Daily Mail Spanish Deposit Refund Article
If you invested in a Spanish property that was never built then you will have had a lot of interest in the Daily Mail Spanish Deposit Refund Article first published back in 2013. It referred to a UK citizen named Keith Rule. Mr. Rule took a legal action against CAM bank, subsequently subsumed into Sabadell.
In 2006, Keith Rule put deposits on two off-plan houses in Albacete province in south-eastern Spain close to Murcia. The properties were to be built in a high-end Finca Parcs development. He had intended to move there with his his two young children. But the purchase quickly became a nightmare, Spain’s housing bubble very quickly burst and the properties were never completed. He contacted the bank where he had sent his funds, then CAM but then taken over by Sabadell, looking for his money back. The bank steadfastly refused to return his deposit of £45,983 (which amounted to €53,000 at the time).
Mr. Rule wasn’t prepared to settle for this answer and found a 45-year-old property law using Google Translate and then encouraged his solicitors to take on the bank using this law. LEY 57/1968 was to prove very useful. Mr. Rule gathered a small group known as the Finca Parcs Action Group, against the Bank.The 1968 law would find banks and developers ‘jointly and severally’ liable for deposits placed on property. What this means is that if the property is not built and the Spanish developer is not in a position to refund the deposit, the bank must ultimately do so. The solicitors were loath to take the case, fearing that he would lose. There were issues with Law 57/68, which Mr. Rule proposed to use to challenge the bank in court. The law mentions bank liability but does not specify how the law would be enforced. The case was, however, eventually successful.
Although Mr. Rule won his case in 2013, there were issues which made his case and others in his development unique. Firstly, they had written to the developer telling the company they wished to cancel the purchase once it was obvious that the property would not be built. He also did not possess a bank guarantee which could be enforced. Many banks did not provide bank guarantees because developers refused to pay for them. Up until this ruling it had been taken for granted that those without bank guarantees would never receive a return of their funds.
Since that time it has been ruled that, even in the absence of a bank guarantee, the bank is liable to refund money outlaid. The banks were found to have been flouting a law making them responsible for the provision of a bank guarantee. Spain’s banking system appealed the decision to find them liable for refunding deposits as it was obviously likely to cost them a lot of money. A Spanish Supreme Court Ruling on Spanish Deposit Refunds at the end of 2015 finally found against the banks and for the owners of unbuilt property around the country.
The Daily Mail Spanish deposit refund Article is all well and good, but what does this all mean for you as a purchaser of a Spanish off-plan property that was never built?
This case and rulings which followed, have opened the possibility for those who put deposits on property in Spain in the past 15 years (this is the statute of limitations on this law) to reclaim from the bank into which their funds were lodged. They are also entitled to get a refund of any interest payments accruing over the period since the money was transferred into the bank account.
You need to apply for the refund, no bank is going to tell you that you can get your money back. You can also only claim once, so be careful who you get to do the application for you. We work on deposit refund reclaims on a daily basis so are totally familiar with the documentation involved and the diligent process needed to steer them through the Spanish court system.
If you would like to know the requirements for making a Spanish Deposit Refund claim then use this link. Please do get in touch if you would like to obtain a free analysis of your case. If we take on your case subsequently we will do so on a ‘no win, no fee’ basis.
If you are interested in further information send an email to info@SpanishReclaim.com or call one of the numbers above.