Signed the rent contract, then found out the property has embargos

Hi everybody,
I found myself in a very tricky situation and would really appreciate advise. I have been notified that the current apartment I'm renting is about to be repossessed by the bank because the owner failed to pay his mortgage. So I started a new property search, came across a lovely apartment on the internet. The agent was very nice and understanding when I said I'm specifically looking from an embargo free property, because I don't want to get a knock on the door from a bank rep. or whoever else saying to get out because the property is repossessed....
So I signed a new agreement on the new apartment, paid a 1month deposit and as agreed with the owner prepared to pay the 1st month rent after all the services connected and I can actually move into the premises. The apartment is owned by an investment company, which signed directly on it's own behalf as an owner. Then I was given a folder with documents, authorisations from the owner and asked to go to the electricity company and water company to connect the services (put them alta) into my name. I went to connect the electricity, the girl in the office said that there was no legal connection on that apartment before, and the owner might have to pay the fine first and then get the connection done, I got a bit alarmed by that, but thought it's because the property is new. Then I went to water office, there I found to my surprised that the water is actually connected from before but was cut off for dept of payment. So out of my own pocket I paid the reconnection fee plus debt, hoping to extract the amount from my 1st months rent later. After all that I decided to check the documents given to me by the agent and fount information from registry dated several months ago, last information written there is that the owner (obviously the investment company) has two embargos, one from tax office and the other in favour of the developer, total amout of embargos reaching hundreds of thousands of euros!!! not just some ibi or community fee debts..... I was devastated...asked a friend who is a lawyer to check it for me...unfortunately, the verdict was - better get out of it now, as the embargos are really serious and for quite a lot of money.... So now my questions is: 1) was it legal for the owner to promote the property for rent and sign the rental agreement if he knows there's a huge embargo and the property? 2) How do I cancel the agreement now? 3)How can I get out of that now without losing the deposit and get back the money that I paid for connection of the services?

Hello Tia,

It is perfectly legal to market a property for rent even if the same has one or various embargoes on it, though the owner will be liable for damages and compensation this situation may produce on the tenant, for instance, in case the tenant was forced to vacate the dwelling before the contract expired.

We would have to check the rental agreement in detail before being able to reply your last questions, and also confirm if the rental system mentioned in the contract is for a permanent dwelling or seasonal rent ( holidays or temporal job transfer ) as this will have an effect on the cancellation of the contract and the course of action to be followed.

If you wish, you can contact me directly and send over a copy of the contract so I can advise further.

Regards,