August 3, 2010 at 8:25 pm #55791
Back in 2003, we, along with several other punters, deposited c.60,000 Euros with a supposedly reputable firm of solicitors in Marbella to purchase an apartment off plan.
We were assured that all the guarantees/insurance was in place in case the worst was to occur, and signed up accordingly.
Approximately two years later, we learned that the builder had gone into receivership and the bank, being the preferred creditor, had repossessed the building site.
Our lawyers said they would fight to reclaim our money and asked us for a further 1800 Euros, a supposedly discounted rate.
When we enquired about the insurances/guarantees, which every developer had to have in place at that time, we were told that they were fraudulent and therefore, no use at all. When we enquired about the possibility of the lawyers being negligent, we were informed that as it was a fraudulent act by the developer (who has supposedly taken/hidden all the cash somewhere), then the lawyers were exempted from any liability.
A director of the developer has since appeared in court in 2007 but very little else has happened since despite our harassing the lawyers concerned.
Do we have any recourse other than to wait for the Spanish legal system to grind its way through the gears or could we sue the existing solicitors for negligence? We have heard that Spanish lawyers are very reluctant to sue one another! We have also heard that there is a statute of limitations on such actions and that the lawyers, having taken our money, will just wait a while longer and pocket our cash having done nothing at all!
Any suggestions, or the names of really good lawyers, either in the UK or Spain, particularly those who may have sued other solicitors, would be much appreciated. Also, if anyone else has had a similar experience, it would be useful to know.
August 4, 2010 at 7:34 am #100211
Hi Lindsay – sorry to read of yet another ‘mess’.
You say: “We were assured that all the guarantees/insurance was in place in case the worst was to occur, and signed up accordingly”.
I suggest this as a first step:
These guarantees are called Bank Guarantees, or in Spanish ‘Aval Bancario’. They are issued by a bank on instruction by the developer, and should be issued to each purchaser, complete with your name, address, passport number, details of property, amount guaranteed etc. Know that this is demanded by law and is a legal requirement.
Technically, when you are in possession of an Aval, the issuing bank is now responsible to pay the beneficiary (i.e. you) the amount promised on the aval should things go wrong. That is the theory and as I said, this is required by law to protect the purchaser in an off-plan situation.
Each purchaser should have (and has the legal right to have) either the original, or at least a legally-certified copy. It is your lawyer’s duty to ensure this happens.
However, in practice, many lawyers have been ‘in league’ with developers for the simple reason the developer recommends them to purchasers hence gives them loads of business. So they say a BG is in place, but it isn’t. This will save the developer having to actually log any monies with a bank or prove they are creditworthy etc. They simply can use your money to start the build, or even do a runner, plead bankrupt etc. This is why it is always advised to have an independant lawyer, not one recommended by the developer. Many of us here learnt this too late.
So my two questions are:
1) Do you have a copy of your Bank Guarantee/Aval?
2) If not, do you have it in writing from your lawyer that this guarantee is in place?
If so, demand to have a copy. If he refuses, you now have at least some grounds to start on the legal route.
Whatever happens, you must find a good independent lawyer (with some teeth/backbone) for advice on where you go from here, but chasing the Bank Guarantee as above is at least a first step.
Yes, you are right – most lawyers are reluctant to go after another lawyer, but there are some that will. Some of us here had to do just that. As this lawyer is in the Marbella area, I can recommend our lawyer if you are interested.
What is the name of the developer/development? There may be someone here who has more information on the latest situation or are in a similar position.
August 4, 2010 at 9:16 am #100213
What does the Estate Agent who carried out the operation have to say?
August 4, 2010 at 11:15 am #100214
They will either be very sympathetic but end up saying “there’s nothing we can do, best to seek legal advice.”
Or they will shrug there shoulders (nothing to do with me, guv’ – we just advertise the stuff) and possibly end up saying “there’s nothing we can do, best seek legal advice”.
That’s if they’re even still in business. And why would they care anyway – they’ve had their commission.
Either way, whatever they have to say is irrelevant and won’t help any.
August 4, 2010 at 7:13 pm #100218
Hi Charlie et al
Thanks for your information.
The development in question is/was called “Jardin Tropical” and is in the Riviera area not far from Miraflores/Calahonda up in the hills.
The estate agency in question, Bolands, has “disappeared” needless to say so there is no comeback on that front unfortunately.
The development started in 2003 although I’m not sure where it’s up to now or if it’s even been finished.
All help gratefully received
Best wishes to one and all
August 5, 2010 at 8:55 am #100223
The estate agency in question, Bolands, has “disappeared” needless to say so there is no comeback on that front unfortunately.
