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The Spanish Lawyer Online

Antonio Flores’ Blog

Thoughts about laws and regulations which affect foreigners in Spain

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Posts Tagged ‘Ocean View Properties’

SunGolf and Ocean View Property Scandal Hits the Headlines

February 19th, 2011

The SunGolf and Ocean View Property scandal has now hit the headlines, just where it should have been long time ago. But whether this is portrayed as a struggle between two powerful property developing lobbies fighting to control the Dominican turf (Ricardo Miranda on the one side and Sanchez & Lietor on the other), as some wish to put it, the reality is that still over 120 British and Irish property investors are out of pocket through no fault of their own, and no one takes one bit of responsibility.

Mr. Miranda accuses me of perverting the truth in pursuit of media relevance and yet, he does not address the questions raised many times over.

Mr. Miranda accuses me of perverting the truth in pursuit of media relevance and yet, he does not address the questions raised many times over.

It is my understanding that both the President of the Dominican Republic and Monaco Prince Albert, lending their presence to endorse a ghost development, should be held responsible for losses sustained by investors who, having relied on their international prestige when choosing to invest in Punta Perla, are now out of pocket. Their irresponsibility when carrying out appropriate due diligence on the records of Mr. Miranda who, as been published, claimed to have successfully built thousands of properties on the Costa Del Sol (which is false), has to be attributable to a mix of poor advice and, perhaps, succulent incentives.

Some headlines

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Meeting at Stormont Castle to Discuss Case Against OVP/Sun Golf

January 31st, 2011

It could have not gone better: in the space of 24 hours we had managed to meet up with members of the Northern Ireland Executive, deliver the proposal (PDF), be interviewed by the BBC and the Ulster TV, and even catch a flight back on time, not before downing a couple of good local beers.

If the Northern Ireland Government decides to adhere to our proposal, which they will carefully consider in the next couple of months, it will be the first time –that we know of- that an autonomous government supports, in visible way (rather than with well-intentioned words devoid of any practical consequence), a large group of consumers defrauded in a failed property investment scheme.

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Northern Ireland Murlough Beach Vs. Dominican Republic Punta Perla

January 18th, 2011

My recent trip to Northern Ireland could have not ended in a better way: being able to enjoy the stunning beauty of the Northern Irish countryside, mountains and beaches. Strapped to a 4-seater chopper, owned by one young and successful would-be client, we followed the circular route starting off at Ulster Airfield, over Belfast city, across the country side and over the Mourne mountains (no wonder are partly owned by the Natural Trust), the 5-mile long Murlough Beach, returning alongside the coastline of Antrim (where dive-hunting seagulls and even sea-lions could be spotted, or so I thought them to be, as well as countless Saturday beach-strollers).

The underlying motive for my motive is less indulging, as I was meeting 70 or so failed investors who, owing to the combined efforts of Ocean View Properties, Sun Golf Desarrollo Inmobiliario S.L., it’s alleged fraudulent pyramid Ponzi Scheme and, sadly, a few thoroughly bent lawyers, had been ripped off in different degrees of gravity (one investor in particular paid €850,000).

Notwithstanding the economical adverse circumstances, a total loss of confidence in the legal system as a whole (both in the UK and Spain) and an ever-present desire to put this traumatic episode behind them, 2 organized groups decided to formally fight for their rights. Among them, my host for the helicopter trip who will, if I can convince him that we will not be shot down, spearhead an airborne assault on the HQ offices of Sun Golf Desarrollo Inmobiliario S.L. in Madrid after a quick visit to Monaco’s Prince Albert, whose arms helped break the ground on the Punta Perla development (or bluff).

If only NI had the Dominican weather, none of this would have happened. If you don’t believe it, see for yourself: can you really spot the difference between Punta Perla and Murlough Beach?

My next trip to Belfast is scheduled for the 26th of January, when the group representatives and myself will be meeting NI Government officials appointed to act on behalf of the Office of the First Minister and Deputy First Minister. If we can successfully convince them of the beneficial implications of the NI Government joining the Spanish Court case, both in terms of support for the group action but also on behalf of the NI society in general, we will have achieved a huge result.

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Defaulting Spanish Developers to Prove Destination of Deposits, Or Else!

