Has developer acted illegally

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This topic contains 10 replies, has 7 voices, and was last updated by Profile photo of katy katy 10 years, 3 months ago.

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  • #52171
    Profile photo of Anonymous
    Anonymous
    Participant

    We have purchased an apartment and paid 30%. The developer has obtained a valid Habitation licence which we have seen.

    Our solicitor has now asked if we wish to have the developers
    mortgage subrogated to us to save legal costs.

    However there is no mention of any mortgage in our purchase contract and it appears that the developer may have mortgaged wel after we signed our purchase contract.

    Has he broken the Spanish law by failing to notify us ?

  • #65281
    Profile photo of Anonymous
    Anonymous
    Participant

    I don’t think that it is illegal. However, having said that there should be a clause mentioning this in your contract.

    A website offering advice on various issues pertaining to the purchase of a property from a developer commented the following on the issue of mortgages:

    Mortgages
    Many developers arrange a mortgage that you have the option of taking over. If this is the case you will need full details as to the terms and conditions of the mortgage. Note that you are not obliged to take over the mortgage, though doing so will probably save you some arrangement fees. However this potential saving needs to be evaluated in terms of the overall mortgage. Saving a few hundred Euros in arrangement fees but paying dearly over the rest of the mortgage’s lifetime isn’t an ideal solution. Compare the mortgage with other offers and then make a decision. If you don’t take the mortgage offered with the property the developer would probably have to pay some cancellation fees. You will probably not have to take this decision until much later in the process, when you come to take possession

    Also, if you want to see a bit more information on the mortgage taken on your property ask for the NOTA SIMPLE from the Local Land Registry office.

    Hope the above helps. I am sure that one of our legal eagles will offer their opinion on the subject.

    Katerina

  • #65289
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Michael,

    That is normal. Although make sure that if you decide not to take on the developers mortgage that he doen’t charge you for the cancellation fees of the mortgage.

    I generally advise taking over the developers mortgage if you need one because you save a lot of money.

  • #65365
    Profile photo of Anonymous
    Anonymous
    Participant

    On later phases of the devlopment the developer did mortgage the development and included an appropriate clause in purchase contracts.

    However there is absolutely no mention of a developers mortgage on our property in phase 1 of the development in any clause of our contract.

    We suspect that the mortgage on phase 1 was taken out by the developer after we signed our contract and accordingly our interest in the property should have been notified to the bank concerned.

    Does anyone know how we could obtain further details.

    We don’t want to take over any mortgage the developer has as his bank is 0.5% dearer than our own bank (Barclays) and over the period the additional interest would amount to more than the initial costs.

    Also why should we pay the developers cancellation costs when he failed to notify us that he was mortgaging.

  • #65367
    Profile photo of Anonymous
    Anonymous
    Participant

    You don’t have to pay his cancellation costs for the mortgage as I’ve already explained to you twice already. Please read my PMs again or else read my first post in this same thread.

    It doesn’t matter if the mortgage was not included in your contract, it could still be there before. Just means the contract was poorly drafted.

    Almost in all, if not all, off-plan developments the developers have a mortgage on the property from the onstart.

    The way to check when was the property mortgaged is by asking at the Land Registry.

  • #65511
    Profile photo of Anonymous
    Anonymous
    Participant

    Does anyone know if this is legal? I bought off plan from Polaris world in 2004. I went over to have a look at how the development is doing and found that PW had changed the plans and have built a supermarket in front of my villa instead of the villas on the original plans. I had no notification of this and their reply to my complaint is that it does not affect my villa! Of course the potential resale value is affected. I have been told that to go to a soicitor is going to be a waste of time and money. Any thoughts?? Thanks.

  • #65513
    Profile photo of Pablo
    Pablo
    Participant

    Hello all legal eagles

    Sorry if I am asking you to repeat answers given already, but we all like to know what happens in our specific circumstances.
    In my case the developer wanted stage payments for my villa in 2004, but I could not afford all the stages only the first 30% which I paid in May 2005.
    The builder suggested he could fund the build until completion on three conditions.
    1.I paid his interest charges specified at a set sum and put into the contract
    2. I paid for the Aval, again at a set sum
    3. I paid for any other finance charges arising from his builders mortgage.

    My solicitor was unhappy about these terms but I wanted the villa and so I agreed for these terms to be included in the contract. The builder said that nearer completion I could identify the terms relating to the subrogacion by meeting with the Bank. He told me which Bank to open my account with which was the Bank underwriting the scheme..CAM.
    A couple of weeks ago I was on site and pleased to see my villa approaching completion. This was confirmed as November by the builder, but I was very surprised to hear his mortgage was with the Banco Guipazcoano and he suggested I meet with them. I intend to do this but as my relationship has been developed with the Cam Bank and I have a U.K account with the Halifax, I would prefer to deal with either of these Banks.
    If I tell the Banco Guipancoano that I don´t want to proceed with them, will I end up paying the builder more money. And has the builder acted improperly by not advising the correct Bank until recently.

    Thanks

  • #65516
    Profile photo of Anonymous
    Anonymous
    Participant

    @pablo wrote:

    Hello all legal eagles

    Sorry if I am asking you to repeat answers given already, but we all like to know what happens in our specific circumstances.
    In my case the developer wanted stage payments for my villa in 2004, but I could not afford all the stages only the first 30% which I paid in May 2005.
    The builder suggested he could fund the build until completion on three conditions.
    1.I paid his interest charges specified at a set sum and put into the contract
    2. I paid for the Aval, again at a set sum
    3. I paid for any other finance charges arising from his builders mortgage.

    Pablo, I think the bigest issue is number 3. I dont know if it is worded as loosely as that in the contract, but by agreeing to pay the mortgage finance charge you could find that if you dont take over the mortgage you could be liable for his opening and closing commisions which may be a total of 2% or more of the morgage value.

    You do have certain consumer rights in Spain and in accordance with EEC guidlines “Cláusula abusiva”: This Spanish term refers to clauses in a contract which go against good faith and are unfair. They do not reflect an equal balance between the consumer and the professional – usually to the detriment of the consumer.

    I dont know if this could be applied but it is certianly worth checking out.

    Jim

  • #65525
    Profile photo of Anonymous
    Anonymous
    Participant

    Seem to have drifted way off my original question.

    Many thanks to Draken for his comments, as always useful and most helpful

  • #65600
    Profile photo of Anonymous
    Anonymous
    Participant

    @Maddy wrote:

    Does anyone know if this is legal? I bought off plan from Polaris world in 2004. I went over to have a look at how the development is doing and found that PW had changed the plans and have built a supermarket in front of my villa instead of the villas on the original plans. I had no notification of this and their reply to my complaint is that it does not affect my villa! Of course the potential resale value is affected. I have been told that to go to a soicitor is going to be a waste of time and money. Any thoughts?? Thanks.

    I take it no news is bad news in this case???? 😥

  • #65601
    Profile photo of katy
    katy
    Spectator

    Maddy,You may get more replies if you had started your own thread instead of tacking it on to Michaels. Just my own point of view I don’t think you have any rights in this, it happens all the time, a friend bought off-plan and the “green built” land in front of their apartment now has a mercadona supermarket so their terrace has a superb view of a car-park.

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