BG and The Lawyers Responsibility

How long to go through the courts?

On average every declarative case in Spain might take 6 to 24 months. On average and if they do not appeal.

Maria thanks for the information but I have a few queries.

Can you only follow this legal route if you have been through the courts already and won your case against the developer for breach of contract, or is this legal route totally independant of this requirement?

Another question which might sound obvious, why have lawyers not followed this legal route to date?

Also if the Banks are not paying out to those who already have a bank guarantee, would they follow a similar tack and refuse to pay out on this legal route also?

What would be the best course of action in our case?

Our deposit is in a special account with La Caixa, we have the account number and it is stated on our contract.  We have also been to see the manager of La Caixa in Murcia and we have seen for ourselves the funds on the computer in our name.

When we asked for it back because of failure of the builder to deliver the property in time (also they still dont have permission to build) we were told that we needed the bank guarantee document.  Our solicitor has repeatedly asked the builder for this and we have have asked in person and by email and letter, but they have ignored all requests.

Our solicitor has told us that we now have to take the builder to court to get  our deposit back, even though the bank agree that the builder is in breach of contract.  Is this correct advice or should the bank release the funds?

Our solicitor has also attended the notary office asking for the builder to deliver the BG and when they didn't turn up made a further appointment for them to deliver the keys to the property, which they obviously couldn't do.  This was done on the advice of the bank

Cathy

Maria thanks for the information but I have a few queries.

Can you only follow this legal route if you have been through the courts already and won your case against the developer for breach of contract, or is this legal route totally independant of this requirement? It is totally independent.

Another question which might sound obvious, why have lawyers not followed this legal route to date? Law 57/68 is little known and less correctly understood and applied accordong to the best legal opinion. 

Also if the Banks are not paying out to those who already have a bank guarantee, would they follow a similar tack and refuse to pay out on this legal route also? I am sure they will... and Courts will be needed

What would be the best course of action in our case?  I am sorry but cannot issue a legal appraisal with the data I have: I would need to see more details of your file.

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Our deposit is in a special account with La Caixa, we have the account number and it is stated on our contract.  We have also been to see the manager of La Caixa in Murcia and we have seen for ourselves the funds on the computer in our name.

When we asked for it back because of failure of the builder to deliver the property in time (also they still dont have permission to build) we were told that we needed the bank guarantee document.  Our solicitor has repeatedly asked the builder for this and we have have asked in person and by email and letter, but they have ignored all requests.

Our solicitor has told us that we now have to take the builder to court to get  our deposit back, even though the bank agree that the builder is in breach of contract.  Is this correct advice or should the bank release the funds? I would rather go against the Bank under this 1.2 57/68 action, it needs to be before the FOL is issued.

Our solicitor has also attended the notary office asking for the builder to deliver the BG and when they didn't turn up made a further appointment for them to deliver the keys to the property, which they obviously couldn't do.  This was done on the advice of the bank

Cathy

Hi Maria

Is there a time limit to starting this action against the bank.  Also how do we find out which bank our moneis were paid into - my understanding is that in my case the developer used several different banks.  Have you successfully obtained monies back against a bank under this route?

Nigela:

It needs to be done before the First Occupation License is granted. Is not in your contract a mention about the account your money was paid to?

Best,

Maria

I have just dicovered your blog and have to admit I have been taken in by these developers also. I dont quite understand eveything that is being said ie "embargo". I have a bank guarantee for one of my instalments but as yet the solicitors have not managed to get my money back. Now when I phone they dont answer. Is there any point going on with this -will we ever get our money back? How on earth can this company get away with this? Id love to hear from anybody

Mathersi - welcome

Sounds like you need to change your lawyer. was your lawyer recommended by the selling agent!!

check out the community forums, you'll find loads of info there

Phil

Maria and everyone else,

I have been banging this particular drum for over a year now but obviously I was addressing the wrong forum.  In Feb 2008, I sat down and wrote the following translation of the appliccable law (57/68) based on the original Spanish which was posted on
http://www.costaluzlawyers.es/2006/06/06/ley-57-68/.

Here is my translation:

Ley 57/68, reguladora de las percepciones de cantidades anticipadas en la construcción y venta de viviendas
Junio 6, 2006 on 6:18 pm | In Articulos |
(BOE núm. 181, de 29-07-1968)

Article 1.1 of above law states - the promoters must guarantee return of money plus 6% in case building does not start or is not finished in the agreed timescale (and now for the important bit) whatever the cause (por cualquier causa).

