Insight from Spanish Legal Reclaims into the whole business of recovering off-plan stage payments from the banks of bankrupt developers

Luis Cuervo, CEO of Spanish Legal Reclaims, off-plan deposits and stage payments lost to bankrupt developers in spain
Luis Cuervo, CEO of SLR

Spanish Legal Reclaims (SLR) is a legal advisory firm that specialises in claiming back off-plan payments from the banks of developers who collapsed before delivering the homes they had been paid for. This specialisation gives them a unique perspective on the consumer drive to reclaim lost deposits from Banks. Luis Cuervo, head of SLR, answers some of my questions on the subject.

How many buyers lost their off-plan payments, and how many of them came from abroad?

As per the lack of official data, only estimations are possible. The UK Center for Economic and Business Research stated in the Daily Mail: “Analysts at the Centre for Economics & Business Research suggest 130,000 British purchasers are owed between £10,000 and £500,000 each.”. We estimate a total market of 600.000 properties undelivered, of which some 250,000 were for foreign buyers, 130,000 of them from UK.
What is the average claims size you are seeing?:
103,000 euros (legal interests included).

What are the main problems or challenges you have discovered helping people get back their off-plan payments?

The first problem we encountered is that many people who lost money do not believe they can now get their money back, or they are tired of fighting…. Which is as petty as this is real: We are winning in Court against the Spanish Banks time and again.
The second problem we found is that most Britons who bought in the boom years can’t tell you their developer’s bank, which you have to know in order to go to court. In many cases they paid their deposits to their former lawyers, who then paid the developer, and even the lawyers don’t remember the bank’s name. Unless you are sure of the bank you can’t make a claim. But thanks to our specialisation and the large database we have built up specific to this problem, we can correctly identify the bank for UK claimants in more than 80% of cases.No one else in Spain can do that as far as we know.

If someone has a valid claim, are they guaranteed to get their money back?

It’s impossible to guarantee 100% success in any court case. But we offer our clients a 100% no win – no fee agreement, and if they want, we can also cover their only risk in claiming, namely the litigation costs to be paid in case of losing. This shows how convinced we are of winning. SLR is specialised in this legal matter – we don’t offer any other legal service. So, as a consequence, all risks are for us, not for claimants.

Is it possible to lose money trying to reclaim, thus throwing good money after bad?

Not if you claim though SLR because, as I mentioned above, we offer the option of covering litigation costs in the event of losing, so it costs you nothing even if you lose. However, I don’t know of any other claims company that offers this option, so yes, it is possible to lose more money if you lose a claim with another company without the benefit of SLR’s guarantee.

Is it easy for SLR to reach foreign buyers who might have turned their back on Spain in disgust?

Due to the amount of people affected, and also the fact that they spread all over the world (though mainly in the EU), letting the people know they have this opportunity is really difficult and expensive. We do our best and spreading the news is important so we encourage and reward anyone who refers a client to us. In addition, we publish articles in the Media as much as we can. When speaking to customers we realise how sceptical they feel about returning to problem that made them suffer so much in the past. Many of them do not understand how claiming against the Banks is possible after losing their money at the 2008 crisis… The answer is simple: An old law in force in Spain obliged Banks to protect the buyers off-plan deposits, but they didn’t. The Spanish Supreme Court has recently ruled they must now do so at least 3 times (becoming a case of law) opening the doors to anyone affected to recover their money from banks (who do have money… unlike bankrupt property developers). SLR is winning cases bigtime. So this is not just a possibility. Is already happening in real life.

As the off-plan sales business recovers, could the whole scandal of people losing money off-plan happen again, or will it be different this time round because the banks are now clearly responsible for guaranteeing payments?

We don’t think the scandal could happen again. We believe everyone has learned the lesson now (especially the banks), and Spanish law still protects buyers, now even more so. But our advice for new buyers is always to request written and signed guarantees for the sums they pay in advance. And always keep those document handy.