Court sides with Spanish property investors

A recent court ruling in Spain has offered a lifeline to overseas property buyers fighting to get back “lost” deposits from the country’s banks.
As investors continue to battle to get back deposits paid on non-existent overseas homes, a Cantabrian judge has ruled that a bank (Caja Cantabria) responsible for protecting a client’s funds, failed in its duty.

The judge has ordered the bank to issue a full refund of both the deposit and the stage payments.

Daren Wallbank, director of ReclaimYourDeposit.com, told OPP that the outcome of the case will be noted in other courts around Spain, adding that “although bank guarantees were seen as the ultimate in security by Spanish property investors, we’ve uncovered many cases where the guarantee has been promised but not delivered and everyone from the bank to the lawyer, notary to the developer has seen fit to relieve themselves of responsibility for the failure.

“This landmark ruling shows that the Spanish legal system is prepared to apportion blame and will not allow property scams to be brushed under the carpet.”

The Cantabria case referred to a client who had paid a deposit on a property that was subsequently never built.

The bank initially tried to brush off the allegations saying that the bank guarantee had expired and therefore they could not be taken to task.
The judge reminded Caja Cantabria of Spanish Property Law 57/1968 which requires protection for the funds paid by the buyer by putting them “into a special account and ensuring they are used solely for the purpose of building the property”. The court further argued that guarantees could not expire whilst the purchaser still had no home to show for their monies.

According to Walbank, “sadly Spanish Law is not based on precedent in the same way as English Law, but undoubtedly other courts in Spain will take the verdict into account when faced with similar cases – of which there are many.

“It also leaves a question mark over the numerous expats who have discovered that their bank guarantees were never issued – it’s still unclear who would be responsible then.

“Nonetheless it does send out a clear message that the Spanish legal system is slowly coming to terms with the terrible treatment of international property purchasers and provides more than a glimmer of hope to those seeking recompense for non-completed property in Spain.”

ReclaimYourDeposit.com works with overseas property clients in Spain on similar claims provided that they “have in their possession the original private purchase contracts, proof of payments made and a contract that has expired without the property reaching completion.”

Source: OPP

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