What are my options if the buyers of my property, who have been living in it for two years after paying only 25% of the purchase price, refuse to pay the balance.

Property Law

Antonio Flores Vila

7th of October 2002

Q. At the end of 2000, I agreed to sell my property to an English couple who lived in Spain for a number of years and owned a number of businesses.

At the time I accepted a 25% deposit on the house as security and signed a contract drawn up by their gestor. Somehow I was talked into handing over the keys after I had been paid the deposit and gave them in good faith with the belief that the buyers were only going in to measure up for renovations/decorations.

It has been nearly 2 years since this deal and I have had no further monies from the buyers. However in this time they have rented the property to a number of people and they have just moved into the house themselves recently.

Having heard that the couple involved had made a number of bad business investments I proposed selling the property to someone else and refunding their deposit. I was told that they wanted twice what they paid me as a deposit back if I wanted to sell to someone else as they had spent a great deal of money on renovations. They have refused to let me see the house but I have been told by a friend who has seen it, and neighbours, that no such renovations have occured and if anything there is substantial damage to the property.

My patience is now wearing very thin.

As I still have the house in my name how do the original buyers stand legally and what actions will I need to take to remove them from my property if no amicable agreement can be reached?

PS. The contract drawn up by the gestor does not mention a completion date or any penalties from pulling out of the sale.

Neil Murray
UK

A. Dear Mr. Murray,

Certainly your situation is unpleasant, but it does have redress. What strikes me the most, however, is that no completion date was fixed in the contract, although if we think that the ´gestor´ was representing the buyers, it may have been part of a pre-conceived plan to attempt to cunningly access ownership of a property without paying the full purchase price: if they thought they could achieve this, I can only describe it as wishful thinking.

In my opinion, the best way forward, after having the buyers lived in the property for almost two years, is to send them a notarised notice/letter, where you give them a period of time to complete the purchase and pay the balance, informing them that not paying up the balance would amount to a contractual rescission with loss of 25% paid up to date. A month is a reasonable period.

I would add in the letter that the purchase price is to be increased in the rental payments which you are entitled to by virtue of a verbal rental agreement, as they are enjoying the property whilst you do not have possession and you are losing the interests of the capital you should have already received. This should put you in a stronger negotiation position.

The worst case scenario is that you end up in Court, with the judge fixing a date for the buyers to pay the balance and deciding on whether a verbal rental agreement was reached or on the contrary they were given unconditional access to the property, until they completed the purchase.

The fact that the contract does not specifically mention penalties does not mean that you do not have the right to them, it would be down to the judge to decide what is reasonable in view of the circumstances.

You should seek legal advice and take action as soon as possible.

Yours sincerely

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