Those who bought an ‘off-plan’ Spanish property but never in fact received the completed property may have a legal remedy to obtain the return of any deposit paid as a deposit.
Article 1 of Law 57/1968 regarding the receipt of advanced payments towards the construction and sale of residential property, clearly establishes the legal responsibility assumed by financial institutions in whose accounts the deposit was lodged, where the said financial institutions failed to insist on an insurance guarantee or a deposit by the developer.
This legislation obliges the financial institution, typically a bank, to insist, at the time of the opening of the account, on verification that there is a deposit lodged by the construction company or alternatively insurance to cover any potential loss. If the bank fails to do so or if it proceeds to open the account knowing that such a deposit does not exist, the bank is liable for any financial loss suffered by the account holder ie the property investor who would have been the beneficiary of such insurance or deposit.
Accordingly, if the property investor is unable to exercise their rights to receive the return of their money for failure to deliver the property as ordered, by virtue of the failure to have an insurance policy as required by law, then the bank in which the property investor’s money was held must rectify the loss.
On this basis, if you bought an ‘off-plan’ property, and the property developer never completed the property, then if the developer has not returned to you the deposit monies that you paid over to the developer or if you have won a court case against the developer already, but received nothing due to the developer’s insolvency, then you may be able to claim against the bank in which the deposit monies were held.
We are assisting a number of client’s with similar claims, so let us know if you are in this situation and we shall review the matter to determine if you could make a successful claim.