Legal contract wording

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This topic contains 11 replies, has 5 voices, and was last updated by Profile photo of Anonymous Anonymous 10 years, 6 months ago.

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  • #51817
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    Anonymous
    Participant

    Could one of the legal beagles please advise me whether the wording below is appropiate and usual in an OFF PLAN sales contract.

    Signature of title deed

    The present contract will be converted into a public deed at the request of either of the parties, at any time after the obtaining of the habitability certificate. The buyer will be forced to accept the sellers designation of the Notary Public before whom the deed will be executed. As an indispensable requirement, the buyer must be up to date with the payments established above.

    Expenses and Taxes

    Costs of deed, Real-Estate record office, and all of the taxes, including V.A.T., unearned increment, and other expenses originating with or deriving from the present sales contract, will be the exclusive responsibility of the buyer. The expenses deriving from the horizontal division and new works will be responsibility of the selling agent.

    thank you

  • #62188
    Profile photo of Anonymous
    Anonymous
    Participant

    The wording is unfortunately usual or common in off plan sales contract but that doesn’t mean it is appropriate.

    The buyer will be forced to accept the sellers designation of the Notary Public before whom the deed will be executed

    The above clause is forbidden by consumer protection laws.

    As for the taxes an other expenses, even though today it’s allowed to freely agree something similar to those stated in your contract I wouldn’t accept paying the REA fees, the unearned increment (meaning incomes related to the property) and a clause so general as ‘other expenses originating with or deriving from the present sales contract’

    The REA is giving a service to the seller so HE is supposed to pay their bill.

    The unearned increment derives from the property. The property wont be yours till completion so Taxes derived from property should be paid by proprietor as HE is the one liable by the taxes authorities because HE is the one who is having an ‘increment’ with the sale (actually there is a Law in process forbidding the seller to impose this payments to the buyer)

    The clause saying ‘other expenses originating with or deriving from the present sales contract’ is too general an so vague it could include anything

    In short, the clause forcing you to go to the Notary chosen by the vendor is void, the rest could be considered ‘legal’ but only if freely agreed, not imposed (I would advice my clients NOT to sign something like that)

    Cesar

  • #62189
    Profile photo of Anonymous
    Anonymous
    Participant

    Cesar,

    Thank you for such a prompt and informative response.

    I would like to ask why the consumer laws appear to be blatantly ignored by >many< lawyers. Are they not leaving themselves in some way exposed to being sued for such actions? (I appreciate that it's difficult to find a lawyer to sue another lawyer)

    Has the Collegio de Abogados got any ‘teeth’? Many lawyers appear to be a law unto themselves.

    If (having signed via Power of attorney) the above worded contract, is there any point in complaining about the poor wording? Can I retrospectively (as part of it is apparently void re the notary) request that a new contract be drawn up?

    Any advice appreciated.

  • #62190
    Profile photo of Anonymous
    Anonymous
    Participant

    The clause regarding the Notario is simply void, you don’t have to ask for a new contract to be drawn. As been void you can act as there was no such clause, the one paying the deeds has the right to choose the notary and that’s a non-renounceable right so it does not matter what the contract says about. If you don’t want to go to the Notary chosen by the vendor just make him know (in a verifiable way)

    If you think your lawyer has let you down, just report him to his bar association they have a special process to deal with this kind of claims/complaints.

    Cesar

  • #62196
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    Anonymous
    Participant

    Cesar,

    thank you once more for your advice.

    With reference to

    If you think your lawyer has let you down, just report him to his bar association they have a special process to deal with this kind of claims/complaints.

    Would the name of the bar association be obtained from the lawyer or is there a list available anywhere that allows the lawyers details to be obtained?

    Regarding my questions about consumer laws. Here in the UK, it would be difficult for a lawyer to produce a contract that violated consumer laws and get away with it.

    This seems to be a grey area in Spanish law?

    What is the actual situation?

