- May 9, 2006 at 11:41 am #51792
I am looking for some advise on what to do next. My problem is that I have signed a contract to buy off plan in Oct 2005 and paid a first installment. Since that time I have had no sight of my bank guarantee and , up to now, have had assurances from the developer that it will be available “in two weeks”, and this by phone never in writing. Now I cannot, and my solicitors seemingly cannot, get a reply from the developers.
Beacuse there is no guarantee in a reasonable time I am assuming the developer is in breach of contract.
I would have thought there would be some consumer legislation that I could envoke rather than a lengthy civil action.
- May 9, 2006 at 4:43 pm #62063
As a lawyer I am sorry to say that your lawyer should have never allowed you to sign that contract and pay the deposit without the bank guarantee being ready, or at least one of the clauses in the contract should oblige the developer to hand the buyer a copy of the bank guarantee.
This subject has been discussed in this forum in several occasions, and it always becomes clear that one of the main issues when buying off plan is the bank guarantee. In Andalucia now we have rather strict regulations regarding off plan purchases, one of the main point of that “new” laws is the requirement of bank guarantees.
What to do now you may ask, well you are not now in a very strong position as you can imagine after having paid the deposit, your options:
A) first of all your lawyer MUST get that bank guarantee, he must put preassure on the developer, enquire at the bank that financing the development, etc. He must get that document for you. You should be very strict with your lawyer about it.
B) Do no t pay any more installments until you get the guarantee, as that bank guarantee specificallly covers the installments.
C) Threaten the developer with publishing your case in the local (and not so local as well) media and other actions, I know by experience that threatens works !.
José María Sánchez Alfonso
Costa del Sol, Málaga
- May 9, 2006 at 5:05 pm #62067
Is the “new” law in Andalucia retrospective?
The reason I ask is because a number of people in our group who are/were buying on the same development as us do not have a BG. These people were mostly dealing with a LARGE firm of lawyers based in Puerto Banus. One particular person attended a preliminary court hearing last week for which he has had to pay these lawyers 7,000 euros to take the case to court because THEY failed to get his BG! Thejudge?said the developers have a case to answer and the next hearing is in July. These lawyers are asking others to pay a further 4/6,000euros to go to court to challenge the developers for breach of contract. This is on top of the money they have already paid to them. (lawyers) I spoke to this member of our group yesterday ad he cannot understand why he and others do not have a BG, when many of us have. The lawyer said to him that there is a “group” BG. By this I guess it means there is just a “common” to all BG, which is useless!! 👿
- May 9, 2006 at 5:43 pm #62068
Hi Claire, nice to hear from you, I have been away from the forum for a while for few reasons.
Only exceptionally an spanish law would be retrospective.
The andalusian law I mean was a subject in one of my postings, I made a long translation into english of it contents ( I am sure you can find it, something like new law protecting consumers ). It mainly tightens the control on sale of off plan properties and obviously one of te main requirements is the Bank Guarantee. This new regulation is rather new and it implements the DIA (Documento Informativo Abreviado) which ALL developers AND agents selling off plan properties MUST have in their sales offices. The information that DIA must contains is rather long to repeat it here, please read my posting regarding that subject.
But the legal duty for the developers to issue a bank guarantee to buyers comes from an old law, as old as 1968!, after that year there another laws enforcing and confirming that legal obligation for the developers.
Honestly Claire I cant imagine many buildings in the Costa del Sol older than that.
José María Sánchez Alfonso
Costa del Sol, Málaga
- May 9, 2006 at 6:58 pm #62071
We have missed you!! 🙂
Thank you for clarifying that point. What that means is that the lawyers failed these people, the developers failed these people and they are getting away with it.! 😈 The purchasers are now having to pay more money to get their own money back!!!!
- May 9, 2006 at 8:55 pm #62077
These lawyers could be in bed with REA -and developer- that sold those people the properties. I suspect they have vested interests in not pursuing the BGs so as to please the REA involved in the transaction.
IMHO clearly the lawyers aforementioned are at fault and shouldn’t be paid any more money. I would expose this case to the media as a clear abuse of these lawyers.
- May 9, 2006 at 9:21 pm #62078
It always seems to go round in circles in this country doesn’t it. If there is a bank guarantee why can’t the developer sidestep the developer and present their case to the bank who has underwrote these projects? If a bank issues a guarantee surely they are ultimately responsible.
The same answers to serious shorfalls on completed projects (eg. missing garage doors, sinking swimming pools etc.). on the forum lawyers say at one point don’t complete and on another post you may lose your 30% deposit…come on which is it?
