La Tercia Real Deposit Refund - Don't Give In!

A week or so ago, Maria de Castro and her firm Costa Luz Lawyers, successfully won our case to get our deposit back from Spanish developer Peinsa and Banco Popular after a failed La Tercia Real purchase executing an "expired" bank guarantee.  Please read the testimonial we provided for Maria and her firm and let it serve as a fillip to everyone who is going through trauma and stress trying to get back what is rightfully theirs.  Don't give in and again thanks Maria!

Can I say a tremendous thanks to Maria and all of her team (especially Steven) at Costa Luz Lawyers for their services in getting our money back from a developer\bank after a failed Spanish property purchase.  After putting a deposit down for an off-plan villa in 2006, the development initially ran beyond its expected completion date of Sept 2007 and then in Oct 2008, the pulling out of bank funding meant that the developer decided to stop developing all together leaving our money trapped.  They never actually informed us of this...we only found out through our agent!
 
Looking to secure our money in case the developer went into administration (as was feared at the time), we were advised by our agent to transfer our deposit into a key-ready property as we had an "expired" bank guarantee.  This ultimately fell-through as the developer couldn't complete citing it was unable to lift the mortgage already on the property (did they not know this when we started the process for the new property?!).  Now at our wits end, we sought litigation advice.  Our initial lawyer informed us that our original purchasing contract was now null and void as our purchasing lawyer had signed papers for the new property which had fallen through (without our clear consent). She also stated that this had also in-validated our bank guarantee so that wasn't worth the paper it was written on either!  Our only option, that lawyer stated, was to sue the developer who we knew had no money anyway...so what point would that be?!  Bearing in mind that was just before Christmas 2008, that was probably the most stressful festive period we've ever had.
 
Not content with this, further researching our options, we came across comments from Maria at Costa Luz Lawyers advising people on website Eye On Spain.  Straightaway, I liked the way she came across online, going out of her way to advise people on their situations and about Spain in general.  We passed our details to her, no holes barred, and were absolutely delighted when she came back stating that our bank guarantee was valid, the expiration date on it didn't matter and ultimately that she was very confident she could get us all of our deposit back! As I didn't trust our previous lawyer to get the originals of our legal documents to Maria, we took the opportunity to collect and deliver these ourselves to Maria in the Costa Luz Lawyers offices in Algeciras.  Meeting Maria and her team in person was a very uplifting experience that really put us at ease.  It left us with a feeling full of trust that we were putting the chasing of our savings into the hands of someone who knew her stuff, yet was charming with it and a team who you could tell really cared about what they were doing.  The confidence that had been destroyed by our previous lawyer had now been rebuilt.
 
On returning to England, we were (as promised) e-mailed comprehensive documents outlining the processes that were possibly going to unfold to retrieve our money.  Any extra questions\concerns we did have were always answered in a timely fashion and a friendly manner by either Maria or Steven, helping us to further understand the process as well as keep our spirits up when things seemed to go quiet.  9 months on from our first meeting with Costa Luz Lawyers, our deposit has been fully refunded and an additional claim for interest\costs is in the process of being sorted out.
 
We are delighted with the service provided by Costa Luz Lawyers, in particular from Maria and Steven (who we mostly dealt with) due to their timely and personable answers to any queries we have had during the whole thing.  I would not hesitate to recommend Costa Luz Lawyers to anyone who finds themselves with a legal issue in Spain...indeed I have already done so on a couple of Spanish internet forums.  Many thanks Maria and all of the team!

Hi nicholb

It is fantastic that you won your case against Peinsa and Banco Popular.  Maria seems to be an expert in these matters.  Many developers and banks think they can get away with blatantly breaking Spanish Law when selling off plan property.  This corruption must be stopped and Maria and her team are doing everything they can to put an end to this corruption that is happening all over Spain.

Your case highlights a very important point.

You say:
Looking to secure our money in case the developer went into administration (as was feared at the time), we were advised by our agent to transfer our deposit into a key-ready property as we had an "expired" bank guarantee.

Of course it was in the agents interest to advise you to transfer to a key ready property and have you living on a half finished development because they would still receive their commission on the sale.  But if you executed your Bank Guarantee they would not receive their commission.  So was the agent just telling you that your Bank Guarantee was expired or had the Bank illegally put an expiry date on the document?

According to LEY 57/68 a Bank Guarantee for an off plan deposit must not have an expiry date.

The Bank Guarantee or Insurance Document expires ONLY when the Certificate of Occupancy / Certificate of Habitation / Licence of First Occupation (Cedula de Habitabilidad) is issued.

See below the relevant extract from LEY 57/68:

Article Four – Once the Certificate of Occupancy is issued by the Provincial Delegation of the Ministry of Housing and given by the promoter of the housing to the buyer the rights guaranteed by the insurer or guarantor will be cancelled.

