Agent spent the deposit

Hi all,

Here we go again ... pipped at the last hurdle.

I am (was?) buying a property in Calpe.  But when all the relevant parties got together at the Notary office (i was not there as the lawyer has Power of Atrtorney) it became apparent that the Agent, who I had, on the Lawyers say so, paid the initial 10% to no longer appears to have the said 10%!  Thus the completion failed to happen.

Eventually I discovered this through talking to the Agent but was a bit annoyed that the Lawyer had not told me this two weeks ago when everything failed (i was told that the Vendor was not ready to sign).

The Agent talks the talk and says he will come up with the deposit in the next few days ... hmm he apparently said that 2 weeks ago to!

So anyone out there got any advice of what I should do and where I should go next?  I must admit this is a new one on me and how happy I was not to be embroiled in all those other scams that I regularly read about on this forum only to find that I appear to be part of a new one that I had not even considered! 

Spain .. bah humbug ... soz but today the Spanish dream seems a long way off !

Thank you for any advice.

If you keep receipts of those payments made to the agent, you can request them, by certified or notarised conduct for him to appear with the money and certificate of the origin of this, as required by money laundering avoidance regulations, before the Notary for a definitive completion at a determined date. If failed... you will have no option but to take him to Court.

Good luck!

Maria

Hi,

the notary has to be provided with proof of the payments made on account of the property price. If the problem is proving that the money has been paid, I would suggest that your solicitor dealt with the agent in order to get the documents that the notary is requesting. This should be easy, provided that the money has been paid through bank transfer, or that the amount paid does not exceed 10.000,00 €.

However, if the problem is that you paid a money to an agent on account of a purchase and such money is not appearing anywhere, then I would take the matter to the police and to the criminal courts. I agree with the former comment in that you should get the receipt or any document proving that  you have paid that money to the agent. However, that money was for an especific purpose - the document should say it is for the purchase o an specific property - and in the event the agent has done something different without your authorisation - such us spending it without your permission - it could be a criminal offence.

Surely your solicitor has thought about threatening the agent with putting a denuncia in order for the police and the criminal courts to act.

Good luck.

Thank you both for your valuable input.

Fortunately for me the completion did eventually take place last Friday .... Hooray ... Four weeks later.

I was told it was going to go ahead once again but to be quite honest I had no confidence in the Agent coming up with the  reddies!!  Luckily i was wrong :-)

It is good to hear that this would be seen as a criminal act in Spain and that potentially the police would be interested in persuing such matters.   Here in the UK the police would not be at all interested in such things and it would be a civil matter.  Sometimes  i wonder what the Police in the UK do these days for the law abiding average person on the street!   I personally have very little confidence in the service they (don't) provide these days ... another thing on the list of my reasons to persue my dream in Espania and to leave the UK for good ... and yes i do appreciate many things are not ideal in Spain either ... but I am sooo frustrated with the mess MY country has got it's self into ... that I will gladly escape asap ... rant over honest ;-)

Thank you both once again for taking the time to advise me on my problem that has fortunately gone away.

Thank you. Congratulations and hope you will enjoy your house and Spain.

Maria

Congratulations!!!

Glad all worked out well.

Personally I would never give a 10% deposit in this climate. It's a buyers market with 2 million unsold properties any seller is not going to throw away the chance of selling the property because the buyer will not place a deposit.

A token gesture is all that is required 500€. If the seller does not agree let him sell it to the next person in the list queuing up to buy :-)

Hi AT3 - I don't know where you get your information from and there is nothing on your profile about your background. 

The deposit we charge is 3,000€ and we will not take a property off the market without this deposit.  In Spain, the estate agent pays all the costs of advertising, checking documentation and outstanding bills, and preparing for the notary.  We spend a considerable amount of time and money in preparing for a sale and cannot risk taking a property off the market without some kind of deposit to ensure that the buyer is serious and intends to complete.  If you were the seller would you agree to have your property off the market for perhaps 2 months and then find the buyer simply walked away?

I know this thread started about a crooked agent but please don't assume we are all the same.  Some of us are trying to make an honest living by doing our best for buyers and sellers. 

We also request a serious buyer to show good faith and place 3000 euros. We request one of the lawyers hold it and therefore there is no risk of it disappearing.

Some owners (and buyers) insist on the arras cotract to tie both parties in and a non refundable 10% is placed, again in usually the buyers lawyers account.

 According to provision 1454 of our Civil Code:

If there is a sign or deposit amount and contract preceeding the sale contract, the sale can be cancelled by the buyer ( losing the deposit he paid) or by the seller ( paying a double amount to buyer). 
 

http://www.eyeonspain.com/spain-magazine/deposit-contract.aspx

There is a very important principle of contractual law in the Spanish Civil Code that states: ”The contracting parties can establish all the agreements, clauses and conditions that they may find necessary, provided they are not against the Law, the morals or the Public Order” .  It is called the “Autonomy of the will Principle”.

Taking that into account can help us to understand what the truth is in that “an agreement is a Law between parties”. For the peace of mind of consumers (purchasers of properties) , Spanish Law regarding abusive clauses is very clear and these abusive clauses are a very important limit to the autonomy of the will as they are considered against the Law.(Please see a list of Null and Void Clauses). Anyhow, play your part in the negotiation (with the assistance of a good lawyer) in order to use this freedom for the protection of your rights and a smooth purchase process.  For example when signing a deposit contract.

The deposit contract is a contract by which one party (the buyer) is obliged to pay to the other party (the seller) an amount of money as a deposit or guarantee for the fulfilment of a sales contract, and this party (the seller) is committed to sell the house to that person within a determined deadline and according to the conditions agreed thereby. The conditions agreed regarding the return of monies paid, cancellation… need to be balanced and equivalent between parties in order to be respectful with the standards of the protection of the Consumers´ rights.  Any abusive clause is coinsidered null and void and not enforceable.

The above mentioned contract must gather, in detail, the main aspects of the agreement that has been reached, such as the full identification of seller and buyer, plus enough, official and clear identification of the property (Nota simple required, click here for more information), definition of the contract which is being signed, agreed price, method of payment (expressing if any amount is delivered as a deposit or on account of the price); who will pay the expenses and taxes, time within the public deed needs to be signed, etc… The more in detail and tight, the more peaceful your purchase process will be. It is also important to bear in mind that there is very recent legislation on Information requirements when selling houses in Andalucia (please see: http://www.costaluzlawyers.es/eng/?p=22 and http://www.costaluzlawyers.es/eng/?p=24 )

The return of amounts handed as a deposit will depend on the fulfilment of the conditions agreed in the deposit contract. It is very advisable to have a compensation clause that will avoid further discussions on this important matter. There is big room for negotiation here. Remember the aforementioned principle on “Autonomy of the will” in Contractual Law.

On the other hand, if it is the seller who is not complying with the agreed deadline, or decides not to sell without a justified reason or to sell the house to a third party, he will have to compensate you according to what is stated in the deposit contract.

In the case that the sale is finalised within the agreed deadline, the deposit will be considered an advanced amount on account.

It is needed to pay a lot of attention to this contract as it is as important as the sales contract itself and you can be committing yourself to conditions that will determine the purchase at a very high level.