http://www.spanishpropertyinsight.com/forums/viewtopic.php?f=2&t=5086

http://www.spanishpropertyinsight.com/forums/viewtopic.php?p=29083

 http://www.hasslefreeguides.com/turkey/aboutus.php

http://www.easier.com/81895-property-bank-guarantees-spain.html

 http://www.offplanapartments.com/turkey_heaven_bay.asp

Maria,

Thank you for your general response to Belucky but there are still many outstanding questions relating to my posting which I think deserve answers, as there are many purchasers who must be confused (as we are) as to the best way forward. We need to understand the wider picture, the realities relating to legal action before we can feel comfortable as to the best legal route to take. At present there are many queries that need addressing before we can say hand on heart that we understand the whole picture.

I would be really grateful if you could therefore respond to every question that I posed within my posting on 19 Jan 2011 17.23. The less answers we receive the more confused we become I'm afraid and we become less confident in taking action.

Maria,      Thank you for the above reply, however before I go down this path is it possible to comment on the feesability of persuing a Bank under the following circumstances............My current lawyer states that my Developer used several Banks in dealing with the money from our complex, so how can I ask a Bank to accept any resposibility when I don't even know which Bank accepted  our deposits ?...............Unfortuately the paper trail goes cold once my deposits were sent to my original lawyer, so I have no way of ascertaining how, where or when, my deposits were forwarded to the developer consequently I do not know what  the Developer did with my money,--- all I do know is that the developer admitted in court that they received the money

Of course yes. No doubt. If the conveyancer did not ensure all was in place for your protection according to Contract Law, Law 57/68 and Consumers Law... he/she is liable and his/her insurance needs to respond.
 

Dear Ads:

Apologies for the delay. Lots of work these weeks.

Please have answers below in bold green ( same text as your email). Please take into consideration that all answers below are our best legal opinion, which can differ from other/ other lawyers:

Dear Maria,

I have some outstanding questions that I would be grateful if you could address, relating to your EOS tip 426 ARE LAWYERS LIABLE?

In order to take action against a lawyer who has been negligent in not providing the required banking details relating to the Bank Guarantee within the purchase contract as per Law 57/68, and thereby not ensuring that the BG was made available prior to agreeing the contract, do you have to have first prove the effects of this negligence by demonstrating a case win against the developer who had breached their contract, or is this irrelevant/unnecessary? It is advisable.

If a case win is necessary, then if the developer appealed that first instance case win, does the purchaser have to wait until an appeal is fully resolved by the judge, before this evidence would be accepted?  It is advisable. Does this process in effect have to be completed before a negligence case could be won against a lawyer? It is advisable

How does legal indemnity come into this action? Does the action have to be taken directly against the insurance company, or is action taken against the lawyer who then reclaims their losses against the insurance company? The claim is done against the Lawyer, previous notice to the Bar Association, the Lawyer will  then request his Insurance company  to support the claim. If the Company refuses, then you wil have a claim against this.

Is there a time limit associated with this legal action?

Is this considered a separate action from the Bank claim route, and as such, for those who have not been provided with a Bank Guarantee, nor been provided with the banking details of where their monies were deposited, does the claim against the Bank then become redundant/ unnecessary?

In the instance where a cheque from the client account was paid to the developer by the conveyancing lawyer representing the client, is this also a negligent act, as the lawyer effectively places the client at risk by losing control at that point of how and where the monies were to be used by the developer? Could in effect the developer pay that cheque into a personal account etc?

Thank you Maria. I do appreciate that you are very busy.

Still some important outstanding questions however:

Is there a time limit associated with this legal action?

Is this considered a separate action from the Bank claim route, and as such, for those who have not been provided with a Bank Guarantee, nor been provided with the banking details of where their monies were deposited, does the claim against the Bank then become redundant/ unnecessary?

In the instance where a cheque from the client account was paid to the developer by the conveyancing lawyer representing the client, is this also a negligent act, as the lawyer effectively places the client at risk by losing control at that point of how and where the monies were to be used by the developer? Could in effect the developer pay that cheque into a personal account etc?

belucky358

You say:

"....so how can I ask a Bank to accept any resposibility when I don't even know which Bank accepted  our deposits" ?