December 20th, 2010

Reading the Times yesterday, I spotted a funny short article written by David Robertson and Deborah Haynes about the British Army’s SA-80 assault rifle. According to the paper, it has been upgraded several times but its long history of problems has led the military to christen it “the civil servant”, because it does not work and cannot be fired.

This quote came to mind when being asked for a second opinion in respect of the case of Urbanizadora Costa Palatinum/Proyectos Antele, another failed project by a developer which I can group with many others that dot the costas and which I dub the “civil swindlers”, because they get paid from you to do something, they do nothing, and there is little prospect of realistically getting any funds back, since they have no equity on their assets and no interest whatsoever in refunding, even though the funds should be in some bank account (with Proyectos Antele, in Venezuela it would appear).

As 30 or so purchasers are being dragged around civil courts pointlessly (for this developer now says he has none of the monies), and considering that nothing has been built on a plot they already owned prior to exchanging contracts, as part of my legal inquest into the death of the development, I would like to ask the developers one straight question: where is the dosh matey?
To not make this post too long, I will quote some examples why Spanish top judges are in disagreement of the activities carried out by developers who do just that (i.e. take money, not build, spend money elsewhere and blame the market) and who are upgraded, from the term “civil swindlers”, to a more adequate “criminal misapropriators”.

Two and a Halve Years Sentence for a Developer in Tarragona

Tarragona Provincial Court ruling of the 5-5-2010 - Perpetration of criminal action consisting on:  Using the funds and not developing the project. In this case, the developer took €24,000 from a buyer for the purpose of building a property and signed an off-plan private purchase contract. In this instance, the accused, with debts elsewhere, used the funds to settle these and did not build the unit. It is highlighted by the courts that the developer was almost fully aware that he could have not received the license since he did not submitted certain documents, which he completely ignored. This developer had boasted being a reputable developer in the area, and, on this premise, the buyer entrusted him with carrying out the agreed job. I cannot but add here that in the Ocean View Property scandal, Ricardo Miranda had boasted to the press, to gullible Monaco Prince Albert and to ever-smiling  President of Dominican Republic, Lionel Fernandez, that 6,000 built units by his “group of companies” preceded him. So either his group of companies encompass Ocean View Properties (who never built but simply acted as unscrupulous agents for several developments -by loading up prices dramatically) or we are going to have to get archaeological experts to dig out those units, most probably built in Phoenician times.

The Tarragona Provincial Audience highlights that the developer had also created an artifice to lure the buyer into buying, and had offered a bank guarantee to cover the down payment (which was never seen).

Three Years and Two Months Sentence for a Developer in Albacete

Albacete Provincial Court ruling of the 1-7-2009 - The Court does a simple mathematical calculation: if when the construction was stopped the developer had only built 43% of his budget (€1,680,000, with a further €2,259,000 to complete the job), had received €3,200,000 from the bank, €980,000 from buyers, having himself put down €2,200,000 (part of which he got back), and after having paid the agents (€240,000) and architects (€80,000), they conclude that there are €580,000 missing

6 Years and 6 Months Imprisonment for Developer

Supreme Court ruling of the 23-12-2006: Perpetration of criminal action consisting on: Using the funds improperly and not for the destination agreed upon on a property development contract.

8 Years Imprisonment for Misappropriation, Swindle and Embezzlement of Funds

Supreme Court ruling of the 22-10-2008: In this case the developer was in the process of obtaining ownership of a plot of land by means of a swap contract, and whilst this was being processed, he started an aggressive campaign of promotion, as a result of which numerous people that wanted to acquire a property contacted the developer, agreed on the terms of a private purchase contract and paid an upfront sum. It is highlighted that these sums were not paid into a special account opened with the bank nor was an insurance policy issued to protect these down payments (in this instance, the developer argued that he could not get a mortgage for the plot in favour of the guarantor, and therefore the statutory obligation to insure third parties’ funds was not fulfilled).

The court found, when sentencing, that the developer did not pay the funds into the special account he was obliged to, in lieu of the 57/1968 Act, and used these funds to pay architects fees, construction costs, license fees, but also salaries and commissions, publicity and promotional issues which were NOT directly related to the construction and which should have been paid by his own pocket. As the developer could not finalize the construction he is deemed to have misappropriated the funds.

