How do I get my money back if I bought off-plan and my developer went bust?

spanish new development off-plan deposit claim back your money lost

One of many broken developments on the Spanish coast that was never delivered

Did you invest off-plan in Spain during the boom years, only to lose all your deposit and stage payments when your developer went bust before delivering your property? If so, you might be able to get your money back with interest.

During the boom years that peaked in 2008, more than 100,000 Britons and other foreigners purchased Spanish property off-plan or under construction, in the process making large deposits and substantial stage-payments up to €100,000 or more that were supposed to be insured. But when the crisis stuck, and Spanish developers went out of business in droves, tens of thousands of buyers were left with nothing to show for their money. Bank guarantees turned out to be non-existent or worthless. Does that sound familiar to you?

Hope is not lost! Now you really can get your Spanish off-plan stage payments back

If you lost your stage payments to a bankrupt Spanish developer, and stood by in helpless despair watching your deposit guarantees turn out to be empty promises, you could be forgiven for turning your back on Spain. But, thanks to a landmark Spanish Supreme Court ruling in December 2015, you now really can get your money back, plus interest, from the banks who were meant to safeguard your deposits if developers went bankrupt. In the light of this ruling you can now go after the developer’s bank if the developer failed to deliver your property or return your money. Note, however, that all claims must be made by October 2020, after which date the window of opportunity to claim your money back gets slammed shut.

How long do claims take to win?

Valid claims take on average 12-15 months to process from initial consultation to clients getting the money back in their bank account.

What’s the claims success rate?

Some legal firms report a success rate of 98% in off-plan deposit recovery claims.

How much can you get back?

Successful claimants get back their deposit back plus legal interest of 4.5% per annum, minus legal fees.

How much will it cost?

Some legal firms charge nothing upfront, just a percentage of the money they get back for you if they win (no-win-no-fee). Because successful claims often come with legal interest accrued over time, many clients can expect to get back more money than they lost, even after fees are deducted. Note, however, that if you lose your case, you have to pay court fees, even if you don’t have to pay legal fees. But good lawyers will not take on cases they don’t think they can win, and some also offer their clients the option of ‘no costs whatsoever’ in return for a higher success fee, for clients who don’t want to take any risk of court fees, no matter how small.

How do I go about claiming?

If you lost money investing off-plan with a developer who went bust you can now claim your money back from the developer’s bank, thanks to a judicial ruling that have put banks on the hook for safeguarding the deposits they accepted on behalf of developers. However, there are some conditions to be met and you have to make your claim before October 2020, when the window of opportunity closes. Check out the service directory for a legal firms that specialise in off-plan deposit reclaims.

Bear in mind that, whichever legal firm you choose, they will need the following documentation / information to start assessing and preparing your claim, so it would be helpful to start gathering it.

  1. Signed contract between the client and developer
  2. Proof of payments into a Spanish bank account. Don’t worry if you didn’t pay the developer directly but instead paid your lawyer. Spanish Legal Reclaims will work with you to prove the money was transferred to your developer, so they can progress with your claim
  3. Judgments. If you’ve previously tried to claim, it’s important you let Spanish Legal Reclaims know about it before proceeding
  4. Any other supporting documents for the property. For example, property developer plans

If you lost money to a bankrupt Spanish developer with nothing to show for your off-plan deposit and stage payments then you might be able get your money back from the developer’s bank. But remember, the window of opportunity to claim your money back slams shut in October 2020, but which time all claims must be submitted. So don’t delay, and find a professional to help you claim in our service directory.