Building developers in administration - now what?

Hi all,
Having won our case against the developers several years ago for late completion and won two appeals also, they went into administration.
I now discover that the developers:  Baja en el Fichero E.B.E. Morosidad bancaria y comercial
The solicitor will doubltess explain in due course but can anyone tell me what this means and how this impacts on us.
Although we are listed as creditors, we haven't received any money yet and I have a horrible feeling that this means we won't be receiving any and that the case is now closed. 

Hi, you will not receieve any money now that the builders have gone into administration. The normal legal process is that  people like yourselves are classed as " ordinary creditors "  and you will be bottom of the pile claiming refunds.

Did you receive a bank guarantee when you initially paid your deposit ?

Even if you did not receive such a bank guarantee then there is a legal route to recover your money under law 57/68. But you will need to get in touch with a legal person(s) specialising in this particular route. There have been some successes in this field in the past two years and we are pursuing this course of action because we had the same episode albeit with a different developer on a different location.

It is a long road we are about two years into it now , and will involve some "start up " fees to whichever legal team if you decide to go down this route. But other than that you definately will not receive anything from the current administration process.

best of luck 

Might be worth reviewing Maria's blog 1276 titled New Supreme court rulings Ley57/68 and the comments therein as there are some ongoing queries on the topic which may be relevant.

Had the deposit been paid by credit card, would the card company guarantee be liable for the loss?

Presumably any amounts paid by c/c would ( or should) have been transferred to developer account(s)?

Plus they would (or should) have been witnessed and recognised by conveyancing lawyer with receipt of same?

Not sure how this would stand.... And presumably would have been only a holding deposit not the larger percentages subsequently paid.

Interesting point nevertheless!

This message was last edited by ads on 11/03/2015.

I believe that this may be valid.  In theory, when you settle any bill if you pay the first portion by credit card the credit card company picks up the subsequent insolvency risk for the entire amount paid, even if it was done so by by another method of payment. 

You might want to persue this further Coleen.  I wouldn't get your hopes up too quickly as no doubt there will be exceptions, but certainly worth a bit of investigation.

Please post your findings as this will be relevant to others.

I wonder if Keith (Rule) did any research into this when he looked into the whole aspect of Bank Guarantees? Perhaps he has some observations as to whether existing Law Ley 57/68 plays any part in this i.e. would this Spanish law relating to Bank Guarantees over-ride a c/c company's guarantee in any way or form, or are there financial limits to this scenario? And if so..... would this reinforce the legal arguments for Banks to be made responsible?

p.s. Just came across this informative blog on Section 75 (and 75A) agreements

http://www.moneysavingexpert.com/shopping/section75-protect-your-purchases#exceptions

Also this:

Financial ombudsman site

http://www.financial-ombudsman.org.uk/publications/technical_notes/goods-and-services-bought-with-credit.html#1b

section 75A - when can we help?

Section 75A came into force on 1 February 2011 - through the implementation of the Consumer Credit Directive - but applies to regulated agreements made on or after 11 June 2010 . It supplements section 75, rather than extending it. This note is not intended to provide a full explanation of the law. But put very simply, section 75A will normally have effect where all of these things apply:

• the goods or services were purchased under a credit agreement specifically arranged for the purchase of these goods or services. Credit card payments will not normally be covered by section 75A, because the credit agreement under which a credit card is provided does not relate to the supply of specific goods or services - the card can be offered in payment for anything the consumer chooses;
• the credit agreement is within the scope of the Consumer Credit Directive, but outside the scope of section 75;
• the amount of the credit agreement is not more than £60,260; and
• there has been a breach of contract by the supplier, involving the goods or services not being provided at all, only being supplied in part, or not being supplied as specified in the contract.

Before making a claim against the credit provider under section 75A, the borrower must first take reasonable steps to get the provider of goods or services to settle the claim.

...... perhaps Maria or Keith could advise?

This message was last edited by ads on 11/03/2015.

This message was last edited by ads on 11/03/2015.

As far as I can understand it, this means that the developers have been taken off the debtor's list - not sure if I'm right on that! I can still only think this must mean that if we haven't had any money paid so far, we aren't going to get any.

Any info/suggestions gratefully received!

Sounds like the c/c route is not applicable?

Broph is right that you will be classed as ordinary creditors and ironically the banks will be classed as preferential creditors...... This scenario is exactly why purchasers in this position were advised to go after the banks. Did you have an individual bg, presumably the contract is now cancelled? Was this a large deposit?  Was your lawyer independent from the developer?

Research thoroughly before deciding which route to take for return of monies and if you decide to proceed down ley 57/68 route, only use a lawyer well experienced in ley 57/68 law! Do you have evidence of where monies were deposited? Were they deposited into developer accounts? Is your property in an area where there are major court delays (in which case be prepared for a long fight)? Are you in a region where there have been inconsistent judicial appeal rulings appertaining to ley 57/68 (in which case you will have to weigh up the risks depending on the complexity of your circumstance)?

 All manner of questions arise from this I'm afraid. Might it be worth seeking an experienced second legal opinion? 

Good luck.

I'm not questioning you guys, but I just wondered what a credit card guarantee actually applies to, because the word 'specifically' actually rules out any purchase/arrangement made on a cc.

Coleen:

The fact that developers are now in administration makes your case stronger

Defense of off plan buyers is not within creditor´s meeting regaulations but under Law 57/68, which is being more and more interpreted in detail and in favour of buyers by many Appeal Courts and Spain Supreme Court