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Home > Litigation > Supreme Court to Protect Spanish Off-Plan Property Buyers’ Without Bank Guarantees

Supreme Court to Protect Spanish Off-Plan Property Buyers’ Without Bank Guarantees


A couple of days ago, BBC News readers woke up to a tantalizing headline for failed Spanish property investors: “up to 100,000 UK investors in Spanish homes could get payout”. The BBC quoted a Barcelona-based law firm, Spanish Legal Reclaims (SLR), on the round figure of investors who could in line for a full refund.

A fortnight ago, we almost anticipated the BBC’s article when stating various 2015 Supreme Court rulings had confirmed its support for banking, insurance and, notably, off-plan property consumers:

Off-plan property deposits: In May 2015, and the in December 2015, the SC ruled that property developers are responsible “in any event” of down payments made by consumers on off-plan properties, provided the bank was aware of the purpose of the payments.

The ruling, along with two prior ones, addressed the issue of bank’s duty of care towards consumers, in line with the provisions of the 1968 Act on Deposit Guarantees on Off-Plan Properties.

But whilst the rulings are encouraging for anyone caught in the 2008 off-plan property debacle, not every investor will qualify.

As a rule of thumb, investors will have the right to claim from banks who failed to guarantee deposits in the following circumstances:

  1. That the bank was aware the deposits were for the purpose of building off-plan property; proving ‘awareness’ is pretty simple inasmuch as banks ought to have known that hundreds of thousands of Euros going through developer’s accounts were from property investors. There have been cases where funds were remitted to UK accounts operated by real estate or intermediary companies, a situation that complicates matters. The “Ocean View Properties” off-plan property scandal comes to mind here.
  2. That the properties we not completed or, if completed with delay, that the buyer had formally exercised his right to terminate the contract for breach of contract before the developer had obtained the license of occupancy. Banks–and Courts for that matter- are aware that many thousands who were no longer interested in completing on finished properties will file claims for the return of their deposits.
  3. That the buyer was not a property investor i.e. buying several units for reselling, in which case he/she will not be classed as a consumer under the 1968 Act.

As with most legal matters, a case-by-case analysis will be required to establish the feasibility of a legal claim.

About Antonio Flores

Antonio Flores is the head lawyer at Lawbird, a Spanish law firm specialised in property and litigation. More on .

Litigation , ,

  1. Chris Newman
    May 25th, 2016 at 15:27 | #1

    We invested with Ocean View, Estepona Beach & Country Club, is there any mileage in trying to pursue a claim based on this new ruling in the Supreme Court? I note the comment in your blog that that the situation is complicated when intermediary companies are involved.

    Kind regards
    Chris Newman

  2. Joan Dean
    June 9th, 2016 at 20:48 | #2

    Sñr Flores.Subject to my purchase off plan contract being in order. My question is how much do you charge for acting for me in claiming back my deposit from the bank.
    Also can you explain the general process of claim you would need to make in the court.
    Im told you first have to approach court to give a ruling that the bank has to give you certain information on the solicitors bank account where the money was deposited. Then you file that information with the court.

  3. June 26th, 2016 at 16:59 | #3

    Hello Help please, I saw an add in euroweekly news for the above company and I am the proccess of signing with them, to get back my deposit, Before I do this I want to check their status they are an S.L company, but i read that this is not enough, I have a contact but no company bill head. They are based in Malaga my contact is Sheldon Grossmith company administrator.
    do you know of this company

  4. Antonio Flores
    June 28th, 2016 at 14:02 | #4


    There there is, in fact we have one of such cases currently going through the Courts in Seville. The one objection to the EBCC cases was that funds were being paid to intermediaries but this, at least on our case, has been resolved.
    Feel free to contact us to know more.

  5. david adams
    July 21st, 2016 at 09:00 | #5

    In 2008 I paid a deposit to Citrus Playa Macenas Ltd ( owned by Raymond Warren) on the basis that the money would be transferred to a Spanish bank (Bancaja) and used for a development in Turre.
    I am not sure whether the money was ever transferred and whether I would have any basis for claim but any input would be appreciated.

  6. Antonio Flores
    August 10th, 2016 at 10:30 | #6

    David, we currently have several claims against the Spanish subsidiary of this company and have submitted a claim in a Madrid Mercantile Court to instigate its bankruptcy. This is necessary for us to establish potential bank responsibilities under the recent Supreme court case law. You are able to join these proceedings if you so wish, as of the 1st of September 2016.

  7. Antonio Flores
    August 10th, 2016 at 11:23 | #7

    Joan, I have checked the S.L. company you mention and have not found a lawyer’s name attached to it. This is not to say that they are not bona fide, just that there is insufficient information.

    Regarding the process, it is essential for the Court to be satisfied with the evidence on the bank receiving the deposit. The solicitor that acted for the investor should provide this information.

  8. Mr Carter
    February 7th, 2017 at 19:11 | #8

    Hi, I purchased an apartment in Fortuna Golf via IAP and Plus Advisors. Have not heard from plus advisors for six months and have always doubted they were actually progressing the claim to retrieve my deposit. Can I peruse this through yourselves instead as I have lost all faith in hearing from them again. Any advice would be appreciated. Thank you.

  9. Antonio Flores
    February 28th, 2017 at 14:53 | #9

    Mr. Carter,

    You will be contacted if not already with an update on how our cases are progressing.

  10. John
    November 14th, 2017 at 18:51 | #10

    @derrick whitworth
    Hi Derrick did you end up using the company owned by Sheldon Grossmith?