You have to establish the identity of the Bank/Caja who accepted your off-plan deposit before you can consider any action according to LEY 57/68.

You also say:

"Unfortuately the paper trail goes cold once my deposits were sent to my original lawyer",

Is the original Lawyer still trading?  If so, then you must demand that they provide you with a copy of the Bank Transfer document that gives details of the account/bank to which they forwarded YOUR money.  They must have this information.

Kind regards

Keith

Ads.

Answering to you again in bold green ( same text as your email):

Is there a time limit associated with this legal action? Our best legal opinion is that there is one year after every other measure ( action against developer and against the Bank fails)

Is this considered a separate action from the Bank claim route, and as such, for those who have not been provided with a Bank Guarantee, nor been provided with the banking details of where their monies were deposited, does the claim against the Bank then become redundant/ unnecessary? As Law 57/68 clairly says that Banks have liabilities before the lack of Bank Guarantees, I do think that the pathway needs to pass against the Bank first.

In the instance where a cheque from the client account was paid to the developer by the conveyancing lawyer representing the client, is this also a negligent act, as the lawyer effectively places the client at risk by losing control at that point of how and where the monies were to be used by the developer? Yes as per according Law 57/68 the account needs to be known by the buyer, the lawyers is obligued to know this. Could in effect the developer pay that cheque into a personal account etc? He could, that´s what Law 57/68 prevented against and was made for: depositers banks as control agents of off plan businesses.

We have to remember that this is a complex issue and each case is different.  It is very difficult on a public forum to give detailed legal advice relating to each individual case and circumstances.  Much of the information posted has to by nature be very generalised.  Therefore, I would advise any purchaser that before commencing legal action you must take independent legal advice.

I am passionate about the liability of the Banks/Cajas in many of these cases, including my own Finca Parcs Action Group.  However, even though I believe our particular case against Caja de Ahorros del Mediterráneo is very strong I could never promise anyone in our group that success is 100% guaranteed.  This is a relatively new course of action and no one can yet be sure of how the various Judges and Courts will view these types of cases.

In my opinion, firstly before considering taking legal action against the Bank according to LEY 57/68 for their failure to issue a Bank Guarantee it is important that you establish that the Bank, with minimum due diligence, would have realised that those funds were for an off-plan deposit and must therefore be protected according to the requirements of LEY 57/68.

There are several First Instance Court decisions where the purchasers did have Bank Guarantees and the Bank was refusing to honour them, in which the Judges comments prove very interesting, even for cases where Bank Guarantees do not exist.

Also the most significant Case Law to date is the decision in Santander by the Audiencia Provincial Seccion 4 de Cantabria on 25 November 2010.  Although the purchaser had a Bank Guarantee it did not cover all of the deposit paid.  Among the many interesting comments made by Judge were: “The relationship between the Purchaser and the financial entity do not derive primarily from the contract of guarantee but from the Law”.  The Judge also said: “The Law requires the financial entity to guarantee the repayment of all amounts paid in advance though the developer’s accounts for which the financial institution must be vigilant”.  In this case Caja Cantabria was made liable to repay the purchaser all the amounts paid towards the off-plan deposit including interest and NOT JUST THE AMOUNT THAT CAJA CANTABRIA HAD CHOSEN TO GUARANTEE.

The following is by no means an exhaustive list but the points below may strengthen your case against the Bank/Caja should you decide to take action against them for failing to issue Bank Guarantees for off-plan deposits paid to their accounts:

1.  You must prove by way of documentary evidence that your funds were paid to the developers account held at the Bank you intend to take action against.

2.  It would strengthen your case if you can obtain evidence to show that the Bank were the sole financial entity funding the development – although this is not imperative.

3.  It would strengthen your case if you can provide documentary evidence of the Bank’s name and/or logo being used in the official marketing/promotional material for the development.

4.  It would strengthen your case if you can provide a Contract or Sales Agreement which, as required by LEY 57/68, names the Bank/Caja as the financial institution who will be issuing the Guarantees

5.  Ideally your funds should have been paid by you, your Lawyer or the Agent to the Bank by way of a bank transfer and referenced with the purchaser name and plot number.

