Buy-To-Let Investors Backing Out of Spanish Off-Plan Deals Face Court Action
Promaga/Vista Hermosa, Hercesa Dona Julia, Altos de Alcaucin and Arrohabitatge/Don Juan are some of the developers/developments which, having read a recent article published on the Daily Telegraph titled Buy-to-let investors backing out of off-plan deals face court action, are now avidly typing their lawsuits. The article goes on to say:
UK Buy-to-let investors reneging on off-plan property purchase contracts need to be aware that they risk losing more than just their deposits, warns City law firm Wedlake Bell. It said “hundreds of buy-to-let investors have already been pursued through the courts for trying to wriggle out of off-plan contracts'”.
Developers have 2 options if they want to cause concern to their (still) clients:
- Option 1: they can file a suit in their countries of origin through the local Courts as the address on the contract is normally their home address.
- Option 2: they can file a suit in Spain in accordance to the jurisdiction clause (which invariably says Spanish Courts are competent) and request that the suit in notified in the Uk, or if the address for notification is their lawyers’ address, have defendants summoned through the former. A favourable Court sentence can then be enforced in the UK.
It may sound as if I wanted to take sides and encourage these horrible developers, as some want to put them, to take away the sleep from Spanish off-plan property buyers, but far from this it is a warning that these things happen here as they are already happening in Britain and presumably an various other countries. It is therefore not something exclusive to Spain as in fact Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters is applicable to all the UE and is now being used with success by claimants all over Europe.
On my next post I will explain how we are using this EU regulation in an interesting (and reverse) case against OceanView Properties and Manilva Costa S.A.. Our client sued these 2 companies for contractual default in the purchase of a property in a development known as Gardens of Manilva and won the case. We are now enforcing the sentence in Seville, where the developer is based, and are not expecting any disruptions in the process of having it accepted and upheld as, after all, Europe is now a one big country!
Hello
I find the above blog confusing as it seems to suggest Developers can go direct to british courts without going via Spanish first. ( I accept they would go to British later)
My PPC says only Malaga court is allowed as court to settle disputes. This is a pity as British courts are much stricter on breach of contract ( eg 1 day late is breach) whilst Spanish have it seems different attitude to time! Also they are considerably cheaper, although legal advice similar in cost
Dear Christabel,
Normally contracts will stipulate that Spanish Courts will have jurisdiction over disputes stemming from Spanish property contracts and so the case would be heard here. It may however happen that if the developer sues in the UK and you accept jurisdiction then it will Uk Courts taking charge of the matter although not necessarily UK laws will apply as Spanish law may be enforced on the case. As you see it can get complicated but this complication is beneficial for the consumer, you in this case.