November 10, 2005 at 9:59 pm #51355
Hi Drakan, if you are still reading this website I was wondering if I could ask you another question. You have stated before that typically if you pull out of an off plan purchase then you would probably forfeit 50% of your deposit. I pad a 40% deposit and have now found out that the contract states that if I pull out I would forfeit 30% of the price. Therefore I could only get back 10% of the price. My lawyer was DLM which I now know had strong ties to the developer. Does this clause seem unfairly biased towards the developer and therefore could it be considered under Spanish Law that my lawyer has not adequately protected my rights?
Also, my lawyer signed the contract and never informed me of the details. Even after asking numerous occassions they still would not tell me. I never gave the lawyer poa so legally can they sign for me? They say they have signed under my verbal mandate? What exactly is that and is it considered legally binding?
thanks for your help
November 11, 2005 at 12:01 am #59821
Not half your deposit, all your deposit.
The clause is extremely abusive, to say the least, to keep 30% of the purchase price.
Normally in an off-plan purchase there are three steps:
1. You pay a non-refundable deposit (normally 6.000 euros).
2. You sign a private contract a month later with a downpayment of 20-30% of the purchase price.
3. You complete at the notaries two or three years later paying the remainding 70-80%.
If you pull-out of a contract before completion because you cannot find a buyer to your property and don’t want to take on a mortgage, you normally lose the deposit and half of the private contract’s downpayment (that is half of 20-30%= 10 or 15%).
So all in all you lose 10-15% of the purchase price plus the 6k deposit. This is rightful because If everyone did this the economical viability of every development would be at jeopardy because of the uncertainty of clients pulling out at will.
However, this is a far cry from losing 30% as your lawyers have done.
A verbal mandate is when the lawyer is acting as a verbal proxy. It’s only valid when you confirm later on what your lawyer has done in your behalf.
So If you haven’t granted a power of attorney, If I were you I would avoid avoid/refuse paying. If you haven’t signed that contract personally nor have you granted a power of attorney then you are not legally binded to the contract.
Seek advice with another unbiassed law firm asap. PM Mark, the forum administrator, for reliable law firms/lawyers.
November 12, 2005 at 8:38 am #59838
thanks for your reply. The problem being is that I have already paid 40% down payment. Just to remind you, my property was one that was seized in the white whale operation. The judge is now allowing completions but however I now do not want to complete because the flat is extremely poorly built and also is not finished. If I completed I would probably have to pay out of my own money to get it finished e.g garden laid etc. I also do not want to give any more money to criminals. I think the whole thing was a scam between the developer, agent and lawyer although would be very hard to prove.
I understand your point about there must be a penalty to pull out which I am agreement with. But even if I got half of the money back that I paid then this wouldn’t be as bad as losing all of it.
Can I ask then by paying the 40% so far does that mean in Spanish law that I gave my verbal mandate? If not then do you think that I may have a case to bring to the Malaga Law Society that:
1) I never gave my lawyer my permission to sign on my behalf to such unfavourable conditions.
2) My lawyer did not act in my best interests?
November 12, 2005 at 11:16 am #59842
If you’ve already paid 40% you’ve agreed “tácitamente” to the contract stipulations albeit unbeknowst to yourself that is no legal excuse.
A different matter would be If you had only paid a deposit and nothing more and no POA granted.
I’m sorry, but in a contract almost anything may be agreed between the parties that enter to it just as long as it is legal according to Spanish and EU regulations.
If your lawyer agreed that in case you pull out you lose 30% of the purchase price, then that’s what you lose. And there is little that you can do.
I find it horribly abusive that clause, just goes to show how little your lawyer fought for your interests when drawing up the contract with the developer. He should have forwarned you of such a draconian clause.
You don’t lose anything taking the case to Málagas ICAM (Bar Council) and filing a complaint for abuse, it’s free for you. Better than nothing.
November 14, 2005 at 6:20 pm #59851
thanks. If I did decide to log a complaint with the Malaga Law Society and they found this clause in the contract to not to protect my rights adequately then could they order the lawyer to compensate me?
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