What is the responsibility of The Townhall?

We are having problems in Orihuela Costa with our builder who has basically left our and many other urbanisations unfinished, still on builders supply, no certificate of habitation and many properties still with buiders mortgages. In my opinion it is the Townhall's responsibility to bring the builder/developer to task. I enclose an article in today's Coastrider newspaper. It is not as though this rogue builder doesn't have the assetts!!!!!!! I shall be very interested to hear peoples' opinions or indeed clarify just what the law actually states re Townhall responsibilities.

You have been conned...
These were the words delivered by Councillor Jose Aniorte when he explained to Tecnologia Urbanistica homeowners that Orihuela Town Hall could do nothing to help secure their title deeds, yet he offered a solution to others who have been suffering constant water and electricity cuts.
The meeting, held last Friday, was pushed through by the persistent haranguing of PSOE opposition Councillor, Rosa Martinez, who has personally visited a large number of unfinished urbanisations and has been a needle in the side of PP Councillors on this issue. The meeting was originally open to presidents of urbanisations in Orihuela Costa whose inhabitants are without certificates of habitation. However, in what appeared to be a last minute change of plan, Councillor Aniorte announced to the audience that he would be talking about Tecnologia urbanisations only. This angered several people who left the meeting, feeling their time had been wasted.
However, others commented that the good turnout of people at the meeting showed Councillor Aniorte firsthand that the problem of unfinished urbanisations in Orihuela Costa is huge, and not just limited to Tecnologia Urbanistica householders.
For Tecnologia homeowners who have to endure power or water cuts due to non payment of bills by the developer, the Councillor was able to offer a solution of sorts. An arrangement has been made with utility providers, Aguagest and Iberdrola, that from now on, should urbanisations wish to pay their own bills, they can do so. This process will require each urbanisation to hold an Extraordinary General Meeting to vote on the issue. The problems will lie with knowing how much to charge each household, as clearly with no individual meters, the bill will have no breakdown of its own. If an agreement is reached within the urbanisation, the urbanisation president should approach the town hall for further instruction.
In the longer term, Tecnologia urbanisations which are unfinished will now need to be completed by the residents themselves if they wish to gain certificates of habitation and be officially adopted by the town hall. This would also mean water and electricity meters would be installed for each household. Councillor Aniorte explained that the external deficiencies, such as wiring and unfinished pavements could be completed by the Town Hall using the deposit money placed by the builder. However, internal deficiencies, such as unfinished swimming pools, unpainted walls and the rest will need to be completed, and which ever way it is done, residents will pay. As the Councillor has previously explained to residents of Bosque Lomas III, there are two ways of doing this. The first is to sue Tecnologia now, and wait for a day in court which could mean living on an unfinished urbanisation for years. The second, and more sensible option is to identify the areas that need to be finished, pay for it through urbanisations funds, and sue Tecnologia afterwards once the work is completed.
The stark truth now facing customers of Tecnologia, Aroca and Atlas, is that if they wish to revert to a life with any semblance of normality, they will have to reach deep into their pockets to do so. The only recommendation from the Councillor was for people to sue the developer en masse and perhaps also the other two companies involved in this scandal. He said in the meeting: “One lawyer on behalf of all of you should take this person to prison as he has lots of property and you have been conned.”
It is not clear what powers the town hall has in this matter, but people left the meeting feeling disappointed that the authorities will not be making any moves to fine or sue the developer. If I were a Tecnologia homeowner, however, I would be asking some very serious questions about how the Town Hall allowed the large numbers of people to move into Tecnologia urbanisations that were unfinished in the first place, and just when the Town Hall became aware that this developer was not going to finish what it started. What detail is contained within the contracts Tecnologia has with the town hall that enabled them to build in the first place? Usually, if there is a contract, there is also an opportunity to sue if the contract is broken, so why can the Town Hall not do this? The Tecnologia fiasco appears to be the consequence of uncontrolled building in Orihuela Costa now coming back to slap the face of the authorities, but they are not the ones who will be paying.
One way to help the council out of this PR nightmare, which every day is doing more damage to an already beleaguered area of the Costa Blanca, would be to find money from somewhere to finish these urbanisations, and quickly. But does the Council have the will?
Despite the fact there will always be those disappointed by the substance or outcome of a meeting, numbers count, and for that reason, the meeting could be deemed as a step in the right direction for some.
For those with Tecnologia mortgages still outstanding on their homes, these recent developments will bring little or no comfort.
Rebecca Griffin

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Town Halls, are always between a rock and a hard place concerning unfinished urbs. In the interests of local tax payers, they cannot undertake the expenses of finishing off a development. That will always be the responsibility of the builder/developer. It would also not be legal for them to do so as the urb does not belong to them. The town hall will maintain the infrastructure, street lights, roads, pavements etc. only after it is handed to them in prestine condition and fully completed. Until then it will remain the problem of the builder and an inconvenience to the residents. The town hall has no incentive to persue the builders and get into expensive litigation. That would mean a lot of hard work and arguments. Some would say, "but what about the rates they could be collecting from the residents?" Well ask any mayor or councillor and they will tell you that it does not matter to them, as more housing stock means more work for them and their administrators, all they want is a quiet life. They get paid the same money wether they have 2 or 20 urbs in their municipality. In short, if we were offered the same money to work hard and be passionate about our job, or just turn up occasionally for a civic meal, I´m sure you would all be truthfull with me!!!!!!

