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September 27, 2016
If you lost your deposit on an off plan property, you can now make a claim against the property developers and get your money back.
A Spanish Supreme Court judgment made last year means that for those who lost their deposits on off plan property they can now make a claim for the lost money in full.
Way back in the late 1960s Spain was changing, people were moving from villages and towns to the cities in search of better jobs and a higher standard of living. The villages and towns ran on a rural economy, with farming the most popular and fruitful work, but as the population began to increase there was a demand for more jobs and better conditions. Villagers therefore began moving to the bigger cities in vast numbers.
To cope with this there was a mini construction boom financed mostly by buyers who paid a deposit on properties which were still in the planning stages, hence “off plan”. The government at the time passed a law to protect buyers by requiring developers and banks to protect the deposits in escrow, or protected accounts. The idea was that the buyer paid the developer, who put the money in an escrow account, against which the bank would lend funds to build the property.
Once completed the money in escrow should be transferred to the bank, if the property was not completed the buyer’s deposits were to be returned by the bank. This reduced any risk of the developer going bust and losing the deposits. In effect the Bank, should by law, guarantee the buyers deposit.
Regrettably in many cases this law was either studiously ignored, or simply not honoured by the banks. This was the same until 2015 when the case was looked at again by the Spanish Supreme Court, when it was asked to clarify the position. The Courts judgment was that Developers and Banks are jointly and severally liable to protect deposits paid on un built projects. The developers, said the court, are obliged to protect the full amount of the deposit and even if they fail to do so, the bank must.
For consumers and especially those who lost their money, this is the green light not just to make a claim, but to recover the deposits.
At Lexland we have a team of experts ready to assist with this matter, once we have examined your case and documents for free, we can offer a “No Win, No Fee” arrangement on claiming you back your deposit. We will organise a free initial consultation so your questions can be answered, and give you access to our team of specialists, to ensure that your claim is in the best hands.