Calicia Public Attornet punishing Banks in off plan disasters

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26 Jan 2015 12:17 PM by mariadecastro Star rating in Algeciras (Cadiz). 9419 posts Send private message

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Legal tip 1256. NEW! Galicia Economic Crimes Public Attorney punishing banks in 57/68 developments 
26 January 2015 @ 12:16 
 

Different angles of the protection law 57/68 is for off plan buyers in Spain is being exposed and applied. So very good news.

In relation to  recent Court Decision by the Supreme Court by which a bank is condemned to refund full mortgage payments and related interests paid by an off plan buyer whose unit wasremortgaged by the Bank in favor of the developer, knowing there were buyers of these; now, in Galicia, this  Economic Crimes Attorney, Augusto Santaló, just speaks up for those affected by the collapse of developments along these crisis years and state the bank should be ultimately responsible and accountable to the dozens of  deposit payers in these scenarios, based on Case Law of the Appeal Court of Burgos who ruled in three judgments in favor of those affected and against financial institutions.

Developer proceeded to sell homes receiving all or a significant part of the price of thesewithout a guarantee required by law. Later on sales and after price perception by buyers,developer created mortgage securities with Caixa Galicia and Caixanova, "seriously damaging the rights of buyers who were unable to get their money back,"

For the Economic Crimes Attorney, such liability is deducted from the knowledge they had when they provided mortgage loans, knowing of the existence of private contracts of sale and payments made in advance. It also warns that banks did not require or found that the developer constituted the guarantees established by law 57/68 and, being aware of the crisis of the company, decided to refinance with redistribution of liabilities on property units so that the amount of these exceeded the sales price.

If this thesis of the Economic Crimes succeed (and there is already a precedent by the Supreme Court), hundreds of people affected in this and other developments which were unfinished due to the bursting of the bubble or passed to the SAREB could undertake civil and even criminal proceedings to recover the advanced payments which in many cases exceeded 50,000 Euros.

 Judicial sources interpret the general timeframe for presenting a lawsuit will be 15 years from date of payment.

 


_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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26 Jan 2015 2:57 PM by ads Star rating. 4134 posts Send private message

Good news Maria. Thank you.

Under the assumption that developers have breached their contract and cannot meet their financial obligations to return monies to the offplan purchaser, could you please clarify the following (with emphasis on Bank appeals).

Does this now mean that the Supreme Court have finally recognised the wider principle that BANKS who funded offplan developments have a legal obligation according to Ley 57/68 to comply with the requirement that BANKS should have checked that all developers (whom they financed for these offplan developments), had made provision for legal Bank Guarantees and secure accounts, and that these should have been made available to all offplan purchasers associated with any given offplan development? Thus making the Banks ultimately responsible for return of deposited monies for non provision of legal BG's.

Does this now strengthen the legal argument that Banks should not be able to appeal against successful first instance rulings in all cases where legal BG 's and/or secure accounts were not made available?

Also, does this equally strengthen the legal argument for those who were not provided with legal Individual Guarantees but a Generic Bank Guarantee existed? Will the generic BG still be honoured in the eyes of the law without fear of ongoing appeals by the Banks?

The question then remains at what point does the conveyancing lawyer have legal obligations to ensure that everything is in compliance with Ley 57/68? Can the Banks in any way suggest that the conveyancing lawyer was equally responsible for not checking that legal BG's existed, in which case should all cases against Banks include conveyancing lawyers as being jointly and severally responsible with the Banks? My concerns relate to ongoing appeals by the Banks. For instance, could this implied joint responsibility be used by the Banks as a means to appeal succesful rulings against them, thereby further delaying justice for the innocent offplan purchaser?

Where does this leave all those with lawsuits against Banks, already submitted into the legal system? Does this leave clients vulnerable to further appeals by the Banks, or does this Supreme Court ruling in principle now mean that appeals will be denied, given that the Supreme Court now recognises ultimate responsibility for return of deposited monies lies solely with the Banks?

 





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26 Jan 2015 3:14 PM by mariadecastro Star rating in Algeciras (Cadiz). 9419 posts Send private message

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Ads:

Answers below in bold green:

Good news Maria. Thank you.

Under the assumption that developers have breached their contract and cannot meet their financial obligations to return monies to the offplan purchaser, could you please clarify the following (with emphasis on Bank appeals).