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Fly, it is disgusting, it really is. It just goes to show we really shouldn't complete without the often elusive habitation licence. However, it's not so simple & I've gone into this so many times before, I'm not going to do it again.

We knew nothing about habitation licences, wealth & renta taxes & other things that are necessary to live in Spain either as a resident or a non resident when we put our 3,000€ deposit down in September 2003 & no forums to advise either. We were forced to complete by paying black money & without habitation licence (though at the time we weren't aware of this licence, it only came to light well after completion). It took two years to get the licence. We were on mains electric from HCEnergia from completion but had builders water till licence was given.

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Thanks for the replies. I would have thought it was the law that developers must pay for utilities until a Certificate of Habitation is issued. How can Tecnologia just abandon our urbanisation and then keep not paying the bills causing cutoffs? Why does it nearly always get reconnected? Perhaps TU know they have to reconnect. Why are the Townhall trying to fob us apart from the fact that we are always complaining to them. I think they just want shot of us for an easy life as was suggested but surely it is their legal responsibility to deal with the builder. Tecnologia are still in business and evidenly have huge stocks of land - illegally paying for it with clients money, hence the reason why there so many properties with builder's mortgages on them. Obviously Atlas International's lawers Aroca, Sequeir should have spotted that one. As I said before - it all stinks.

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OK - I have found out myself. THE BUILDER IS LEGALLY RESPONSIBLE TO SUPPLY WATER AND ELECTRIC UNTIL EITHER A CERTIFICATE OF HABITATION CERTIFICATE IS ISSUED AND OR METERS ARE INSTALLED BY THE UTILITY COMPANIES.

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"OK - I have found out myself. THE BUILDER IS LEGALLY RESPONSIBLE TO SUPPLY WATER AND ELECTRIC UNTIL EITHER A CERTIFICATE OF HABITATION CERTIFICATE IS ISSUED AND OR METERS ARE INSTALLED BY THE UTILITY COMPANIES"

This point is very much of interest to us. Do you, or anyone else, by any chance know, if the meters should not only be installed, but also actually connected to the property before the onus is passed from the builder to the owner?

Thank you

Jane

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Dear Fly380:

Developers are obligued to build according to work license but there is no explicit obligation of them suplying utilities connection if the FOL is not granted. Rather on the contrary, that is an illegality as it is againts Law to occupy  a house without the FOL.

I just can see an inmediate action against developer for cancellation and refunding or even a criminal action if the facts for that are there. Do not allow yourself to get into the mistaked situation of being provided utilities connection by developer or builder  before the FOL is granted, as that is fully illegal an unstable

Best,

Maria

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Thankyou for that reply mariadecastro. Unfortunately ATLAS and IBERIAN INTERNATIONAL moved us in 3 years ago. The builders Tecnologia Urbanistica left the unfinished urbanisation last May and it doesn't appear that they are coming back despite the fact that they are still in business. They have also left many of us with builders mortgages - the ones that used the ATLAS recommended lawyer Aroca, Sequeir. After a complaint to UK Trading Standards ATLAS were required to reply to me. Their answer is unbelieveable. They are blaming Aroca 100% but I bet they are still using them. The Townhall is telling us to pay our own bills - fair enough if we had meters. We even have a very busy Chinese Restaurant on our urbanisation. We have an extraordinary meeting on tuesday to try and sort out these problems but it is splitting the community.

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LEY 57/1968 Won Case in First Instance Court against BANCO SABADELL for our client who purchased an off-plan property from the developer Tecnologia Urbanistica at Colinas De La Zenia Elite Fase III in Orihuela Costa

We were pleased to inform our client recently that we had won their case against Banco Sabadell (formerly Banco CAM) in the First Instance Court.

The client paid their off-plan deposit according to the Purchase Contract to the developer’s bank account at Banco CAM (now Banco Sabadell).  The client did not receive an individual Guarantee for their off-plan deposit from the developer, Tecnologia Urbanistica or from Banco CAM.

The First Instance Court has now found the Bank guilty according to its legal obligations under Article 1.2 of LEY 57/1968.  The bank must refund the amount paid to the developer’s account plus interest at the legal rate from the date the money was paid into the account.  Legal costs were not imposed on the Bank due to the fact that the Judge is of the opinion there was conflicting jurisprudence regarding banks liabilities according to LEY 57/1968 at the time the Lawsuit was filed and the Bank submitted its written defence.