- May 10, 2006 at 8:30 am #62083
1) Don’t complete If the developer is at fault. You force them to mend all the flaws before completion or else practice a retention at completion until the outstanding flaws are fixed (after completion that is). Your lawyer will have to send burofaxes or requerimientos notariales to justify and demonstrate they are not at fault by refusing to complete because there is one or more legally justified reasons not to do so.
2) If the developer is not breaching an essential clause of the contract but you without any justified reason don’t want to complete (because you hoped to sell on the property before completion for example) you risk losing 10-30% of the funds already paid (the amount varies and depends of the contractual clauses). You cannot possibly refuse to complete without a legally justified cause.
What is it that you don’t understand ? It’s very straightforward.
- May 10, 2006 at 1:22 pm #62089
I get a bank guarantee from a developer , after many unsucessfull requests and tries , by firmly mentioning to him the Consumers Law and the local newspaper.
Maria de Castro
- May 10, 2006 at 1:32 pm #62090
The lawyers on here sometimes give conflicting answers. (I am not going to trawl through all the posts to give quotes.) One question was that a person was not happy as all the facilities had not been provided and some snags. part of the answer was that they could lose their 30% if they did not complete.
My other question was if a buyer has a bank guarantee and (as in the case of Claire) there hasn’t been and won’t be anything built why cannot the bank who issued the guarantee be approached for the money? they would appear to be ultimately responsible. I guaranteed a mortgage for my son in the UK. if he didn’t pay they would come to me for the money.
- May 10, 2006 at 2:55 pm #62093
Katy, the banks do not want to pay out on these BG, so we’re told.Therefore they will use literally any excuse not to pay up. In our case it is one clause that says “Oct 06”.Our BG was drawn up AFTER the developers knew they could not build not when the contracts were signed as our then lawyer told us it would be !! 👿 My guess is, had the BG been issued when it should have been we would have had a date of 2005.The developers have held onto our money for 3 years. As our current lawyer says, they know they are going to have to pay us and it is going to cost them more in interest at the end of the day.
I think, even though it is in the hands of the Court, the bank may still be difficult. It stinks! 😈
- May 10, 2006 at 7:50 pm #62097
Katy there are no conflicting replies. Have you carefully read my posts ?
You cannot refuse to complete without a justified legal reason and may be forced to lose the % the parties agreed upon the contract which may be 5%, 30% or whatever . You keep insisting on the 30% which is untrue. Every contract is different and some are more draconian than others.
- May 10, 2006 at 8:02 pm #62098
Its not just your posts I am querying to just the lawyers on here per se. Yours are ususally more sensible so don’t get paranoid! Anyway isn’t promised and advertised facilities a good enough reason. You seem to have misread my posts when you raise the question of not wanting to complete because of not been able to sell on I never raised this point.
I haven’t bought off-plan, (never would) own a perfectly legal property (well, I think I do, who knows in this third world corrupt country) but I do know that if you are a foreigner all the odds are stacked against you.
- May 11, 2006 at 7:45 am #62103
Katy: With all my repects to you, I consider your statements about my country quite offensive and disrespectful. Please think of those people who try hard to offer the best of Spain.
My very best to you all,
Maria de Castro
- May 11, 2006 at 7:58 am #62105
Katy I know. That’s why I started posting in the forums. I was surprised when someone attacked spanish lawyers so I decided to post and help foreigners at a loss. It affects my job and me personally for buyers to mistrust spanish lawyers.
The whole point of posting here for me is to help stranded British or Irish real estate purchasers.
When dealing with these problems there is always more than one answer and what might work for someone could prove a hazzard to someone else.
From the moment you sign a private contract with the developer you are obliged to complete.
Normally you complete once the LFO has been granted.
The problems arise when there are still flaws or things are missing etc.. In some cases it is advisible to complete practising a retention in other cases one should not complete UNTIL the underlying problems are fixed (i.e. regular water and electricity supplies hooked up to the main grid, LFO granted etc…) but the lawyer has to make sure they are withholding from completion because there is a LEGALLY justified reason in any case. It’s like case law, you have to operate case by case, it’s very hard to give general rules for everyone. You can give some broad guidelines such as avoid completion without the LFO but after that it’s the details that make every case different.
- May 11, 2006 at 8:01 am #62106
Maria, you should be looking at it from our viewpoint. We( British) put a lot of trust in the people we deal with in your country. I know they may be a minority, but they have a huge influence on our perception. You can hardly deny the corruption allegation in the light of “White Whale” and the imprisonment of the Mayor of Marbella & her colleagues! I am sure it is difficult for you to read what we all have to say on this forum.