6.  If your deposit was paid to the developer’s bank account by cheque then you must obtain a paying in receipt for the funds.  The

receipt should have a reference with the purchaser name and plot number.

7.  It should be demonstrated that when the Bank accepted the funds into the developer’s Bank account it would have known with the minimum due diligence that those funds were for an off-plan deposit.  That is why it is important the funds are referenced with the purchaser name/plot number and that they are paid to the Cuenta Especial separate from any other funds held by the developer.

8.  Ideally the account to which your funds were paid will be a Cuenta Especial and having documentary evidence of the Bank issuing Bank Guarantees to other purchasers on the development for funds paid to this same account will strengthen the case.

9.  If the account was not a Cuenta Especial and was only a Cuenta Corriente, then so long as you can prove by way of documentary evidence that the funds were clearly referenced as an off plan deposit then the Bank under its responsibility should have protected those funds according to the requirements of LEY 57/68.  In one Bank Guarantee case a Judge said ‘it is the responsibility of the Bank to ensure the status of the account and not the responsibility of the purchaser’

If you instructed a Lawyer prior to your initial reservation then:

1.  The Lawyer should be acting in your best interest at all times and must not have a conflict of interest.  It is the duty of the Lawyer to check that the Sales Contract complied with ALL requirements of LEY 57/68 prior to advising you to sign it and pay your deposit.  If the contract did not comply with the requirements of LEY 57/68 then the Lawyer should have advised you NOT to sign the contract.  If the Lawyer advised or allowed you to sign a contract that did not comply with ALL requirements of LEY 57/68 then the Lawyer may be negligent and guilty of a lack of professional due diligence.  You may be able to make a claim for damages against their legal indemnity insurance.

2.  If you paid your deposit to your Lawyer then your Lawyer had a duty to ensure that the developer’s Bank account to which they were forwarding the deposit funds was a Cuenta Especial and was the exact same account as detailed in the Sales Contract.  The Lawyer must have documentary evidence of the Bank Transfer to the Cuenta Especial or if they paid by Cheque must have obtained a Bank receipt confirming the funds were paid into the Cuenta Especial as detailed in the Sales Contract.  If your Lawyer sent your funds to an account which was not detailed in the Sales Contract and did not comply with the requirements of LEY 57/68 then they may be negligent and guilty of a lack of professional due diligence.  You may be able to make a claim for damages against their legal indemnity insurance.

3.  Prior to forwarding your deposit to the developer’s Bank account the Lawyer should also have evidence that the Bank Guarantee will be issued.  If subsequently the Bank/Developer fail to provide the Bank Guarantee then the Lawyer should provide evidence to show that they took all reasonable steps on your behalf to demand that the Bank Guarantee is issued.

Again, it is important to remember each case is different and before commencing any legal action you should take independent legal advice.  It is vitally important that a competent Lawyer reviews all your documentation & evidence prior to making an assessment of your case.

Kind regards

Keith

Thank you Keith and Maria for further explanations. I am really grateful for this clarification.

One major question still remains however.

What about the situation where the BG was not provided from the outset, nor Bank account details included in the contract , and the conveyancing lawyer paid the monies to the developer via a cheque, and the Bank that took those monies were therefore unaware of the link to an off plan purchase (i.e. the developer put it into a personal account or something similar un-associated with the development)?? Won't this be argued by the Bank that this was negligence on the part of the conveyancing lawyer and the Bank could then opt out of their obligations by claiming they were unaware of these facts, plus there was no contractual link to forewarn them?

This is critical to many where it might have been common practice for lawyers to pay the developer by this means. Isn't this then a case that is better fought from the outset against the negligent lawyer (insurance) , rather than to find out too late in the day that they should have taken this action earlier? Not to mention the cost outlay in the interim fighting the Bank.

What possible reasons could the lawyer's insurance company state to disclaim this proof of negligency? I do not understand why there is the need to proceed with the route of claiming against the Bank when this major problem occurred due to the fact that the conveyancing lawyer never included this required detail (according to your interpretation of law 57/68) in the contract from the outset.

