hello how can a developer force someone to complete can they do this codigo civil 1.504 and is this somthing that happens, because if people pull out why is this code not enforced, or are the developer happey to take all the deposite thanks sky
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hello how can a developer force someone to complete can they do this codigo civil 1.504 and is this somthing that happens, because if people pull out why is this code not enforced, or are the developer happey to take all the deposite thanks sky
Dear Sir,
Of course. Developers can force you to complete on a property which has attained a Licence of First Occupation (aka LFO) (fully legal) as per Art. 1504 of the Spanish Civil Code. This is known as "Forced Completion". They will compell you to complete before a Spanish Notary Public on a certain day and time by means of recorded delivery (i.e. "burofax") to the address you provided in the Private Purchase Contract (PPC), normally your appointed conveyance lawyer's office.
Forced completion is also covered in my article on avoiding off-the-plan pitfalls (specifically read point five):
Buying Property In Spain Tips Part II. Off-Plan Property - 18th April 2010
Failure to do so will result in them not only withholding the deposits as laid out in the PPC but more importantly also they will now be free to take legal action against you for breach of contract as you failed to complete.
It's up to them to decide on whether it's worthwhile or not to pursue legal action against you even in your home country as its a fairly protracted and drawn-out process. Some do, some don't. But they certainly can if they want to. My recommendation is you seek legalk advice from a UK solicitor on the details of sucha procedure and -legal- ways to counter it.
It is something that quite definitely does happen.
Please read real life's example of developer's threat to complete:
http://www.eyeonspain.com/forums/posts-long-7277.aspx
http://www.eyeonspain.com/forums/posts-long-8175.aspx
http://www.eyeonspain.com/community-...ompletion.aspx
http://www.eyeonspain.com/community-...-to-court.aspx
http://www.eyeonspain.com/forums/posts-long-10797.aspx
Even developer's under Judicial Admnistration can force you to complete once the LFO is attained. The fact they are under an Insolvency procedure does not stop them legally from being able to compel you to complete ex Art's 1124 and 1504 of the SCC.
Developers on attaining a Spanish ruling which is final (meaning it cannot be appealed in Spain) can execute it against your UK assets following EU Directive 44/2001 which is applicable to all EU members, and that includes of course the UK and the ROI. In fact as it's a two-way street our law firm has set-up a legal service whereby we act on behalf of UK creditors wishing to seize debtor's assets located in Spain:
Recognition and Enforcement of Foreign Court Rulings
Examples of legal queries we've received over the years on the matter of forced completion:
Can our builder sue us and force us to complete after keeping our deposit?
Andrew
chased to complete
abo07
Can a Spanish Developer force us to sell our house in the UK?
Lynne
What remedies does a developer have to enforce completion
Unregistered
Will i lose my uk home
Unregistered
If we fail to pay our stage payments, can a developer sue us in England?
Simom
Yours faithfully,
Raymundo LarraÃ*n Nesbitt
thank you for your reply as I can not pay the balance due to slow down in my work is it best for me to cancel the contract and ask for half the deposit back by offical letter by notary or is is it best for me to wait for forced completion by the developer as Iwill be paying more money to terminate the contract regards sky
Judging from your last post Sky I believe you have not understood my reply.Quote:
Originally Posted by Unregistered
If you wait for the developer to notify you formally he will then be able -additionally- to sue you and demand that you complete on the property as per the PPC. In which case he will probably withhold the full deposit, not only the 50% as per your PPC from what you write. To opt out and recover at least the 50% of your deposits you have to do it before he notifies you formally. That is why the granting of a LFO is also so important for this very matter.
Cancelling a contract requires you appoint a lawyer, this is not something you can do on your own.