In this ruling, the sentencing court establishes that of the funds received (approximately €2 million), 36% have been used for the purpose of buying the plot and the construction whilst 46% have been used for, fundamentally, promotional costs.

One Year Imprisonment for Misappropriation  Reduced  After Refund

Supreme Court ruling of the 27-11-1998: This is probable one of the most relevant ruling in that, not offering the buyers bank guarantees nor insurance policies is deemed as a pivotal evidentiary element within the misappropriation, since the developer had received not only funds from buyers but also funds from the bank, all of which exceeded notoriously the cost of the construction, and therefore misappropriation is likely to have occurred.

In this instance the Supreme Court rules that it is notorious that the developers loan drawdowns were guaranteed by a mortgage, and therefore the pecuniary damage to the individual buyers is complete since not only they receive a property, nor can they seize the assets (since it is already mortgaged), nor is there an obligatory bank guarantee offered to protect the buyers, as the law prescribes.

The court determines that where a developer decides to start a project and received funds upfront, it is not mandatory for these to be blocked in a special account. However, it is essential that these funds are used, exclusively, for the use they were intended to, with the required proof of such use, all the while being protected by a bank guarantee. If this does not happen, the court determines that IF a definitive refusal to refund down payments where the property is not finished occurs, in detriment of the buyers, and NO bank guarantees are available to protect these, such omission to protect the buyers allows the court to conclude that the funds were used with a clear intention of not refunding these, in in a definite manner, and therefore intent to defraud encompasses not providing the said guarantees.

The court concludes that the title by which the funds were received includes an obligation to refund, by normative imposition, in the event that the works do not reach a satisfactory conclusion, and therefore deems illicit the use of the funds without ensuring that these are insured or guaranteed.

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Estepona Beach and Country Club and Operacion Malaya: A Necessary Connection?

March 22nd, 2010

Soon after we received a court ruling against property developer Manilva Costa S.A. as a consequence of its dealings with the demised real estate agent Ocean View Properties (OVP), we began to receive new enquiries from private purchase contract holders of Estepona Beach and Country Club. Purchasers had been left stranded in this legal limbo, perfectly orchestrated between developer, agent and appointed lawyer, the latter being the more reproachable of the three for his failure to even get a contract signed by someone (yes, monies were paid to Ocean View Properties and contracts sent to the clients to sign, and then never returned to them with an original signature; never mind about bank guarantees… frightening!).

But at least though, Manilva Costa S.A. managed to finish the properties, and have a finished product which says something about them, even if the properties were delivered late, specifications did not match the agreed ones on contract, and additional facilities were never built.

What has happened with Estepona Golf & Country Club is similar in its inception, but where the development was meant to go there is a void plot, and of course, as above, no contracts were ever exchanged, no bank guarantees to protect the investment secured, no building license granted and it appears that not even was the plot owned by the developer. Unfortunately for these investors, Spanish lawyers appointed to protect them seemingly worked rather on behalf of the deal, because nothing, except for a receipt, did the clients get.

The consequences are, in principle, that investors are now left with little options to sue on a civil court because they have few or no documents to pursue Sungolf Desarrollo Inmobiliario S.A., the Spanish developer, nor Ocean View Properties, since it is now wound up. So I decided to investigate this matter further, and to my surprise I found an interesting article (in Spanish), where a link is established between the above two companies with the biggest corruption case ever to be started in Spain, Operacion Malaya, and with a development known as Punta Perla, a massive $2.5 billion resort.

According to the Sepblac (Spanish Anti-Money Laundering Specialist Service) Sean Woodhall is the necessary link between the Spanish investors, which include Antonio Roca (the mastermind of the massive Marbella Town Hall corruption ring still in prison), Tomás Olivo (owner of La Cañada commercial center and indicted for money laundering), Carlos Sánchez and Andrés Lietor (both businessmen connected to Roca and also indicted for money laundering), and the Dominican projects. The report also says that Woodhall was fronting Berkeley Property Investments, and was the beneficiary of substantial funds forwarded by Sungolf Desarrollo Inmobiliario S.A, and it refers to a project of 395 units in Estepona it is developing and selling with the assistance of Ocean View Properties (it would appear that Ricardo Miranda Miret, Sungolf director, introduced Woodhall to Carlos Sánchez and defined him as his partner).

