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A new Consumers Act in force since December the 1st 2007 stablish a right to voluntary dismissal in all the contracts which are subject to Consumers regulations and Law. These off-plan real estate contract are of course subject to that.
We are currently studying the Law ( it is very new) and will send an abstract of new rights and features of the Law to you in an article soon. Anyhow if you want to make specific questions regarding this right or any other which mat be contempleted in this Act, please post.
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Sounds like consumers will have the right to cancel within a certain period ie 14 or 21 days! I certainly hope so as it came in for timeshare sales and seems to have done the trick in not catching holidaymakers out!!
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Quite frankly m'dear, I don't give a damn!
www.herbalmarbella.com
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The completion of our spanish off plan property is imminent. However, due to various financial reasons we cannot complete. we have made all the payments (30% of purchase price) required so far. If we fail to complete could there be any further financial penalties (and/or stress at the solicitors!!) or would we just lose the money invested so far.
Any feedback would be most welcome!
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Your failure to complete can just be punished with a penalty clause if developer has scrupulously met all his legal, contract obligations? Is it the case?:
-What is the completion deadline in your contract?
-Was it met?
-Is the house exactly what you contracted for?
-Are all the complementary facilities in place too: swimming pools, sports, commercial facilities....if some were included in the contract/publicity?
Also know that in a vast majority of cases, penalty clauses mentioned in these contracts are abusive according to Consumers Law.
Best wishes for 2008,
Maria
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Dear Maria,
Thank you for your prompt reply to this post. I have just sent you a PM with further details of our situation.
Many thanks
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Kind Regards..Pat
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los lagos spain we have just lost a judgement against developers although they did not have planning should we apeal
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This message was last edited by jknight on 4/27/2008.
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Hello everyone,
This particular thread caught my eye, as we have also recently decided not to complete on our off-the-plan property.
Like nik08, we've also made all the payments required so far (30% of purchase price). According to our contract, our apartment was due for completion Dec 2007, however in October we received a letter from the development agents with an annex confirming apartment area and new completion date of April/May 2008. We duly signed the annex and returned it, as we were still anticipating completing at this stage.
In the meantime our (independent) lawyer has had a word directly with the Developer and has been verbally informed that building works should be finished this month, with First Occupancy License obtained in May and signing of Deed over the summer June/July Our lawyer regards this schedule as optimistic as the granting of the License is dependent on the Municipality. In any case ours is part of Phase 1 of a 3Phase development, so it is very likely that the development will be a bit of a construction site until at the very least year’s end…i.e. not that conducive to happy holiday rentals
Our contract also states that if the Purchaser fails to fulfill the payment schedule (which we could interpret as not making the final payment) then the Vendor has the right to retain 50% of monies paid to date. At this stage, (dare I say!) we are willing to pay the penalty, as it is we who are withdrawing from the contract.
Question is: is there a smarter way to go about all this? Does anyone have any experience of this kind of negotiation? What are our chances of getting ANY money back!?
Any feedback most appreciated!
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Hi desertdiamond
Re According to our contract, our apartment was due for completion Dec 2007 I think Maria says if it goes over 6 months (may be wrong so ask her) you can have all money refunded under your Bank Guarantee. Assume you do have a BG ! Maybe you signing that annex will put you in a vulnerable position though.
Maria is a lawyer on EOS & has spoken on this many times. She started this thread so will be alerted to new posts so will comment soon. Good luck.
This message was last edited by morerosado on 4/27/2008.
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Many thanks for your replies! So very glad to have found this forum - we are quite a distance away and this is our first experience with Spain-off-plan...have been rather naive up to this point, I must admit!
Upon request, the selling agent has supplied our Lawyer with a copy of a Bank Guarantee, however it appears it is for the development, not specifically for the payment we have made? Yeah, looking back, signing the annex back in October may have put us in a vulnerable situation, but at that stage we were still planning to complete.
And if the BG is good then we will have to wait it out until end of May, to see if developer is late, before going down that route.
Cheers
dd
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Many thanks for your replies! So very glad to have found this forum - we are quite a distance away and this is our first experience with Spain-off-plan...have been rather naive up to this point, I must admit!
Upon request, the selling agent has supplied our Lawyer with a copy of a Bank Guarantee, however it appears it is for the development, not specifically for the payment we have made? Yeah, looking back, signing the annex back in October may have put us in a vulnerable situation, but at that stage we were still planning to complete.
And if the BG is good then we will have to wait it out until end of May, to see if developer is late, before going down that route.
Cheers
dd
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See, not all doom & gloom, desertdiamond.
Glad you like our forum.
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desertdiamond: you need to ask for an individual bank guarentee ( one for the whole development is like having nothing). Go ask for one and if not provided, you will have your cancellations rights ready for execution.
Best wishes,
Maria
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Thanks very much Maria.
Do I understand correctly from your message, that if they do not provide me the individual bank guarantee, then this would give us the grounds/right to cancel?
All the best,
dd
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Thanks Maria - very interesting indeed!
By the way, we still have not received our original signed Contract of Purchase back yet. We duly signed and sent back to the selling agents in October 2004, and we have been pleading with them ever since to return the same. It is super critical now, as we cannot proceed with obtaining NIE or financing (not that this is now an issue, as we will be withdrawing) without this essential document!
All the best,
dd
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dd
Law in Spain specifies that a promoter selling dwellings and asking any payment before they are completed must take out a bank guarantee or insurance policy in order to refund these advances if the developer does not handover the dwelling past the deadline.
All that money paid plus interest will be repaid to the purchaser even in the event that the promoter does not obtain the first occupancy permit which will be considered as an unfinished completion.
The buyer must have the guarantee in his hands because there are situations where purchasers have been told that and endorsement exists but they have not asked to see it and when the property was not built the deposit is lost, therefore is important to get the original before paying any money even the reservation fee and understand what the document says.
I want to call attention to the fact that the buyer or practitioner does not peruse this important document. Several points should be examined in the analysis of the guarantee offered by the promoter:
1º The expiry date of the endorsement which has to be the day when is granted the first occupancy permit. Many guarantees remain in full force and effect for just a period of time and the problem arises when the property is not finished among this period
2º The guarantor must be a financial institution, bank or insurance company authorized to operate in Spain
3º What is stated in the warrant about the cases in which is possible to execute the guarantee and what will be the procedure for execution
4º Should have the name, passport number, the address of the property.
5º It should be guaranteed each stage payment even the reservation fee
Spanish consumer authorities can fine developers failing on their promise to provide bank guarantees with penalty of 25% of the amount paid by the buyer without guarantee.
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www.fljordan.com
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Desert Diamond:
You need to act quickly to get both contract and bank guarantee ( originals). I have sent you a PM.
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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