At the initial meeting with our lawyer when we paid our deposit for a 'flipped' property our lawyer repeatedly told us that our money was safe. He smiled indulgently at my repeated questions regarding the security of our funds and kept telling us there was nothing to worry about and in any case the Bank Guarantee would ensure our money was safe. He explained how the Bank Guarantee worked and even offered scenarios in which we might have to claim if anything should go wrong. They also asked us ti give them power of attorney for the purchase of the property as this would mean we would not have to travel back and forth from Spain to sign the contract etc.,
Tired of waiting almost four years for completion and after repeatedly asking our lawyer to seek the return of our deposit under the terms of the 'Bank Guarantee', (to which their repeated reply was that it would involve a very expensive court case because the bank said, ' Only when a judge says we must pay back the money will we return it to the purchasers') we decided to change lawyers.
When we received our file from them there was no Bank Guarantee. I asked them if they had misplaced it and their reply was, 'The developer failed to do his duty and supply one'.
My Questions.
1.Should I sue the lawyers for gross negligence??
2. What do you think would be the outcome?
3. What would be the approximate cost.
4. Where would I find another lawyer with the ability to do this?
5. Would I get back my deposits and also the money that I paid the lawyer for a) Power of attorney ,b) conveyancing services, plus interest and damages?
Thank you.
I guess you don't have the answers and cannot help me.
Or perhaps you do not have the stomach to sue a fellow lawyer. Whatever the reason....Thanks.
Dear Sir,Quote:
Originally Posted by Unregistered
Further to your queries,
1. You may sue the lawyer if you wish alleging professional negligence and claiming on his professional indemnity insurance.
2. We just wouldn't know as it depends on the judge to rule on this matter. However, Law 57/68 stipulates penalties for the developer that fails to comply with this not for the lawyer as not everyone will hire a lawyer to do the conveyance.
3. It depends on many factors, we are unable to give you a general answer. In any case your lawyer should always provide you a Letter of Engagement with a full breakdown of legal fees and expenses as we do. If you don't agree to it, you don't sign it.
4. Propose your case to any lawyer. They must be proficient in litigation however.
5. The outcome will vary. In any case if you claim form thier professional indemnity insurance you could recover the deposits plus compensation and interests depending on the judge's ruling. I doubt you would be able to recover the POA and their professional fees.
Patience is a virtue.Quote:
Originally Posted by Unregistered
Thank you very much for your comprehensive answer.
I now see why the lawyer did not trouble himself to persue the developer for my Bank Guarantee.
He arrogantly regarded providing it as the developer's duty and knew that if anything went wrong with the transaction the blame could be pointed solely at the developer.
He was doing the minimum work for his fee, and he was protecting his own interests first...not mine.
So why did I pay him for PoA? He was paid to act on my behalf and protect my interests.
How does a lawyer aquire the swankiest suite of offices in Marbella when he is so negligent with his clients affairs??
All I wanted was a holiday home in the sun to spend our winters in a warmer climate.
Now, like thousands more,we have lost our money with no chance of being able to afford another property. All our hard work and dreams have come to nothing.
Just one more question. Do you know how many Spanish citizens been caught up in the problems caused with the lack of or failing to produce bank guarantees or is it predominantly affecting foreigners?
Yes, you're right about 'Patience'. But I think that even a saint's patience would be tested when trying to purchase property in Spain.
Dear Sir,
I fully understand your predicament, however no distinction is made between foreigners and Spanish as you hint, they've both been treated/mistreated alike. I suggest you lodge a complaint as well in the Bar Association of which your lawyer is a member, you will have to file it in Spanish. Many people never get to file these complaints in despite of being aggravated and the matter just drifts by oblivious to the Bar Association.
In fact if you follow the link I provided you in my post above to the article on bank guarantees there's a further link to a newspaper article in which the Bank of Spain itself highlights this problem. I believe there's a petition that is circulating over the net on the matter. Perhaps you should join it.
In any case, even if you don't have a bank guarantee and providing your developer hasn't gone bankrupt you can still pull out due to the late delivery in handing over the property and apply/litigate for a refund on your deposits. Please read this other article of ours.
Suing a developer on grounds that he failed to deliver a BG is a bad idea in our opinion as you are bound to lose. Please read this other article. It makes more sense that your appointed lawyer seeks administrative sanctions imposed on the developer for lack of compliance in issuing BGs following Law 38/99. However, this only allows for a sanction, you will not recover your funds on following this procedure. Developers can be fined up to 25% penalty of the amounts they should have guaranteed:
Building Act: Law 38/99
DISPOSICIÓN ADICIONAL PRIMERA. Percepción de cantidades a cuenta del precio durante la construcción.