If one reads the article and analyses how the whole plan was concocted, it seems clear that there was not the slightest intention to build and sell 395 units in Estepona by either Sungolf Desarrollo Inmobiliario S.A or OVP, respectively, but just to extract €30 million to buy into the Dominican Republic Punta Perla development, which makes this a massive swindle equivalent in size to the Fortuna Land scam although with an international component.

What the Spanish investigators at the time never did was link this money laundering scheme with the Estepona Beach & Country Club scam; pending consultation of the report which we are expecting to get a copy of, it seems that there is sufficient evidence to consider criminal prosecution against Ricardo Miranda Miret, the director of the company at the time (and still is) and its shareholders Rosa María Prado Rubio and Javier Espinosa. The local reporter for El Mundo (largest Spanish newspaper), who incidentally is a client of our firm, has taken a big interest in the matter and we will be meeting him early next week to consider lines of investigation to find out where were the funds paid by buyers for apartments at Estepona Beach & Country Club fraudulently diverted.

Interesting reading:

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Corvera Golf and Country Club: Another Broken Promise

March 6th, 2010

corvera-golf-and-country-clubIn Spanish, ‘La Verdad’ means ‘The Truth’. But it is also the name of a local newspaper in the Murcia region that interviewed, back in 2006, a young and confident looking José Luis Pérez Carrión, Marketing Manager for Calidona. In this interview he extolled the virtues of the Corvera Golf  and Country Club grand project and its impressive facilities, including the PGA Olazabal-designed Golf Course (Ryder´s Cup contestant) and a 5 star De Vere-run hotel, with Spa and so many more luxuries you would expect from a hotel of this stature. Quoting Perez Carrión:

“We offer a different life-style, close to nature and the beach with a view to practice sports within an unbeatable environment and with all the facilities that the client may need. Also, owing to an agreement between the prestigious hotel chain De Vere, specialists in golf accommodation, we will be able to offer the services of a luxury hotel and a Spa.”

It´s February 2010 and la verdad is that there is no hotel, just as much as there is no equestrian centre, sports facilities, swimming pools, tennis club, private gym, commercial centre and a number of other amenities that were the primary reason for a couple of hundred people to buy in this development.

We took an interest in this case after being contacted by a few persons who had bought in Corvera Golf and Country Club, and after agreeing to take up their cases, a lawyer of the firm and a sort of specialist forensic valuer went over to draw up a report on the resort and it’s (lacking) facilities, and indeed it appears that many of them never left Corvera architect’s drawing boards, and are therefore just that, “un sueño” (a dream), as it reads on the bottom left part of the original promotional plan embedded in this post.

This is conclusive that a degree of contractual default has taken place, which will entitle buyers to file for cancellation of the contracts on the basis of misrepresentation. It is then up to the lawyers to argue the case successfully, with as much ammunition as possible (contracts, brochures, articles, witnesses, including Olazabal if required), and propel it to a successful conclusion for our clients, judge permitting.

In a similar claim we filed against Manilva Costa and Ocean View Properties, the judge of First Instance in Estepona granted contractual rescission as he found that the developer “misrepresented and misled buyers by promising, through marketing literature, facilities such as top restaurants, shops, a health and leisure club, tennis courts, Turkish baths, sauna, Jacuzzi, fully equipped gymnasium, heated pool and kindergarten service, and it is clear that none of those have been built”. He then added that “from the documents submitted to this Court, it has been established beyond doubt that the publicizing of these facilities in brochures was a fundamental element in the buyer’s decision to buy, as collectively they had induced him to proceed with the purchase of a property which was located in a relatively isolated development and distant from similar facilities.”

With respect to buyers in Corvera Golf and Country Club Phase IV, the above can be irrelevant because their properties have not even been built and therefore contractual default will come from delayed completion. The rest of phases seem to have been built more or less on time, that is, within 18 months from the date of issue of planning permission (such is the delivery date on the contract) so we are reluctant to base the case on this argument.

As with many other Court cases, we will play the devil’s advocate so as to test the quality of our legal arguments and identify weaknesses in its structure and content since Corvera will fight this case to the end. But still, the De Vere 5 star hotel is just not there!

Our case is due to be filed within days. We will keep anyone with an interest in this development posted through this blog.

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Manilva Costa Uncovered!

