Dear Sir or Madam,

You depict a difficult case.

I'm surprised you have not set a charge (provisional embargo) on the developer's assets, merely as a precaution. As we we write, there's no point in litigating if there are no assets. It's just throwing away good money after bad litigating.

10 Reasons Why Your Case Against a Spanish Developer May be Thrown Out of Court - 30th September 2008

Quoting an excerpt:

It is not advisable in general to sue a developer which has no assets under his name; a law suit in such a case would be a complete waste of both time & money. In short, it would be putting good money after bad. That is why on suing, your litigation lawyer will endeavour to find developer’s assets and request from the judge, if needed be, to place a provisional charge. This will effectively avoid the developer selling-off these assets as they have a legal hold placed on them. This encumbrance placed by your lawyer will ensure your financial interests depending on the ruling’s outcome.
More on placing charges on debtor's assets:

Is Litigation Against Spanish Developers Worthwhile? - 23rd May 2008

Quoting an excerpt:

What happens if a developer files for bankruptcy?

In accordance with Law 57/68 a purchaser can claim on their bank guarantee or insurance policy during the construction process, as they are executive titles which secure their interim payments. If they don’t have the guarantees or insurance they stand to lose all their down payments.

That is why if you do not have a bank guarantee, on filing a law suit, a litigation lawyer will request provisionally for a hold to be placed on the developer’s assets until the final ruling. This stops the developer from selling these assets and they act as a sort of guarantee (it isn’t really a guarantee in the sense of a bank guarantee) to recover the stage payments at a later date. The judge has to decide on whether they will allow it or not. The plaintiff’s lawyer will have to prove not only that his client has a case but also that the developer is undergoing a delicate financial situation which may lead him to insolvency in the future.

On seizing the developer’s assets the judge will request that you place an amount of funds in court as a guarantee for the developers’ frozen assets. This amount varies for a standard off-plan purchase in proportion to the value of the assets requested to be frozen. The aforementioned amount is refunded to yourself when the final ruling is published, which puts an end to litigation (long before the assets are sold off in a public auction). However if your lawyer loses the case these funds may be used by the defendant as guarantee. A further non-refundable amount of approximately 2.500€ will have to be paid as well as associated expenses on executing the developer’s assets (auction appraisal, execution procedure, barrister fees etc).

However, in many cases the developer’s bank accounts are frozen (with funds in them) or out-of-court settlements are reached before the ruling, so there is no need to provide the guarantee on the developers’ frozen assets because the stage payments may be obtained by other means.

I trust the above is helpful.

Yours faithfully,
Raymundo LarraĆ*n Nesbitt