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Can I obtain a refund of the deposit paid on a property if there is a dispute over an ancillary agreement?

Civil Law

Antonio Flores Vila

5th of February 2001

Q. I have paid a deposit on an apartment in Benalmadena in July 2000. We agreed the price and agreed to forward 10% deposit, which we did within six weeks of the initial agreement Subsequent to that the owner expressed a wish to remain in the property for a prolonged time (September/October 2001).

Our initial agreement was for vacant possession but we were willing to let the apartment to the present vendor. The vendor is now not agreeing to the proposed rent which we think is fair considering the term of her occupation and knowledge of market rents within the area concerned. (check rental figures www.goulbournassociates.com/rentals/apartments.htm). We are willing to rent for the term at 120,000 ptas gross per month. (we know we can rent his property privately for at least if not more over that period) The vendors will not agree to this and are trying not to refund our deposit unless we agree to 50,000 ptas per month. We do not believe this sale was conditional to forward rental but the sale agent is telling us that we did not complete on time. We say their rental demands have delayed things!

Will we get our deposit refunded?

Anonymous

    A. As far as I can see, there is a purchase sale agreement for an apartament, for a given price and presumably a completion date (regardless of any rental agreement). In addittion to this agreement, there seems to have been an agreement between yourself and vendor to allow him to stay in the apartment as a tenant, after completion has taken place, for a monthly rental. A dispute has now arisen on the monthly rental amount, and it is holding up the completion of the property.

    Having made a downpayment on a property (10% of the agreed price), you are now entitled to force the seller to sell the grant public deed of conveyance by, for example, depositing the balance at a Notary Public and notifying by the same official channel the vendor your willingness to complete, as agreed. Spanish legislation and courts uphold the principle of ´conservation of contracts´, and unless the vendor has notified you of his intention to complete and you have refused, he cannot call the contract off.

    If he refuses then your best bet is to seek performance of the deal via a Court decision. You will have to sue the vendor and insert a provisional charge in the Land Registry to avoid the vendor from selling that property and keeping the deposit. The rental agreement dispute cannot be used by the vendor to unilaterally rescind the contract and keep the deposit. This will have to be dealt with after completion has taken place, and more likely than not, a favourable court sentence will grant you ownership + possession of the property.

    Do not take into account what the sales agent says, as some of them have the bad habit of making legal considerations without any knowledge, and appoint a lawyer to represent you if you have lost hope of an amicable solution.


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