CAJA RURAL liable of refunds in Eurohouse, Fortuna development

http://www.eyeonspain.com/blogs/costaluz/14241/legal-tip-1243-new-case-won-against-eurohouse-and-caja-rural.aspx

Inspiring principles of consumer protection, constitutional right to housing and principle against formalistic interpretations in detriment of the consumer, guide the recent Court decision won by CostaLuz- DeCastro teams in Orihuela. Received yesterday at the Law Firm. Today being sent to clients.

The defendant, CAJA RURAL, says the Decission, “has not complied with its obligation to ensure the provision of individual guarantees for the repayment of amounts paid on account by buyers”.

“(…) despite financial institutions are not parties of the sale contract between developer and purchasers, they are not alien for their content or the performance of the obligations arising thereof, as it should ensure that there is compliance with the guarantees established by law 57/1968.” The possibility of controlling sale contracts reveals its obligation to monitor compliance with obligations under the law 57/1968.”

“Therefore, whoever buys a house in these developments acquires its insured status from the time of conclusion of the contract with the developer, and cannot be affected by breaches of the developers in regards to constitution of the guarantees.”

“ It should be remembered that the legal mandate is clear, stating that the bank that receives the sums advanced by the purchasers of homes must  (1)deposit them in a special account;  (2) these quantities can only be used for the purposes of this promotion and (3) must ensure, under its responsibility, that they are guaranteed. Therefore there is a clear responsibility which is originated in the failure to Article 1 paragraph two of Law 57/1968, because the bank violates the legal obligation to require the provision of sufficient security; breach that law narrows under its responsibility.

“Case Law of our Provincial Court understands that the agreement reached in a bankruptcy proceeding, even if it was endorsed by one or any of the buyers, does not extinguish the guarantee.”

For all the arguments above, bank is condemned to pay all principal amounts, plus legal interests from the moment payment was made to the special bank account plus all legal costs.

 Congratulations to clients, Judges and Lawyers Teams.

Excellent news for Eurohouse buyers and a very good LEY 57/1968 Sentence from the Judge in Orihuela!

Congratulations to all concerned, may there be many more positive outcomes regarding Ley 57/68. 

Congratulations....well done to CostaLuz and all the team. :)

May I ask Keith/Maria if this ruling would help in any way to the situation where a guarantee existed with a named Bank linked to the developer (and also referenced within the purchase contract), but deposited monies were placed into developer accounts with different Banks to that stipulated in the Guarantee and purchase contract..

(Note No individual guarantees were issued by the Banks where monies were deposited into developer accounts. )

In the event of fully proven developer breach where the developer has subsequently become bankrupt, does this make the Guarantor's Bank ultimately responsible for return of monies to the offplan purchaser, since they were supposed to have set up special accounts for deposited monies related to that developer (in which case they should subsequently be made responsible for regaining monies from the other Banks where monies were placed), or does the responsibility lay with the other Banks (with developer named accounts) that provided no guarantees and were not named in the purchase contract, but were where purchasers deposited monies have been proven to have been placed? Or do all Banks in this scenario become jointly and severally liable?

This is becoming a nightmare!! ;(

Many thanks.

This message was last edited by ads on 19/03/2015.