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It has been so refreshing to read these Court Decissions among recent Case Law in Spain:
1. Bank condemened to annull second guarantees which were set-- by Bank imposition and the safeguard of just its own interests-- on properties which were being bought by individual buyers in an off plan process. Refunds to buyers of non duly amounts to be made by the Bank. Applicable to those of you who are paying an extended mortagge which was imposed on you after you signed the off plan private contract. We have several cases like these among our clients. Good to have this recent Court Decission.
2. Sale cancellation for planning problems ( illegal properties) produces the cancellation of the linked mortgage. Useful for those of you who are paying a mortgage on an illegal property.
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Would this case law re annulling 2nd BG's (safeguarding Banks own interests) also apply to those where purchase contract end dates were not met and Banks issued a second BG (the first being an illegal BG not recognised in Spain), with an "effective-from" date that extended beyond the mutually agreed completion date as per the purchase contract (unbeknown to the purchaser), in their attempt to prevent enactment of the BG on the previously mutually agreed completion date as specified in the purchase contract?
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More good news Maria. Would you be able to provide any detail on the second point? This is exactly our situation, we have a mortgage on an illegal property and we expect the licence of first occupation to be annulled by the criminal court. In this case we should be able to cancel our mortgage and seek a refund of payments already made, is that true? Thank you.
This message was last edited by hosilverlining on 16/08/2015.
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Ads: Facts you are commenting are differnt to those of the Decissions we are commenting on this thread.
Hosilverlining: You are correct. This decission would apply to your situation.
_______________________
Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Thank you for the clarification Maria.
So issuance of a 2nd BG by the Bank per see which was purely safeguarding the interests of the Bank and developer as opposed to the buyer is not covered in general by this particular ruling.
In the case of Hosilverlining, would this mean that the purchaser, (although refunded of all mortgage payments to date and cancellation of the mortgage) would be ultimately left with an illegal property that could not be legally sold or rented?
This message was last edited by ads on 17/08/2015.
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I am leaving for a break with the family till August 27th. Will be answering more on this then.
Cheers
María
_______________________
Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Hi Ads, thanks for your interest.
We have already been advised that if the LPO's are declared invalid we will be in exactly the same position as someone who did not complete, and be able to cancel our purchase contract and reclaim deposits under Ley 57/68.
We fully expect the licences to be declared invalid, indeed several purchasers who did not complete have already reclaimed deposits and in some cases the Town Hall have confirmed in court that the properties were never completed (due to incompletion of basic services such as water and sewage works). As we completed on the basis of the LPO which turned out to be worthless, we have to wait for the outcome of the criminal case in which we are named as injured parties before we can start our reclamation process.
What I was unsure about was the legal situation regarding our mortgages, but María's helpful information clarifies that there is a legal precedent for cancellation of our mortgages and refund of monies already paid.
So we hope eventually to be totally free of the properties, there are 46 of us in the case and a few other owners who didn't join the case but will be keen to see the outcome.
I would like to find out the case law details - case reference etc. but as our criminal case will not be heard in court until early next year, I am happy to wait for María to return from holiday.
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Hosilverlining,
I sincerely hope that you all achieve justice for what must be a lengthy and very stressful period.
May I ask is the ongoing criminal case against a developer or does it extend to other parties?
Maria,
Have a well earned rest with your family! ;)
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Thanks Ads.
The accused are several developers (it was planned to be a large resort, the original developer bought the whole area of land, then parcelled it up and sold on to other developers) and officials from the Town Hall including the then current and previous Mayors, secretary and technical officers. We are sure that one or more of the funding banks at the very least knew what was going on but they have not been accused of anything. The Town Hall officials' defence is that it was all administrative error rather than deliberate actions therefore hoping to escape criminal conviction. The public prosecutor is asking for compensation for the home owners. Check the Medina Elvira Resort forum if you are interested in more detail.
Regards.
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** EDITED - Advertising **
This message was last edited by eos_moderators on 9/9/2015 2:25:00 PM.
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This message was last edited by hosilverlining on 09/09/2015.
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Dear Hosilverlining:
In am sure, as you say, that there are possibilities for actions to be taken against related financial institutions ( either guarantoors or deposits receivers) out of Law 57/68. Couts throughout Spain and Supreme Court are being more and more precise, fair and clear on interpretation of law 57/68 rights in favour of consumers, so no fears. Just pay attention to action deadlines.
Cheers!
María
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Good morning María, I hope you have had a good summer holiday. Thank you for your helpful information.
Could you provide any details of the Case Law relating to mortgages on illegal properties. This would be very helpful, thank you in advance.
Kind regards
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I would be interested too in the recent case law regarding mortgages on illegal properties.
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Basis of those Court Decissions is that as the sale contracts null ( in these casxes due to lack of real contract consent as the buyer did not know on some important features of the object: applicable to illegal character of properties, the attached/linked mortgage is null too.
Effects of nullity are retropositioning to original status: refund of paid amounts plus interests and handing back of property to buyer ( if he still exists). Bank will have important enforcement rights on the property due to pending mortgage so at the end..... another house for the Bank to sell it...at real market price. Losses for them. Burden out of the individual person who was lied to the sale.
_______________________
Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Thank you María
Can you tell us the names of the cases, which court etc. Thank you.
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María thank you for all the helpful information.
I am trying to find out if the possibility of cancelling a mortgage on an illegal property could in any way help in seeking a judgement for suspension of payment of a mortgage pending the outcome of the case which we are sure will confirm that the property is illegal.
We already know that the properties are illegal, many people have successfully reclaimed their deposits using ley 57/68 and the town hall has appeared in court in some of these cases to confirm that the development was not finished and the LPO should not have been issued.
Those of us who completed purchase on the same properties have been advised that we can do nothing until the criminal case is concluded.
The case has now been opened and adjourned. The good news (I think) is that the reason for the adjournment is that the judge has ordered the banks and the town hall to be joined to the case. We believe that this might make it quicker in the long run for us to get our money back.
However, the adjournment means that after already paying our mortgage for 7 years, we have to keep paying for at least another year, and probably more, until the case is concluded. Many of our owners cannot keep up these payments.
It feels as though justice is on the side of those who did not complete but not on the side of those who signed for their property.
Any information or suggestions will be gratefully received,
Many thanks.
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In my opinion, yes, payments can be of course stopped with no increase of interest of any sort. Even all previous mortgage repayments can be claimed back when a purchase on an illegal property has been funded with a mortgage loan
This message was last edited by mariadecastro on 12/02/2016.
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Thank you María, that's very helpful.
Are you saying that the claim for repayment once the property is declared illegal, and also an interim claim for suspension of mortgage until the case is concluded, both can be made under the provisions of Ley 57/68? Or is there another law we need to be aware of.
Thank you
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