31 Jan 2012 6:41 PM:

Costaluz Lawyers have commenced litigation on my behalf for Recovery of a 30% Deposit on a development at Cortijos Altos. It took me almost 5 years to obtain a copy of the purchase contract and have it translated, only to find that "abusive" clauses allowed the seller to demand payment of the 70% balance on the contract, within 20 days of completion, and then apply a punitive interest for non-payment. Alternatively, at their sole option, they could retain the 30% deposit, the property, and not complete.

It had been put to me that there was no need to incur the expense of litigation, because after all this time, and the clear breach of contract, the developer would never demand payment of the 70% balance, although this would still be far in excess of the value of the property today. My own view was this liability still represented a significant risk, that warranted pursuit of the breach of contract and recovery of the deposit, and Maria De Castro has confirmed that the Developer must agree not to pursue payment to remove a potential future liability This probably explains posts refering to buyer's agreeing to forego deposits in return for cancellation of further payments.

Maria suggested I summarise this enquiry and her response in a post, in case there were some buyers who have written off their deposits and believe that's the end of the matter. Depending on their spanish contracts, cancellation of further payments may be straight-forward, but how many buyers have copies of their contracts? She added that my commencement of litigation for breach of contract would ensure the seller could not claim the 70% balance.

Thread: Recovery of Deposit

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