Well it looks like Bolands was set up and run by the two sons (Nicholas and Justin) of a very well-known Marbella character, Maurice Boland who has a successful show ‘The Maurice Boland Show’ and launched his own magazine Hi! Society.
With a little bit of google-searching, it seems ‘Bolands’ are now operating in Bulgaria. No surprise there.
“Maurice lives with his wife in a magnificent home nestled in the hills over looking Marbella . They have three sons Nicholas, Justin, both of whom commute between Marbella and Bulgaria where they run a very successful property company and Daniel the baby (24) who has followed his dad into showbiz by recording music and presenting TV shows”.
Showing Nicholas Boland registered: http://www.aboutus.org/BolandEstates.com
Just posting this FYI, unbiased lawyer advice is the best route.
August 5, 2010 at 8:58 am #100224
The last three paragraphs will be of interest:
BANK GUARANTEES IN SPAIN
It is a legal requirement in Spain that the developer must provide a Bank Guarantee or Insurance Certificate to the purchaser covering ALL payments made in advance for the purchase of a property.
The Bank Guarantee or Insurance Certificate must be issued immediately the funds are received in the developers Bank or Savings Bank account.
Being issued with a Bank Guarantee or Insurance Certificate is the purchasers legal right and although there are costs involved in setting up these guarantees the developer must not make a charge to the purchaser for the Bank Guarantee or Insurance Certificate.
Deposit funds paid in advance for a property must be held in a Bank or Savings Bank Special Account (Cuenta Especial).
The Special Account must be separate from any other account held by the developer and must only contain funds to be used for the construction of the property.
Details of the Special Account together with the name of the Bank or Savings Bank must be detailed in the Sales Agreement / Purchase Contract.
All advertising and promotional material published by the developer that refers to amounts being paid in advance must state in which Bank or Savings Bank the deposits will be held and give details of the Special Account in which the funds will be secured and protected.
The Bank or Savings Bank must demand and ensure that the Bank Guarantee or Insurance Certificate is issued. It is the responsibility of the Bank or Savings Bank who accepts the off-plan deposit to ensure that the Special Account is opened and the Bank or Savings Bank must either issue the Bank Guarantee, demand that the Bank Guarantee is issued or verify the existence of a Bank Guarantee or Certificate of Insurance to fully cover the off-plan deposit funds held in their custody.
The Bank or Savings Bank are the guardians of LEY 57/68. If the Bank or Savings Bank accept funds paid in advance by purchasers and fail to protect those funds in a Special Account or fail to verify that the Bank Guarantee or Insurance Certificate is issued then they are guilty of Gross Negligence and action may be taken against them for lack of Professional Due Diligence according to LEY 57/68 Article 1.2
A Bank Guarantee or Insurance Certificate must not have an expiry date and does not have to be ‘renewed’.
The Bank Guarantee or Insurance Certificate only expires when the Certificate of Habitation (Licence of First Occupation) is issued by the local Town Hall. At this point the Bank Guarantee is no longer valid and it is therefore in the purchasers interest to complete the purchase as quickly as possible after the issue of the LFO / COH.
If the construction does not commence or finish by the deadlines set out in the Purchase Contract then the purchaser has the right to execute the Bank Guarantee or Insurance Certificate and receive a full refund of the deposit together with the addition of interest at the Legal rate as detailed in the General Building Act 1999 LEY 38/99.
The Lawyer acting for the Purchaser has a duty to ensure the account to which the deposit funds are paid meets the strict requirements of LEY 57/68.
The Lawyer acting for the Purchaser has a duty to ensure that the Purchaser’s deposit funds are only paid to the Developer’s Special Account after details of the Bank Guarantee or Insurance Certificate have been confirmed by the developer and guarantor. Once the funds are transferred to the developers Special Account the Lawyer must make every effort to obtain the Bank Guarantee or Insurance Certificate.
If the Purchaser pays the property deposit to the Lawyer’s client account and the Lawyer forwards those funds to the developer without securing the Bank Guarantee / Insurance Certificate and without establishing that the developers account to which they are sending the funds complies with the strict requirements of LEY 57/68 then the Lawyer may be negligent and guilty of acting with a lack of due diligence.
The Purchaser may then have a right to make a claim to the Lawyers Legal Indemnity Insurance for the loss of deposit.