    Take yourself for instance, as a practicing lawyer, if you included in a contract, items that flaunt the consumer laws (knowingly), what would you expect to occur when this was discovered?

    A prime example would be the building licence. From what I read, it is a law that a development can only be sold when a building licence is in place? This is not the case in many instances.

    Bank guarantees are another area that seems to have the laws of Spain saying one thing and everyone doing the complete opposite.

    Many people have been waiting many months, years even, before obtaining their rightful bank guarantees. Am I correct in saying that Spanish law says that a legitimate bank guarantee must be produced >when money is received<to cover any potential losses in case the developer goes bankrupt or to cover other eventualities? What would happen to the people that are without this guarantee and the company went 'bust'?

    How can these practices be stopped?

    I apologise for asking so many questions, Im trying to understand the actual situation that exists in the Spanish legal system.

    Thanks

  • #62203
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    Anonymous
    Participant

    Would the name of the bar association be obtained from the lawyer or is there a list available anywhere that allows the lawyers details to be obtained?

    Yes, you may ask him which bar associations he belongs to (he has the legal obligation to tell you) This associations are established in geographical areas, most of them have a public list of lawyers and their details, just tell me where he is based and I’ll try to give you directions of the association of that area.

    Regarding my questions about consumer laws. Here in the UK, it would be difficult for a lawyer to produce a contract that violated consumer laws and get away with it.

    This seems to be a grey area in Spanish law?

    What is the actual situation?

    Take yourself for instance, as a practicing lawyer, if you included in a contract, items that flaunt the consumer laws (knowingly), what would you expect to occur when this was discovered?

    There would be no lawyers nor judges if there were no grey areas in law, here and everywhere…

    But seriously, what is forbidden is forbidden, for lawyers as well as other individuals, even consumers.
    But (and I’m here to open my little bag of hidden legal secrets) there may be sometimes that it may be ‘interesting’ to include a clause about a non-renounceable right in a contract even if it goes against consumer protection law… Sometimes (I’ve done this just a couple of times) I have accepted this clause about the Notario from the other party in a contract in exchange for other compensations… Why? because sometimes I don’t mind which Notario witnesses the signatures (although I make the other party belive I do mind and I need a compensation to accept it) other times because I know that it does not matter to include a void clause… this does not make the contract void, just this clause which, in fact, does not exists as we are renouncing something that we, by law, can’t, but getting a compensation in exchange (giving nothing, getting something) It is delicate, you should have to do it right, with lots of care and know-how and always with the full knowledge of your client making sure he fully understands what we are doing

    A prime example would be the building licence. From what I read, it is a law that a development can only be sold when a building licence is in place? This is not the case in many instances.

    No, you may buy & sell everything which is in commerce, everything. The problem comes when you don’t know what exactly you are buying or when you are buying something different than you thought. So you may buy a development without building license as long as you known it has no license and you accept that with all the consecuences… of course thats not your case nor most people case. You want your house with full licenses and warranties, your are not in a development speculation operation, I understand they are advertising and offering you a development to give you a full finished dwelling and if they don’t give you that there is a fraud.

    Bank guarantees are another area that seems to have the laws of Spain saying one thing and everyone doing the complete opposite.

    Many people have been waiting many months, years even, before obtaining their rightful bank guarantees. Am I correct in saying that Spanish law says that a legitimate bank guarantee must be produced >when money is received<to cover any potential losses in case the developer goes bankrupt or to cover other eventualities?

    You are right, this law comes from 1968 only slightly modified in 1999

    What would happen to the people that are without this guarantee and the company went ‘bust’?

    The answer is in your question… they will loose their time and their money and they will have to go to court to try to recover it

    How can these practices be stopped?

    First being aware of your rights, to do so you need a good and independent lawyer. And always reporting malpractice, law can’t act if there is no report. Failing to provide valid guaranties or insurances make promoters liable to heavy fines and even criminal liability. We lawyers are also liable for malpractice and we do (I sure have) big and expensive insurance policy

    I apologise for asking so many questions, Im trying to understand the actual situation that exists in the Spanish legal system.