Article 1.2 says the money must be in a separate account with an authorised institution.  It is the bank or savings account provider's responsibility to provide the guarantees (Para la apertura de estas cuentas o depósitos la Entidad bancaria o Caja de Ahorros, bajo su responsabilidad, exigirá la garantía).

Article 2 states that the contract must expressly state a)the obligation to return funds plus 6% pa, b)must reference the bank guarantee, c)must name the bank and the account funds are to be paid into

The bank guarantee will be handed over as soon as the contract is authorised (I assume signed by both parties)

Article 3 states what can happen if the contract is  not fulfilled

Article 4 says the bank guarantee will be cancelled as soon as the certificate of habitation is issued

Article 5 says (I think) that the promoter has to expressly name the bank that is providing the bank guarantees in its advertising

Article 6 has been deleted

Article 7 confirms that the rights given under this law cannot be renounced

I have blogged elsewhere about the implications for the Spanish banks under the obligations of Basel2 and Sarbanes Oxley with regard to due diligence and compliance with the law and compared it to the current scandal in the UK banks where customers are successfully suing for a refund of extortionate bank charges.

So Maria, I would be interested in hearing how you think I should progress.  I have invested over 80K euros, have no BG and am awaiting a date for a court hearing.  Where would I start with a complaint against a Spanish bank?  Any advice would be welcome.

Is your action a declarative action against the developer?

I would start adressing a claim against the Bank too.

Best,

Maria

Maria

Here in the UK, the banks operate a code of conduct which includes details of how to make a claim against a bank.  In the first instance, this involves going through the bank's own complaints procedure.  If this does not resolve the matter then there is a financial ombudsman who can be asked to judge on the case.  All of this is without having to involve courts or lawyers.

Your reply suggest that we should go straight to the court but I would be grateful if you could let me know if there is a complaints procedure and a code of conduct for banks in Spain.  I would rather exhaust these avenues before committing to more lengthy and costly legal proceedings (unless you know of a good lawyer who would be willing to take on my case on a no win no fee basis).  The bank I paid the money to is Banco Popular.

Regards

Every Bank has its own clients service, then you also have the Bank of Spain.

You may like to read this blogpost:

http://www.eyeonspain.com/blogs/costaluz/1306/legal-tip-53-bank-of-spain-complaints-service.aspx

Muchas gracias

Maria

In my case the developer had the build mortgage and debts to carpenters etc in one companies name (the company we purchased from) and the clients deposits in another companies name.  The special account (if one was ever set up) was not set up with the bank they recieved the build mortgage from.  Can this bank still be responsible for not ensuring where the deposits were going?

Thanks

Deeleys

Maria, I noticed the following within that blog that you just mentioned, so does this imply that the complaints service is not relevant to this situation where the law (57/68) is being evoked :

The Complaints Service does not handle complaints relating to matters of business policy (the denial of a loan, for example) or those falling within the jurisdiction of the system of justice. Nor does the Service evaluate any possible damages or order the payment of any pertinent amounts.

Likewise, the Service does not accept complaints that are subject to legal proceedings or court litigation. Nor does it accept complaints lodged by the customers of credit institutions that refer to transactions or events dating back more than five years.

If you have already started a judicial claim, you cannot sumitt same issue to the Bank of Spain.

Thanks Maria.

If you have already started a judicial claim for breach of contract against the developer and you have won your case but are awaiting seizure of accounts etc, can you still make a claim against the specific Bank that held your deposit if you were not given a legal bank guarantee? Do these court procedures not conflict?

If you cannot obtain the refund from developer, and there was no Bank Guarantee granted to you, you can ask compensation of damages against:

-The Bank

-Lawyers´s Insurance company: if they did not obtain the Guarantee ehen conveyancing.

Hope this clarifies.

Best,

Maria

Thanks again!

I presume then that you have to go to court first and exhaust all legal routes to regain monies from the developer before you can follow any compensation legal route against the Bank or lawyer's insurance company?

Would this compensation potentially cover the full original deposit and/or interest and costs?

This message was last edited by ads on 22/10/2009.