The Spanish Supreme Court has upheld the rights of home buyers

A landmark case in Spanish Supreme Court obliges the Spanish banks to return the money paid by the clients of property developers as deposits against properties that were to be built in the future.  

Law 57/1968 establishes that real estate developers who received funds as a deposit for a property purchase have a legal obligation to put the money received from purchasers in a specific account and provide their clients with a bank guarantee. The guarantor would then be responsible for the return of the deposits in eventuality of the developer failing to deliver the house within the agreed time.

Many banks neglected to comply with this statutory requirement for developers to place customer deposits into a separate account and allowed these funds to be deposited into a general account, and by doing so  permitted  the promoters to use these funds in other areas leaving their clients without a safeguard for their money which was should have been allocated for the construction of their houses. 

On December 21, 2015, the Spanish Supreme Court has established “that banks are responsible, together with the promoters for the loss of the clients’ advanced payments ", therefore the financial institutions have no choice but to the refund the amounts of money paid in good faith to the property developers by the purchasers as a deposit for properties that had yet to be built where the bank failed to protect the funds with a designated account together with a bank loan guarantee provided against the possibility that the properties were never built.

This important judgment will allow many national and foreign buyers of off-plan properties whose properties have not been built to issue claims against the Banks.

If you have found yourself victim of this "ghosts" urbanizations for properties bought off-plan, please contact us on +44 (0)207 183 9482, we will talk you through the options and help you start the process of recovering your assets. Our international lawyers are able to provide assistance in English, French, Spanish, German, Arabic and Chinese.

Alternatively email us at: clientservices@giambronelaw.com.