Off-plan deposit and stage payment reclaim FAQ

Many people who invested in Spanish property off-plan during the boom years leading up to 2007 lost their deposits and stage payments when the real estate crash wiped out developers before homes could be delivered, and deposit guarantees turned out to be worthless. Now were are helping hundreds of those people recover the money they lost, plus legal interest, in the light of a recent legal ruling that enables them to reclaim their money from the developer’s bank. Here we answer some of the questions we get most frequently asked.

How many people lost money this way?

Around 600,000 people are affected, Spanish as well as foreign buyers (mostly British and Germans as well as some Americans). They invested before the property and economic crises.

In which areas of Spain?

Most foreign investors bought off-plan in Andalusia and the Valencian Community, although there are cases throughout Spain.

What can you claim for?

You can claim any amount paid for the purchase of a home, permanent or second, that you bought off plan (before or during construction) before completion if the developer breached the contract and the property was never delivered. You cannot claim for industrial warehouses or business premises.

How much can you claim?

You can claim all the money you lost, plus legal interest of around 4%.

What conditions do you have to meet?

You have to have invested before the 1st January 2016, and demonstrate a contract with the developer. You must also prove that the developer breached the contract and the property was never delivered, and that payments were made into the developer’s bank account.

What paperwork is required?

You need to produce a copy of the purchase contract for the property, proof of payments made, and proof that the developer failed to deliver the property within the agreed time frame.

Where do you claim?

You make your claim directly to the bank that received your payments. If the bank doesn’t pay up, you can take it to court.

What is the timeframe for claims?

Claims should be presented before the 6th October 2020.

In what timeframe do you get your money back?

This depends on whether the claim is settled in or outside court. If the bank settles out of court, expect it to take a couple of months. Court cases can take up to two years.

What is the probability of getting your money back?

Very high. At least 90% of those who claim get all their money back.

How much did investors lose on average?

Foreign buyers lost around €100,000, and Spanish buyers around €80,000 in payments for properties that they never received.

What is the legal basis for making a claim?

In December 2015, a Spanish Supreme Court ruling found Spanish banks responsible for protecting off-plan deposits and stage payments made into the accounts of developers held with them, based on a law passed in 1986.

Among other requirements of the 1986 law, banks were obliged to ensure that developers had insurance or a bank guarantee for amounts received from off-plan buyers, and that these payments were held in separate accounts opened exclusively for the purpose.

The December 2015 Supreme Court ruling gave off-plan investors the green light to recovery the money they lost from their developer’s bank.

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