    It’s Ok, I know by personal experience that it’s hard to understand a foreign legal system

    Please forgive me as some of my answers may sound a little ‘acid’ not too-good day today

    Cesar

  • #62209
    Profile photo of Anonymous
    Anonymous
    Participant

    Cesar,

    My sympathies to you, I hope you have a better day tomorrow Sir.

    I was going to send you a PM with the details, however, if it serves a useful exercise and can assist others to avoid what is becoming a personal nightmare, then my sharing the exercise will be worthwhile. I have however sent you the details of my lawyers and agents via a PM for reference and hope that you will be able to assist with the details of the appropriate authorities to whom I must address my complaints.

    I greatly appreciate the time you have been taking to respond to my queries in a professional manner. You have told me far more than my agents or own lawyer have been willing or able to provide.

    My final question relates to the full picture as follows.

    I placed my deposit for a property in June 0f 2005 with my lawyer (this was of course a recommended lawyer from the selling agents, (same old story I’m afraid, misplaced trust, I now wish to make the best of a bad situation).

    I asked numerous times the same questions of both the lawyer and the selling agents;

    “Are there any problems outstanding with regards the planning permissions or development proceeding”

    The answers on each occasion were the same from all parties,

    The lawyer said…….

    “There are no issues, the builders and developers are well known and respected, we have never had problems with these builders”

    The selling agents said……..

    “There are no issues, the builders and developers are well known and respected, we have never had problems with these builders”

    Same question regarding the safety of my money, and I was told as follows;

    “By law, the developers have to give you a bank guarantee, this means that the bank have to repay the amounts you have paid if the development does not proceed as planned, however the builders are allowed a 3 month extension to the contract date, plus an additional 3 months maximum, meaning that the property can be delivered late, by a maximum period of 6 months. From this date, the developer is required to pay you 6% interest on the money they have taken from you for the period of the additional delay”

    Based on this understanding, and having asked what I thought would be the correct questions and received all assurances, I decided that all was well to proceed.

    I paid 40% of the total purchase price plus 50% of the lawyers fees as requested (within 90 days of the reservation).

    I received a ‘summary to the private purchase contract’ and was given no indication that there was a problem with the building licence having not been issued. I was also not told that I had NOT had a bank guarantee issued to me.

    I discovered the truth and the real problems by my own research and questions.

    As the situation stands, I have lost faith in my lawyer and the agents.

    The building licence has not been issued as yet, however, is said to be ‘coming soon’

    Same situation with the Bank guarantee, I have not received a copy and would not know of this if I had not sent numerous questions to my lawyer, he was reluctant to talk to me, however, due to perseverance, he was left with no option but to tell me the truth.

    I have written to my lawyers and agents giving them two weeks in order to comply with the law and supply me with a bank guarantee.

    Finally, my questions………..

    How easy or difficult would it be to change my lawyer at this stage?

    From the above circumstances, am I in a position to insist on a full refund of the 50% already paid to the existing lawyer?

    Thanks very much

  • #62213
    Profile photo of Anonymous
    Anonymous
    Participant

    Rumplestiltskin

    Sorry to hear that you have been caught in the ‘lying agent, recommended solicitor’ scenario. May I ask, just for my own curiosity, if you are seeking to withdraw from the contract completely?

  • #62215
    Profile photo of Anonymous
    Anonymous
    Participant

    @Rumplestiltskin wrote:

    Cesar,

    My sympathies to you, I hope you have a better day tomorrow Sir.

    I was going to send you a PM with the details, however, if it serves a useful exercise and can assist others to avoid what is becoming a personal nightmare, then my sharing the exercise will be worthwhile. I have however sent you the details of my lawyers and agents via a PM for reference and hope that you will be able to assist with the details of the appropriate authorities to whom I must address my complaints.

