Breach of contract?

Poppyseed,

If you havn't completed yet? and the FLO hasn't been issued correctly with fairly long delays and other facilities are missing, then  I think you would have a good case? If your grounds are soley based on promised facilities then I wouldn't suggest going alone with any legal procedure! If there is an off plan development forum in Eye on Spain, I would try to engage with other investors to see how they feel about the development too?

Legal costs can be very expensive in Spain with no Guarantee of success, regardless of how strong your case is? Working with others can result in lower costs and a stronger action against your developer!

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Thank you Maria & Mike. We have completed, 4 years ago when we still thought phase 3 would be built. I know there have been murmours about taking legal action, I was wondering if this was viable. The majority of owners are Spanish and they are really fed up with what the developer hasn't done. Apart from the lack of phase 3 the pavements they built are all now subsiding, cracks have appeared in some apartment walls (not  on our villa yet, touch wood) and the developer kept ownership of the 2 pools and charges the community 44,000+ euros pa for maintenance.......one is only a kiddies pool open for 3 months a year......

So there are quite a few people who would like to saee some action taken against him!

Thanks again

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Hi Poppyseed,

Yes, I'm afraid you would need to get together with other owners and find a good lawyer capable of taking them on? If a few of you can work together locally and work on the Spanish owners you may begin to make some progress? Of course any major construction issues should be dealt with through the Developers 10 year guarantee? A good start would be to build up a fighting fund and appoint an experienced lawyer who you feel you can trust? Putting together a simple web site for the development  where other owners can register their interest acn be a useful way of finding others, not forgetting to have one written in Spanish too!

I also notice you are from Manchester. I once drove with friends from M/cr to Peniscola in the early 80's! Also went again when I was on a trip around Spain on Public Transport. Pretty Hairy at the time! Loved the place then but I guess it has been "found" by all the developers since!! I also remember a tiny fishing harbour close by at Benicarlo, had one of my many mishaps there at the Local Banqueting House!! Nothing smutty but hilarious at the time!!
Wish you lots of luck with your claim

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Hi folks - me back again to update you.

Today was the day we were supposed to complete by.  As we had not heard from the Developer to inform us that completion would take place we contacted our lawyer instructing her that we wished to withdraw from the purchase due to the Developer's breach of the contract completion date and that we wished to execute our rights to call in the bank guarantees.

Our lawyer informed us that the court dictates that the breach of contract of the Developer has to be serious and that this means that the delay on completion has a grace period of no fixed amount but can be approximately 3 months. Also that if we issue a Requerimiento Notarial to the Developer now it will be pointless as there is not a serious delay. 

Bearing in mind that our contract states a completion date of first quarter 2008 with no provision for delay.  We believe that the property will not be completed with the FOL for several months and even then the facilities will not be ready including adequate site security and the property will be in the middle of an incomplete building site rather than a pleasant resort.

We have now replied stating we do not wish to wait we wish to cancel the contract and execute the bank guarantees immediately.

Help...............................have we done the right thing!!!!!

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You have done the right thing according to Law 57/68 and General Building Act of 1999.

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Thanks Maria - as always you are such a strong support to everyone on the forum - please don't go on holiday for the next few days we might need you!!!!!!

Have not heard anything back from our Lawyer - will probably be tomorrow now.  Have a feeling our Lawyer won't want to push this matter and will be resistant to carrying out our instructions.

Many thanks

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Valerie, You certainly have no legal requirement to complete without the FLO being formally issued.

The problem is that although you appear to have the right to claim against your Bank Guarantee, you will need to impress this point on your Solicitor about her duty to follow your instructions. If she dosn't support your claim then change lawyers asap has the Banks are just as bad as the developers when it comes to avoiding their responsibilities!! In fact from the tone of your comments about her I'd suggest you move on quickly? BUT there will no doubt be costs involved, so do your homework and find one who has successfully claimed against a guarantee before you commit to anything?

Best of Luck

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Thanks Mike

Had not thought to ask what she would charge!!  Will await her reply and then take it from there  - have no idea of costs involved and have already paid money on account just to carry out normal purchase stuff.

Thanks for your input - yes we have considered she may not be the person to handle this for us.

Just about to open the red wine - feeling just a little bit stressed!!!! 

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Hi Valerie, firstly thank you for your good wishes posted on the other thread.  As I said, I do consider myself to be one the lucky ones.  My situation was different to yours, as I managed to claim my refund because of a clause in my contract that said a refund could be requested if the building licence hadn't been granted by a certain date-which it wasn't.  I had to send my bank guarantee to the lawyers and one tip, (which I'm sure you have thought of ) is to take a copy of the guarantee and also to post it recorded delivery, so it has to signed for.  This at least means the lawyers can't say it has been lost in the post!

In terms of time, once my developer had agreed to refund my deposit I posted the guarantee, the lawyer met with the developer, exchanged guarantee for a cheque, paid the cheque into their account and then made an electronic transfer into my account..  Whole process took 8 days!

Keep emailing the lawyers.  I really do feel that my polite but insistent emails made the lawyers realise that I wasn't going to let go.  Develop a terrier mentality!

Really hope it works out for you.  Please keep posting.

Ann

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Ok so heard from our lawyer - says will send the bank and the developer a burofax but cannot send a Requeirmento Notario without power of attorney until we go to Spain.  (Sorry spelling is probably wrong) Is this going to suffice for the time being as we cannot get to Spain for at least the next week or so?

Thanks

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will suffice. No Notary request is needed for the execution of the Bank Guarantee.

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Thanks again Maria,

Just to clarify - does this mean our lawyer can just present our bank with a burofax stating our intention to action the bank guarantee and they have to honour these, even without us being present?  In effect if we were very lucky (highly improbable) will the bank just issue a refund?