Articulo cuarto – Expedida la cedula de habitabilidad por la Delegacion Provincial del Ministerio de la Vivienda y acreditada por el promotor la entrega de la vivienda al comprador se canceleran las garantias otorgadas por la Entidad aseguradora o avalista.

Once again, fantastic that you have won the case.  Lets hope you are successful in getting Banco Popular to pay the interest and costs.  Again, according to LEY 57/68 the bank is liable to pay 'Legal Interest' from the date you paid your deposit and not only from the date they issued the Bank Guarantee, which may have been sometime later.

Kind regards

Keith

Hi Keith 110 . Despite what the law says and what Maria so rightly advocates  Spanish law  is not working  as it should .It is fine in theory but is totally flawed in practise . What actually happens within the realms of Spanish law  and in it's courts is entirely different from the written law .

Justice is not being done at  ground level within the Spanish legal profession and certainly not within  the Spanish courts . Innocent people are spending thousands trying to get justice in the simplest of cases where deposits and staged payments have been payed and no property provided .Even when legal  Bank Guarantees are in place the  banks and insurance companies  are ignoring their responsibility in law and  worse ignoring the judgements of the courts  .

So to the big question .How does one get justice in Spain ? You don't and never will but will pay heavily to find this out . My advice -don't waste your time or money  .

Sorry to anyone who only wants to hear  happy stuff about  Spain but this is the reality for thousands . MM

Funny, I thought you had been banned MAGICMEG!

Hey Pitby Justin has allowed me back . Do you have a problem with this ?  or are you just having difficuilty with the truth and  with finding  any reply that holds water .MM

This message was last edited by MAGICMEG on 12/11/2009.

I simply made a statement!!  But there you go ....

Thanks Brian for posting your testimonial here. We do hope to have soon in our hands both full interests and legal costs.

Enjoy!

Maria - That's alright...no problem.  Good service deserves good praise.  People these days seem ever so quick to criticise when things go badly but not so eager to reward when things are done well.  I'd be quite happy using your very personable services again should the need arise and am not afraid to tell other the same!

Keith110 - Our Bank Guarantee had an expiry date on it, which had passed.  We were initiating the process of renewal of said guarantee when Banco Popular pulled the plug on funding the development.  This is before we discovered that expiry dates on bank guarantees should be irrelevant.  To be fair to our agent, I think they just believed that to have an expiry date on the bank guarantee was valid but the date on the document had passed.  I say this not through naivety, but because they gave another couple we knew with an "in-date" guarantee the option to execute the guarantee or go for a key-ready property.

MagicMeg - That's a very dim view you spin on things.  Once we got to Maria, from meeting her in her office to being refunded with money in our account was about 9 months.  I'd have thought a court case in the UK would take just as long if not longer.  So I don't really think you can say the system is flawed any less than ours is...and ours IS flawed.  You only have to look at cases like the Baby P case and the sentences passed to know that our judiciary can be as much of an @ss as anyone's.

What IS obvious though is that it seems crucial what lawyer you speak to.  Bearing in mind we showed two lawyers (both impartial - i.e. not connected to the developer) the same documents re our case in the space of three weeks, I find it bizarre their conclusions could of been so different. The first clearly stating (and believing) our bank guarantee was not only out-of-date but also invalid anyway because of our failed 2nd property purchase, thus leaving our only option to go after the developer (who might possibly go into administration); the other (Maria) stating yep your bank guarantee is valid and you have a strong case to get your money back! 9 months on we know who was right (!) but, for the sake of others, the first lawyers view concerns me and also does make me wonder that although law 57/68 seems to clearly state your rights, how many lawyers actually realise\believe this?

From a personal point of view, despite periods of quiet (I guess all legal cases are like this) on reflection a case going through the courts in 9 months seems perfectly normal to me.  However, I'm peeved it had to go that far although, bizarrely, had the bank agreed to pay sooner after being written to before going to court, due to exchange rate fluctuation, the conversion rate to gbp would've worked against us and in effect we would've received less sterling back!

So I guess every cloud...

Brian
 

Doesn't this also go to prove that where an illegal bank guarantee has been provided (i.e. not recognised in Spain), just  how many rights for a relatively swift and painless conclusion a purchaser has been denied........ especially the long arduous route for return of monies that this entails thereafter.

Do you have any observations on this Maria? Do you use this as part of your legal argument to ensure that these cases where the developer has provided an  illegal BG have essentially denied the purchaser rights to a swift conclusion, not to mention the stress that is associated with the long drawn out legal process accompanied by the fear that the developer could go into administration in the interim. It really should be considered a black and white issue shouldn't it?

It's illegal. End of!!!! Sorry for the rant.

Great conclusion for you Brian. Well done.