I would be really grateful for further clarification on this please.

Dear Ads:

Answers below in bold green ( same text as your message):

What possible reasons could the lawyer's insurance company state to disclaim this proof of negligency?  That Law 57/68 estblishes that the legal obligation to ensure that Bank Guarantees/Insurances are in place are  of the Bank were deposits were made. If we prove to the Insurance company that, due to negligency of the lawyer, this legal obligation by the Bank has ben impossible to track, the case is, under our legal opinion, much stronger.  Tort actions in our system are very strict with two facts:

- effetive damage

-cause-effect relationship between action/negligence and the proved damage

I do not understand why there is the need to proceed with the route of claiming against the Bank when this major problem occurred due to the fact that the conveyancing lawyer never included this required detail (according to your interpretation of law 57/68) It is nout our interpretation, it is what Law 57/68 establishes very clearly. As a reminder, please have translation of law 57/68 in Keith´s petition:in the contract from the outset.

I would be really grateful for further clarification on this please.

The need

Thank you Maria,

And if the conveyancing law firm refuse to provide the Banking information when requested on several occasions, is this still not enough evidence to immediately proceed with action of negligency against them?

Ads:

It will be one of the evidences to be brought in the action against it, at the right moment.

Dear Maria,

Just in case it becomes obvious that we have exhausted all avenues to claim our lost/stolen money back from either the Developer ( who has gone bust) or the Bank ( which we are unable to positively identify) and we are now left with our negligent  Spanish Lawyer.           Is it possible for you to answer the following questions please :-

1)  Are all practicing Spanish Lawyers compelled to have Professional Indemnity Insurance ?

2)  If the answer is NO, is there an uninsured lawyers claim service ? ( similar to the U.K. motor vehicle insurance, for innocent parties to claim, if the are hit by an uninsured driver )

3)  If the answer is YES how do we obtain proof of this Professional Indemnity Insurance, will it show if it is valid, current,  what conditions it covers, what it doesn't, and the Company who supplied it ?

4)  Would any claim be a matter of writing to the Insurance Company or would it involve a Court case ?

Thank you in anticipation.

Dear Belucky:

Please have answers below in bold green ( same text as your email):

1)  Are all practicing Spanish Lawyers compelled to have Professional Indemnity Insurance ? Yes, for their registration at the corrsponsing Bar Association.

2)  If the answer is NO, is there an uninsured lawyers claim service ? ( similar to the U.K. motor vehicle insurance, for innocent parties to claim, if the are hit by an uninsured driver )

3)  If the answer is YES how do we obtain proof of this Professional Indemnity Insurance, will it show if it is valid, current,  what conditions it covers, what it doesn't, and the Company who supplied it ? Through the lawyer himself or his Bar Association.

4)  Would any claim be a matter of writing to the Insurance Company or would it involve a Court case ? It should be a matter of just going to the Insurance Company.

My name is Charles Knapper and I am a partner in a firm of solicitors in Plymouth who recently took Alberici to court and obtained substantial damages and costs against both Alberici and Robert Plane for my client.  The fight goes on because Quinn appear to have declined the claims against her indemnity insurance policy but will not give a reason why. 

I was also instrumental in bringing the matter to the attention of the Solicitors Regulation Authority and as a resuit she was struck off on 3rd February 2012.  I have a copy of the determination from the Disciplinery Tribunal in a pdf format but is is rather long.

Quinn have recently indicated that they were waiting for the publication of the reasons as to why she was struck off.  Of course those reasons have been publised so they should now make a decision.  I suspect they will still decline the claim leaving the option of a Third Party (Rights Against insurers) Act claim against Quinn or the Solicitors' Compensation Fund.

Hi KC,

Please excuse my ignorance but I am slightly confused as to why you have posted on this thread ??

Are you saying that  you deal with Spanish Legal problems ??

I am unfamiliar with "Alberici" , "Robert Plane" and "Quinn"  and who is the "Solicitors Regulation Authority"  ??

Cheers