So, in fact, our notice ie burofax to the developer is actually just a 'courtesy' or formality informing them of our intention?

Thanks

 

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Hi Mike T

We haven't been able to do the Manchester/Peniscola road trip yet due to lack of time and flying Liverpool to Reus is so cheap. I'm sure you would see a lot of changes in Peniscola but  pleased to say it hasn't gone the way of a lot of other areas..  It is still mainly a Spanish seaside resort  with the lovely old town and castle,  but  we do experience some language problems!   Our urbanization is on the coast road going south out of Peniscola, this area hasn't been over developed (yet) and in fact this road  eventually comes to a dead end.

Our urbanization is mainly Spanish, and they actually are the ones trying to do something, there has been a court case to denounce various people from the developer to the adminstrator and president. but it's hard top find out exactly whats going on, they did have a fighting fund for this which we contributed to and there is a website.  Hopefully we'll find out more when we're next there in May.  Unfortunately most of the Brits are burying their heads for a 'quiet life', foolish people that they are.

 

Regards,

Poppyseed

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Dear Valeriedixon:

 

Please find answers below in bold green:

Thanks again Maria,

Just to clarify - does this mean our lawyer can just present our bank with a burofax stating our intention to action the bank guarantee and they have to honour these, even without us being present?  Of course yes.  In effect if we were very lucky (highly improbable) will the bank just issue a refund? Yes, with a contract signed regarding the execution being made. That is what they are obligued to do by Law.

So, in fact, our notice ie burofax to the developer is actually just a 'courtesy' or formality informing them of our intention? No, it is not. You need to prove before the bank that you have tried to cancell it out of courts before developer and there has been no settlement.  But do not lose much time between the application before the developer and subsequent direct petition to the bank and before this and the judicial execution of the guarantee ( hopefully not necessary?.

Thanks

 

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Ann

Thanks for your positive posting - much appreciated and for your good advise.

Will continue to keep post updated.

Although your situation was different to ours it is still uplifting to have a successful outcome posted.

Thanks

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Hi Maria

Thanks for your reply - so if I can clarify with you what you are saying is that we have to firstly tell the Developer that they are in Breach and ask them to refund the money includuing the interest then if they are not forthcoming and refuse then we ask the bank to honour the guarantees and if this does not happen then we execute an executive judicial order which the bank should pay up on?

Also is the bank liable to pay the iva we have paid along with the other payments?

Is the bank able to pay the interest?

Is there any compensation for costs we have incurred to date in the proposed purchase and additional expenses incurred by the sale not going ahead and I pressume we would have to sue the Developer for these separately?

Thanks

 

 

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Thank you to everyone for taking the time to give us advise - we have e-mailed our lawyer with our instructions and questions as have been suggested but have not had any replies - we intend to try calling tomorrow and depending on if we can get hold of them, we will head over to Spain next week as we have no idea what the situation is at the moment.

Hopefully will have some news to post tomorrow - once again thanks to you all for being so supportive, especially posters like Maria who post on the forum for no  apparant financial gain - you have no idea how much it means to have contact with people like yourselves.

PS If you are reading this Maria - out of interest do you work outside of your province in Spain??!!

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Hello

Just thought I would update all of you who ofered me such good advise on our situation.  Have been to Spain and have now resolved the situation with our Developer with the help of all the fantastic advise and support of this forum and our lawyer who was very strong in her support of us to the Developer we have reached an agreement for a reduction in the purchase price and extremely nice temporary accommodation here in spain along with storage for our furniture.  The Developer ended up being very fair minded and we are extremely happy to proceed with our purchase.

If we had not reached an agreement the Bank had been on the point of refunding the monies paid on the Bank Guarantees with very little complications or argument.  In fact the Bank were extremely helpful and friendly about the whole thing. 

All in all a very good result and a happy outcome as far as we are concerned.  Maybe we just got lucky considering other posts on the forum but nearly everyone concerned seemed to go out of their way to try to resolve the situation in a fair and amicable manner. 

Maria de Castro is absolutely right - get good advise, get your facts straight, get as much information to back up your claim and stay strong.  In our case the Spanish legal system was fair and worked in our favour and we are delighted and looking forward to our move to Spain.  We have managed to keep on good terms with our Developer, our bank  and although we worried that our Lawyer would not be keen on proceeding with fighting on our behalf we were proved wrong - SHE did a great job.

So once again a BIG THANK YOU for the advise and support. 

 

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Hi,

I have just stumbled on this thread. I am buying in a development on Almerimar and was out last week to visit the apartment. On arrival at my apartment I realised there was something very wrong with my balcony, it was much smaller than I had imagined. Anyway I insisted that the site manager come up and measure it.

To my shock he confrimed it was 3square metres too small and offered me a discount as I stood there on the balcony. I couldn't believe what was happening as I had waited 3 years for it to be completed. At that stage I infomed him that I wanted no money in lieu but a new apartment with the demensions on my plans  or my 30% deposit refunded. I have since got a phone call and the developer has offered me 2100eu reduction. I paid 174600eu off plan 3 years ago. I thought this was some sort of a joke.

I am just wondering is he in breach of contact and am I entitled to get my deposits returned. I love the developmet and the area and so wish my apartment was per plans.

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 Derek,

Very annoying Isn't it! A 3sq metre loss of balcony space on the face of it wouldn't appear to a be a good case for cancelling of your contract? Of course if your balcony is only 6 sq metres then it's very significant!
If the developer is offering a discount so quickly then I would keep pushing for a larger figure? I'm sure your developer would like a "painless" completion in the current market.............

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