La percepción de cantidades anticipadas en la edificación por los promotores o gestores se cubrirá mediante un seguro que indemnice el incumplimiento del contrato en forma análoga a lo dispuesto en la Ley 57/1968, de 27 de julio, sobre percepción de cantidades anticipadas en la construcción y venta de viviendas. Dicha Ley, y sus disposiciones complementarias, se aplicarán en el caso de viviendas con las siguientes modificaciones:
La expresada normativa será de aplicación a la promoción de toda clase de viviendas, incluso a las que se realicen en régimen de comunidad de propietarios o sociedad cooperativa.
La garantÃ*a que se establece en la citada Ley 57/1968 se extenderá a las cantidades entregadas en efectivo o mediante cualquier efecto cambiario, cuyo pago se domiciliará en la cuenta especial prevista en la referida Ley.
La devolución garantizada comprenderá las cantidades entregadas más los intereses legales del dinero vigentes hasta el momento en que se haga efectiva la devolución.
Las multas por incumplimiento a que se refiere el párrafo primero del artÃ*culo 6 de la citada Ley, se impondrán por las Comunidades Autónomas, en cuantÃ*a, por cada infracción, de hasta el 25 % de las cantidades cuya devolución deba ser asegurada o por lo dispuesto en la normativa propia de las Comunidades Autónomas.
I trust the above helps you.
The link posted above under 'Petition' is only for those who have Bank Guarantees which are not being honoured. It sounds to me that the 'Guest' who has posted does not have a BG after all.
I hope it is in order for me to post the details of a Petition which has been set up for Everyone who is having problems with their 'property purchase' in Spain.
Many who have signed were told by their original lawyer that they had a bank guarantee, in accordance with Spanish Law, only to find that after all they do not have one. Some were told they don't have a BG because they "didn't pay for it". There should be no charge to the purchaser of the property for this BG.
Our Petition is also compiling a Lawyer Complaints Document, as many of us have had to change lawyers - some three times before they found a reputable lawyer who upholds the ethics & principles of their profession. These complaints are serious and need to be addressed.
I was able to deliver a letter about Our Petition by hand to 10 Downing Street yesterday. Initially I was told that this would not be possible, but after some perseverance and discussion (etc!) I was allowed through the iron railings & the letter was delivered. Our Petition will be handed in to Gordon Brown, the Prime Minister, early in the New Year.
Thankfully, many of us are now with a reputable and diligent lawyer whom we can rely on. Thanks to belegal.com for this excellent website & its very informative articles :)
As I am a new posted, am unable to post the website details but you should be able to find it by googling spanish property scandal petition.
Dear Suzanne,
You do not need to ask us for permission, you should already know you are free to do it. ;)
The link:
http://www.spanishpropertyscandalpetition.co.uk/
Perhaps it would be a good idea if you opened your own specific thread on the matter to raise awareness on the petition.
With kindest regards
Muchas gracias. A new thread has been started under 'General Discussion'.
De nada Suzanne. :)
We are being forced to complete also. The LFO was issued in November but the anticipated completion date we were given was June 2009 when we first signed up. We also bought the apartment to rent out and the promised facilities such as town centres and golf courses will not be ready until long after we have completed. Can we hold off completion until the facilities are in place or could we claim breach of contract because of lack of facilities?
Dear Sir,Quote:
Originally Posted by Bob Marley
I'm afraid you cannot. The communal elements are not regarded as an essential part of a Private Purchase Contract unless it was specifically worded in. You cannot hold off completion when a LFO has already been granted due to this.
Once the Habitation Certificate (LFO) is obtained for your property you are obliged to complete or else face the penalties within your contract. In fact as per our previous replies in this thread the developer can, at his choice, sue you demanding fulfilment of the contract. i.e. that you complete. And developers are doing this.