- May 11, 2006 at 9:32 am #62110
Katy, who is paranoid now? Just because you are a foreigner does not mean that you are going to be ripped off. I have learned and had lots of help on this forum. I can only congruatulate the lawyers and others who give their time and expertise to this forum for free. The only people I have been misled by are Brits and only received help and support from the Spanish profession ( Sarah included ) Spain is a wonderful country with lovely people and yes of course you get bad eggs here, but that you do in other countries too.
- May 11, 2006 at 10:09 am #62111
I very much doubt that corruption on the scale being experience in Marbella comes under the heading of a few ‘bad eggs’.
- May 11, 2006 at 3:44 pm #62116
Thankyou Draken for your post , you explained it really well and made it very clear for me now. Thanks very much 🙂 🙂
- May 11, 2006 at 6:42 pm #62120
You’re welcome !
- May 12, 2006 at 9:17 am #62126
Drakan, thanks for the explanation. I think the time you give to the forum is commendable. It was also the law I was taking a pop at as in many cases there never sees to be an outcome. I could give you at least 5 examples of people known personally to me who have had bad experiences. Take the case of the former mayor of marbella, he should have presented himself at the prison on May 2nd to serve a 6 month sentence (after a 2 year delay!) He then filed for a pardon will he ever serve the sentence nah. The law seems to protect the offenders.
Maria de castro, I was not being offensive by criticising the corruption in Spain. Many spanish do so and as a resident, who voted in the last election I am entitled to state my view. Part of my phrase of a third world corrupt country was taken from something said by a spanish politician last year and was widely reported. He said “Spain is a third world country in disguise”
I have owned properties in Spain for 20 years and have never seen property scams on this scale until the last several years all of them aided by professionals. Marbella is just the tip of the iceburg, had it not been a political decision the same would happen to Manilva, Benalmadina, Mijas and many others.
- May 12, 2006 at 4:14 pm #62134
Spain has its faults, as do all countries. But it’s fabulous place to live, not least because of the Spanish, which explains why so many other Europeans are trying to move here.
I’m in a reasonably good position to judge, and from what I can tell the lawyers who participate in this forum are all first rate. They do a great job of trying to answer some tricky questions, questions to which there is often no straightforward answer. I for one am very grateful to them.
- May 12, 2006 at 4:57 pm #62135
Hear Hear Mark – let’s have a bit of “positivity” about Spain and the Spanish.
We have recently bought a house near Antequera and are delighted with it. All the necessary licenses are in place and most snagging issues discovered upon completion were dealt with effeciently and quickly.
Our Spanish casa is in a better state than the newbuild house we bought just 8 months ago from one of the UK’s biggest builders. The ceilings have all been replaced three times!!And they aren’t right yet.
- May 13, 2006 at 2:48 pm #62146
Claire, Thanks for your reply to my query on El Soto. I will pursue the claim for interest and will let you know how it goes. Re Greenhills : are you saying that after Oct 06 you will be able to effectively cash in your BG and recieve your deposit plus interest or is it not that simple. I cannot undertand why, with all the other Breaches of Contract on this development, your lawyers cannot invoke the BG earlier. I just hope your nightmare is over before Oct. Will be looking out for you on News 24 tomorrow. Good Luck .
- May 13, 2006 at 4:34 pm #62149
Anne, do you know what time om news 24?
- May 13, 2006 at 4:43 pm #62150
Stina, 8.30/8.45 tomorrow morning so set the alarm!
- May 13, 2006 at 4:52 pm #62151
ACTUALLY…I’m not so sure! 😕 At 8am on BBC1 they are showing AGAIN…the FAcup final highlights! Breakfast starts at 6am so it could be any time between 6 & 8am. Set the recorder! 🙂
- May 13, 2006 at 5:15 pm #62154
Claire, Direct Auctions have an apartment under offer at Greenhills, it was for sale at 240,000 euros, surely people aren’t daft enough to buy with all this uncertainty!
- May 13, 2006 at 6:15 pm #62155
Our lawyer visited the site today presumably because I had sent him 2 photographs showing the road to the lower blocks, the only ones built, cordoned off. These were taken by a purchaser in our group at the end of April. Our lawyer said it was not cordened off today and there are people who are living there …without the LFO!!
I am confused & bewildered! 😕
I have just had a look at that property. The Photos are misleading. The terrace view is taken from an advertising brochure, long before they were built as is the bathroom & kitchen They are from another development. The last picture is nothing to do with the development and one of the other pictures of the three pools is not on this development.
Do people buy from these auction sites without seeing any details about licences etc? 😯
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