August 5, 2010 at 9:03 am #100225katyBlocked
Maurice Boland had a “colourful” reputation on the coast
August 5, 2010 at 5:06 pm #100228
Lindsey I have sent you a PM re lawyers – Good luck – OliverB 💡
August 6, 2010 at 9:09 pm #100252
Sorry to hear about your situation.
Please go to my website:
I must point out that everything I am doing is on a voluntary basis and there is no commercial element to the website whatsoever. I am a victim of Bank Guarantee abuse – I paid my deposit 4 years ago and never received a Bank Guarantee -my money is at risk!!
You will find lots of useful information on the website regarding Bank Guarantees / Avales Bancarios, including my article which Charlie kindly posted yesterday ‘Bank Guarantees in Spain’.
The website also has a petition which I would urge you to join. We are mounting a huge campaign regarding Bank Guarantee Abuse and everybody who has or is suffering from any issue to do with Bank Guarantees should make their voice heard.
I am leading a group action – FINCA PARCS ACTION GROUP – against the developer Cleyton GES SL and the funding bank who accepted our off-plan deposits and failed to issue or verify the existence of our Bank Guarantees – Caja de Ahorros del Mediterráneo (CAM Bank).
You may also find some interesting info on: http://www.fincaparcsactiongroup.com
August 7, 2010 at 6:45 pm #100264
Wow, I remember the finca parcs being pitched at A Place in the Sun by Aramis Investments, saying “Hellin, the inland Costa Blanca..” shame we didn’t have google maps back then!
Shady bunch those guys of Aramis, they set up at least 2 firms in Torrevieja, I think the guys name was Martin (not sure).
August 8, 2010 at 9:06 pm #100274
Yes, about 90 minutes from the coast – ‘real inland Costa Blanca’!!
Aramis – took loads of deposit money in 2004-2006, failed to pay it all to Cleyton GES SL (the promotor) then very quickly went into Administration with massive debts and finally last October the company was liquidated and wound up.
They did a lot of damage to Cleyton GES SL, the promotor of Las Higuericas Finca Parcs. But Cleyton GES SL were greedy for reservations in the early days of the project and that is why they got involved with a company like Aramis. Very bad business decision and that is one of the reasons why purchasers who reserved through other agents are all suffering now without Bank Guarantees.
It is terrible and CAM Bank were instrumental in creating the illegal situation of lack of Bank Guarantees.
August 9, 2010 at 6:56 am #100278
Maybe the wrong thread to talk about this but it was strange when I say Hellin being promoted at A Place in the Sun on a huge stand in 2006. The stand was exclusively dedicated to the Finca Parcs promotion and at 350 pounds a metre and an 80 m stand with all the trimmings…hey, do the maths. Silly money!
Of course, never saw them again. They even did promotional shows at Stanford Bridge (that what the website said at the tiem). The firm I was with was quite close to their stand and I could hear the girls manning it saying…”yeah, I got another 10 sales (leads)…”
August 9, 2010 at 7:34 am #100280
Yes, no wonder Aramis went bust.
Aramis did put on a launch party at Stamford Bridge – they took reservations and donated one Villa (plot) to Bob Wilson’s charity. Of course the charity never received the Villa as it was never built.
I think Cleyton GES SL – the promotor of Finca Parcs – were sucked in by all the promises from Aramis.
February 11, 2014 at 6:33 pm #119142
Has any one been the victim of bank guarantee fraud. My partner and I purchased 2 apartments in a development called Jardin Tropical, the developer was Larios 2000.The development never got built,Larios 2000 went bankrupt so did the insurance company responsible for underwriting the bank guarantees,Compagnies Des Guarantees.My Spanish Lawyer was absolutely useless and said there is nothing we can do.We stand to lose our lifes savings 100000euros.If anyone can offer any help or advice it would be greatly appreciated. Unfortunately the loss has left us with no spare funds.
February 11, 2014 at 9:44 pm #119143katyBlocked
You could try a word with Antonio Flores
April 20, 2014 at 11:03 pm #119435
Very useful item on the belegal site Katy that the schemes offered by the likes of Winchams to put Spanish property into a UK company may be ruled as illegal tax avoidance ! My own view is that this was too expensive for an ordinary 2nd home buyer because of the recurring charges being disproportionately high anyway. The large number of people abandoning Inheritances due to costs might be avoided by making the Testament out to several relatives with a proviso that the one you want to have the use of it should refuse to sell and they just have to wait -if they all are left the free amount 7500 at minimum there would then be no tax to pay within 6 months of decease and that looks perfectly legal to me.I have written further on this on another thread. I have emailed belegal for a comment hopefully. I need to get a Testament done -at 70 I might go to 90 but who knows !
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