Spanish Property Deposit Refund Ruling

Spanish Property Deposit Refund Ruling

You may have read or heard that a recent Spanish property deposit refund ruling has gone against Spain’s financial institutions. This is correct. It stems from a landmark judgement by the Spanish Supreme Court in late December 2015. This ultimate judgement found that Spanish financial institutions’ arguments against their liability to refund deposits for incomplete properties were unfounded.

The case for having a Spanish property deposit refunded is not due to any single ruling it is, rather, a collection of rulings over the past number of years. As these rulings are all by the Spanish Supreme Court the English translations should not be relied upon, they are merely to give a flavour of the ruling. The overview’s presented below should not be construed as legal advice. They are merely being used to outline in general the judgements which allow an off-plan purchaser who did not receive a property, to reclaim any funds placed in a Spanish bank account for the purpose of securing that property.

STS 499/2013 (rough English translation)Spanish Property Deposit Refund Ruling

This ruling establishes that the provision of a bank guarantee to an off-plan purchaser is legally required providing:

1. The property is not yet complete
2. No Licence of ‘First Occupation’ has been attained.

In such a situation the off-plan buyer is allowed to cancel the contract and claim back the deposit plus all interests due in full. Prior to this ruling the lack of a bank guarantee meant not having a claim for a refund. This ruling means that the lack of a bank guarantee is not an impediment to taking a case to recover invested funds.

STS 2391/2014 (rough English translation)

This ruling refers to insurance of the initial reservation deposit plus all funds lodged in the specified bank account prior to completion. The Supreme Court upheld that the full amount lodged up to completion is guaranteed. Lenders and insurance companies often guaranteed less than the amount paid. Even if you exercised your bank guarantee and waived the right to reclaim the full amount, the ruling states that any agreement is null and void and you have the right to reclaim the remaining funds.

STS 275/2015 (rough English translation)

This refers to the obligation of a developer, rather than a buyer, to place all the funds received for an off-plan purchase in a special account. Because it is deemed the developer’s responsibility rather than the buyer’s, the fact that funds were not placed in such a protected account, which was often the case, does not impinge on the buyer’s right to reclaim these funds.

STS 426/2015 (rough English translation)

This ruling specifies that purchasers of off-plan property who were never given a bank guarantee, which they were obliged to receive by law (see first ruling outlined above), can claim their deposits from the financial institution with whom their funds were deposited, despite not having a bank guarantee. This holds regardless of a developer’s solvency status.

This ruling also states that the reclaim on a bank guarantee by an off-plan purchaser has a statutory claim period of just 15 years. This is an extension on the previous limitation.

STS 429/2015 (rough English translation)

This ruling exempts a claimant from having to first sue the developer to recover funds transferred to a Spanish financial institution for the purposes of paying for an off-plan property. The buyer can sue the lender, or the insurance company that issued the bank guarantee, without having to first sue the developer. This is quite important, as many of the developers in question are now insolvent. The judgement states that all parties are ‘jointly and severally’ liable for the breach.

The information above is courtesy of Spanish Lawyer, Raymundo Larraín Nesbitt. You can find the original extended article on the Spanish Supreme Court Rulings in question on the Spanish Property Insight website –

Click Here to Caim your Spanish Property Deposit Refund NOW

As you can see from the above rulings, time is of the essence if you wish to reclaim your funds from Spain. If you would like to find out if you have a case Spanish Reclaim will assess your documentation for free. Contact us now on or call one of the numbers above.

Spanish Property Deposit Refund Ruling

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