Does this now mean that the Supreme Court have finally recognised the wider principle that BANKS who funded offplan developments have a legal obligation according to Ley 57/68 to comply with the requirement that BANKS should have checked that all developers (whom they financed for these offplan developments), had made provision for legal Bank Guarantees and secure accounts, and that these should have been made available to all offplan purchasers associated with any given offplan development? Thus making the Banks ultimately responsible for return of deposited monies for non provision of legal BG's.

Supreme Court has yet not set Jurisprudencia on this. Alwways know that liability of provision 1segundo of Law 57/68 is of the Bank which received buyers amounts.

What the Supreme is saying in this recent Court decission is that the Bank overmortgaging properties without caring for buyers rights, clrearly known of buyers off plan deposits as it had issued a line of Guarantees in same development

Does this now strengthen the legal argument that Banks should not be able to appeal against successful first instance rulings in all cases where legal BG 's and/or secure accounts were not made available? Appeal is part of the fundamental right to Court protection.

Also, does this equally strengthen the legal argument for those who were not provided with legal Individual Guarantees but a Generic Bank Guarantee existed? Will the generic BG still be honoured in the eyes of the law without fear of ongoing appeals by the Banks? It is not related. The Generic Bank Guarantee is a Guarantee per se.

The question then remains at what point does the conveyancing lawyer have legal obligations to ensure that everything is in compliance with Ley 57/68? At the point of paying clients amounts into developers bank account. Can the Banks in any way suggest that the conveyancing lawyer was equally responsible for not checking that legal BG's existed, in which case should all cases against Banks include conveyancing lawyers as being jointly and severally responsible with the Banks?  They are different type of liabilities. My concerns relate to ongoing appeals by the Banks. For instance, could this implied joint responsibility be used by the Banks as a means to appeal succesful rulings against them, thereby further delaying justice for the innocent offplan purchaser? Just if this was part of the First Instance discussion and they argued and proved they provided an individual Bank Guarantee to the lawyer.

Where does this leave all those with lawsuits against Banks, already submitted into the legal system? Does this leave clients vulnerable to further appeals by the Banks, or does this Supreme Court ruling in principle now mean that appeals will be denied, given that the Supreme Court now recognises ultimate responsibility for return of deposited monies lies solely with the Banks? Yes, Bank´s liabilities in regards to control of existence of Bank Guarantees is being reinforced so this is nothing else but GOOD NEWS for people with actions against Banks using Law 57/68.



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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26 Jan 2015 3:57 PM by ads Star rating. 4134 posts Send private message

Thank you Maria.

With regard to the following:

"Supreme Court has yet not set Jurisprudencia on this. Alwways know that liability of provision 1segundo of Law 57/68 is of the Bank which received buyers amounts.

What the Supreme is saying in this recent Court decission is that the Bank overmortgaging properties without caring for buyers rights, clrearly known of buyers off plan deposits as it had issued a line of Guarantees in same development"

So long as there is no Supreme Court jurisprudence on this wider principle for Banks to be ultimately responsible for return of deposited monies when they have placed purchasers at risk by not complying with the required checks, does this still leave clients vulnerable to contra legem rulings by the judiciary?

 


This message was last edited by ads on 26/01/2015.



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27 Jan 2015 3:44 AM by ads Star rating. 4134 posts Send private message

Also, Maria, with regard to the following:

"Does this now strengthen the legal argument that Banks should not be able to appeal against successful first instance rulings in all cases where legal BG 's and/or secure accounts were not made available? Appeal is part of the fundamental right to Court protection."

Why then is the Supreme Court denying admission for appeal for purchasers exposed to contra legem appeal rulings (such aspects as non recognition of illegal extensions/illegal BG's/non provision of LFO according to mutually agreed end dates as per contracts, aspects associated with legal certainty and adherence to European directives relating to unfair terms in consumer contracts to the detriment of the consumer, etc)? Is this not in itself a failure to recognise purchaser's fundamental right to effective judicial protection?





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27 Jan 2015 12:59 PM by mariadecastro Star rating in Algeciras (Cadiz). 9419 posts Send private message

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Casacion is a second grade appeal, special appeal with restrictive criteria of admission.



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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