Re: YOUR CASE AGAINST BANCO DE SABADELL S.A.
PO xxxx/2015

Please find attached Sentence No. xxx/2016 from the First Instance Court No.1 in Orihuela.

Your case against BANCO SABADELL has been won.

The final paragraph of the First Instance Sentence delivered on 5 September 2016 and notified on 5 September 2016 states:

“Upholding the Lawsuit filed by xxxxxx against BANCO DE SABADELL S.A. with the following pronouncements:

1. I declare the legal responsibility of the entity BANCO DE SABADELL S.A. pursuant to Article 1.2 of LEY 57/1968 and therefore condemn the financial entity to refund the sum of xx,xxx Euro, being the amount deposited in the account opened by the developer in the said bank.

2. The amount indicated will accrue interest at the legal rate from the date of payment, or in this case, the date the funds were deposited in the account opened by the developer in Banco de Sabadell S.A.  The interest rate will be increased by 2 points from the date of this Sentence according to Article 576 of the Civil Procedure Act.

3. Without the express imposition of costs of the proceedings”


So BANCO SABADELL is sentenced to refund the amount of xx,xxx€ plus interest at the legal rate from the date the funds were paid into the developer’s account opened at Banco Sabadell.

The Judge did not impose costs on the bank; therefore each party will pay its own costs.

Interesting statements from the Judge in the Sentence were:


“On 12 November 2015 the plaintiffs filed a Lawsuit against Banco Sabadell, requesting the conviction of the bank according to its responsibility under Article 1.2 of LEY 57/1968.  The plaintiff requested the refund of the total amount paid to the developer under the Purchase Contract plus interest & costs, alternatively, the amount actually credited to the Banco Sabadell account opened by the developer, which was 3,000€ less than the total amount.

Banco Sabadell opposed the Lawsuit and said that it had not guaranteed the funds and that the funds were paid to an ordinary current account opened by the developer, over which the bank had no control or monitoring. 

The Preliminary Hearing was held on 8 March 2016 & the Trial was held on 23 May 2016.

Documentary evidence was provided to prove that xx,xxx€ was entered into the former Banco CAM (now Sabadell) account opened by the developer.  However, there is no evidence to confirm that the amount of £2,000 paid by cheque was entered into the developer’s account at Banco CAM.  This leads us to analyze the alternative claim for xx,xxx€ being the amount actually paid to the developer’s account at Banco CAM.

The former Deputy Director of the Banco CAM branch in which the account was held, gave evidence at the Trial.  She stated that the account was an ordinary account opened by the developer and that it was very difficult to control and monitor income in this type of account.

It is a completely reprehensible attitude of the bank knowing that it was an account opened by a developer which was funded largely by amounts paid by buyers to purchase off-plan homes.  However, this does not prevent this account to be considered as a Special Account according to the regulatory framework. 

Therefore, the bank has a legal duty to ensure these funds were guaranteed by an Insurance Certificate or Bank Guarantee.  Having failed in its legal duty, the bank then has a legal liability.

The bank should not allow the opening of accounts or the placing of deposits in those accounts, without first ensuring that the developer has assumed a legal obligation to guarantee the repayment of the funds. 

The bank was fully aware of the business of the developer and the fact that the account was being used to receive funds from off-plan buyers.  The fact that the account was opened as a normal current account, as alleged by the defendant bank, cannot prejudice the plaintiffs as the Supreme Court Sentence of 30 April 2015 confirms.

 

Banks that receive funds from off-plan buyers into developer’s accounts, although not called Special Accounts, must be responsible to the buyers for the total amounts paid to these accounts opened in its branches.  This doctrine, if there is any doubt, has again been reiterated and confirmed by the Sentences of the Supreme Court dated 9 & 17 March 2016.

As for costs, the plaintiff requested costs to be imposed on the bank.  Even though the Lawsuit has been upheld substantially in its alternative claim for the amount deposited in the developer’s account at the defendant bank, there is more or less uniform criteria in the Courts of this city (Orihuela) and in the Provincial Appeal Court of Alicante, to understand that the question before the prosecution regarding the liability of the Bank according to Article 1.2 of LEY 57/1968, has resulted in contradictory jurisprudence comparable to the existence of doubt.  So I plead the faculty contained in Article 394 of the Civil Procedure Act not to impose costs on the bank.  The Supreme Court Sentence of 21 December 2015 which clarifies the responsibility of financial institutions had not been published at the time the Lawsuit was filed (12 November 2015) or when the bank filed its written defence to the Court”


BANCO SABADELL has 20 working days from the date of notification of the Sentence, which was 5 September 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Alicante.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If an Appeal is filed by BANCO SABADELL it will be necessary for us to file an Opposition to the Appeal on your behalf.

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