    I greatly appreciate the time you have been taking to respond to my queries in a professional manner. You have told me far more than my agents or own lawyer have been willing or able to provide.

    My final question relates to the full picture as follows.

    I placed my deposit for a property in June 0f 2005 with my lawyer (this was of course a recommended lawyer from the selling agents, (same old story I’m afraid, misplaced trust, I now wish to make the best of a bad situation).

    I asked numerous times the same questions of both the lawyer and the selling agents;

    “Are there any problems outstanding with regards the planning permissions or development proceeding”

    The answers on each occasion were the same from all parties,

    The lawyer said…….

    “There are no issues, the builders and developers are well known and respected, we have never had problems with these builders”

    The selling agents said……..

    “There are no issues, the builders and developers are well known and respected, we have never had problems with these builders”

    Same question regarding the safety of my money, and I was told as follows;

    “By law, the developers have to give you a bank guarantee, this means that the bank have to repay the amounts you have paid if the development does not proceed as planned, however the builders are allowed a 3 month extension to the contract date, plus an additional 3 months maximum, meaning that the property can be delivered late, by a maximum period of 6 months. From this date, the developer is required to pay you 6% interest on the money they have taken from you for the period of the additional delay”

    Based on this understanding, and having asked what I thought would be the correct questions and received all assurances, I decided that all was well to proceed.

    I paid 40% of the total purchase price plus 50% of the lawyers fees as requested (within 90 days of the reservation).

    I received a ‘summary to the private purchase contract’ and was given no indication that there was a problem with the building licence having not been issued. I was also not told that I had NOT had a bank guarantee issued to me.

    I discovered the truth and the real problems by my own research and questions.

    As the situation stands, I have lost faith in my lawyer and the agents.

    The building licence has not been issued as yet, however, is said to be ‘coming soon’

    Same situation with the Bank guarantee, I have not received a copy and would not know of this if I had not sent numerous questions to my lawyer, he was reluctant to talk to me, however, due to perseverance, he was left with no option but to tell me the truth.

    I have written to my lawyers and agents giving them two weeks in order to comply with the law and supply me with a bank guarantee.

    Finally, my questions………..

    How easy or difficult would it be to change my lawyer at this stage?

    From the above circumstances, am I in a position to insist on a full refund of the 50% already paid to the existing lawyer?

    Thanks very much

    Hi Rumplestilstkin

    I bought off-plan through M** & their lawyers M E October 2003. My apt is now 10 months late – still not finished & problems with FOL. I went to spain in January to speak with M** and find out what was going on, as my contract contains an illegal clause stating that I am not covered by the BG as I didn’t pay for it! They told me that they were baffled by this and had never seen such a clause!! It turns out that my lawyers (whom they sent me to – same old story – sorry) have allowed this clause in MANY of the contracts. I am now changing lawyers and hope that many more people are now aware of the practices of these agents and their collusive companions. I will fight to the bitter end to get my money back – hope you do too.

  • #62218
    Profile photo of Anonymous
    Anonymous
    Participant

    How easy or difficult would it be to change my lawyer at this stage?

    You may change a lawyer the very moment you feel like to, just let him know asking for every document related to your issues.

    From the above circumstances, am I in a position to insist on a full refund of the 50% already paid to the existing lawyer?

    That could be harder but not impossible, there are many others in this forum in the very same situation you are, I’ll PM you later to answer the related private.

    Cesar

  • #62225
    Profile photo of Anonymous
    Anonymous
    Participant

    Rumplestiltskin,

    I’m sure your lawyer MUST be the same one we had! The lines you were fed are verbatum to what we were told re the developers and Bank Guarantee!

    Is it possible to PM me with their name?

  • #62231
    Profile photo of Anonymous
    Anonymous
    Participant

    Thank you for the information.

    I will PM those that have requested.

    AAA,

    It’s not my desire to withdraw from the contract at this stage. I still want the property, however, I also want to deal with people that have some integrity.

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