Once the LFO is granted you cannot really claim a series of breaches such as late delivery etc this ought to have been done earlier on. The main obligation of the developer is to hand you over the property itself, which he has now done legally as there is a LFO granted by the Town Hall.
Hi, I am in the same situation as you. I have now realised how corrupt the Spanish Law is. I cannot see a way out of this. Unless of course you are prepared to spend nearly as much again. That is what my solicitor is suggesting. I did have a bank guarantee, but it expired within 6 months of the original completion date. My solicitor could have renewed it, but she just did nothing at all. I did not know this, until too late, I cannot see the point of having a bank guarantee that expires just when you need it. I think the only way forward is to get together (there are thousands of us in the same situation) and fight the system together. What do you think?Quote:
Originally Posted by Unregistered
Hi, I have been reading the posts regarding forced completion and that this can be enforced against UK and EU assets. What would be the situation if someone, as I do, does not live in the EU? Does this make much difference?
Thank you in advance for your comments.
It depends on where you live, but in general, yes they can.
Can you advise who is responsible for community fees for apartments where investors have paid a 30% or more deposit but not completed the purchase? Does the responsibility belong to the owner or the developer and are they liable for the community fees from the time the FOL was issued (i.e. when the apartment would have been ready for occupation)
Many thanks
BB
Quote:
Originally Posted by Lawbird Lawyer
Dear Sir or Madam,
The granting of the Licence of First Occupation (LFO or Habitation Certificate) is the major milestone in the off-plan conveyance process.
As from the moment the developer attains it off-plan purchasers, regardless if they have completed or not, will be held liable for the outstanding Community fees.
The fact they have not completed on the property is not the fault of the developer and he cannot be held liable to pay for these Community fees, unless he specifically agrees otherwise.
Yours faithfully,
Raymundo LarraÃ*n Nesbitt
I am worried about whether these situations will apply to me. I issued a cancellation notice to a developer, who was in voluntary liquidation, over a year ago. I believe you tried to claim on a bank guarantee at the same development. However due to the delays in the court system I have not had a hearing yet. In the meantime the development is beginning to get back on track with the help of the bank and a Licence may be issued at the end of March. I'm worried that the judge might say it's finished now, so you should complete. There are many reasons that I won't be able to, but if the judge takes this approach is he likely to force completion.
Dear Sir or Madam,
Can you expand more on the "I issued a cancellation notice to a developer".
What does that mean?
Did you retain a lawyer to act on your behalf, such as ourselves?
The fact that a developer files for receivership does not equate to bankruptcy. For example, well-known developer AIFOS filed for receivership last summer. The judicially-appointed administrators are now in 2010 phoning and sending register letters to off-plan purchasers compelling them to complete on those properties which already have attained a LFO issued by a Town Hall.
Failure to comply may result in legal action being taken against them for breach of contract as explained in this very thread even if the developer is under receivership, that will not thwart them. AIFOS was of course suing off-plan purchasers who refused to complete on new build properties (with a LFO) well before they filed for creditor protection.
How can you be sure the developer acknowledged you cancelling the contract and accepting it? Just because you sent them a registered letter on your own does not mean the PPC is cancelled which is why it is recommendable, if not essential, to hire a litigation lawyer such as ourselves to make sure the contract is indeed cancelled and perhaps even litigate. Cancelling a contract is no guarantee that the developer will not sue you.
If your contract has not been cancelled and time goes by, you run the risk the developer will attain the LFO in which case, in despite them being in receivership as you write, you can be forced to complete on the property (i.e. suing you for breach of contract).
As I always advise, in Spain you just cannot walk away from a Private Purchase Contract on either a new build or resale property.- you can be sued in the UK.
As both the UK and Spain are EU members, Spanish court rulings can be executed in the UK against UK assets in compliance with EU Directive 44/2001. In fact my law firm, Lawbird, has a specific legal service set up for it whereby we are hired by UK companies or individuals to enforce UK rulings against Spanish assets:
Recognition and Enforcement of Foreign Court Rulings
It's a two-way street.
Yours faithfully,
Raymundo LarraÃ*n Nesbitt
Patience is a virtue