November 23rd, 2009

Shell game scamAnyone who has dealt with Manilva Costa S.A. (developer of Manilva Gardens) will know what I am writing about. The elusiveness of this company in respect to their accountability for contracts Ocean View Properties signed, supposedly on Manilva Costa‘s behalf, with mostly British buyers, has forced lawyers to be more creative and find ways to pursue the refund of their deposits for contractual default.

Mates, the developer’s lawyer, has been well instructed on how to deal with private purchase contract signatories to avoid being held responsible for non-delivery of the units on time. The story can be summarized in the following points:

  1. Property buyers looking for investment opportunities on the Costa del Sol were approached by Ocean View Properties, or viceversa, with an offer or few developments owned by Manilva Costa S.A.
  2. Once the buyers were convinced that the investments was sound they went on to transfer a fat deposit to OVP which would in turn send them two copies of the contracts, unsigned, for them to sign and send back. OVP rarely signed the contract although they did acknowledge the receipt of the deposit.
  3. According to Manilva Costa the deposits where never sent to them and according to OVP they were sent (?). OVP, after gathering millions of pounds in deposits for property and a number of vicissitudes, including unconfirmed claims that the owner had died on an airplane crash in Brazil, went on to file bankruptcy.
  4. Buyers stuck with private purchase contracts signed with Ocean View Properties looked to pursue Manilva Costa for the deposits but found an unsurpassable legal impediment: there were no contracts signed by Manilva Costa and neither acknowledgement of having received the deposits from OVP.
  5. In one occasion we sent a legal notice to Manilva Costa S.A. with a request to confirmed having received the deposit of a client they wrote back positively, thus paving the way for a legal claim in Spain.
  6. Manilva Costa Directors quickly realized that they had to stop this and instructed lawyers to deny having received any such deposits. Strangely enough Mates had the details of all buyers and offered them to complete on their properties for the initially agreed prices minus the deposits, even though the denied having received them. To this date Mates is eager to convince clients to close at the original price minus 30% of the purchase price (approximately the value of the deposits).

After meeting with several buyers stuck with this situation we proposed them to file a claim at the Bristol County Court against both Ocean View Properties and Manilva Costa and needless to say, neither of them appeared in Court to contest them. The case was heard and District Judge Britton acceded to the claimants petitions in full. With this Court ruling, which we legalized and translated to use in Spain, we filed for execution thereof in the Court in Seville and requested that a legal charge was taken out against Manilva Costa to ensure that enough funds were available in the likely event the Seville judge ruled in our favour.

We now expect other claimants to follow suit and not allow Manilva Costa to get away with using carefully planned obfuscation to deter their own bona fide clients from demanding justice to be served. After all, as said before, Europe is now a large country where nobody should be able to find legal shelter after deceiving consumers.

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Marbella Judge “Reprimanded” by the Malaga High Court

January 15th, 2009

A Marbella judge ruling has been overturned by the Malaga High Court, once again proving that the interpretation of Spanish property law can vary from white to black in a matter of moments, depending on who is given to the opportunity to opine.

In this specific case the Marbella Judge stated that the lack of First Occupancy License for a property at Santa María Green Hills was not directly attributable to the developer (thereby signalling that it was not an essential part of the contract) and concluded that the buyers could not cancel the contract on those grounds, given that the property was finished and ready for occupation pending compliance with the Marbella General Plan. In this judgement the magistrate even warded costs to the developer.

The Malaga High Court´s conclusion is exactly…the opposite: that the First Occupancy License is an essential part of the contract and that irrespective of the legalization of the development under the new Marbella Plan the developer was at fault for not having delivered a fully legal property on time.

Interestingly my good friend Luis Gonzalez has just won a case against Aifos on behalf of a client who had bought in the development Calahonda Hills, though Ocean View Properties. This judgement is interesting because it forces the developer to return the deposit (40K Euros) plus interest but also the price increase of this same property should the client had wished to buy a similar property at the time of filing the case (what we would call loss suffered or gain prevented). Conversely the judge does not consider the claimant to have suffered any mental anguish over this plight and decides not to award compensatory moral damages.

The above shows that we are still far from knowing what will Spanish judges think and do when presented with similar cases and if there will ever be some form of consensus over this crucial matter. If only someone could get them together in a pub for a round of pints I´m sure we would not have these so-far-apart opinions!

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