Spanish Law Tribune

A mere delay in paying the let for a second time, by a non-paying tenant who has been previously sued by the landlord, will be a just cause for an eviction procedure. This new scenario has been made possible thanks to a recent rulling by the Spanish Supreme Court of Justice.

As explained in my article on Eviction Procedure in Spain (http://www NULL.marbella-lawyers NULL.com/articles/showArticle/spain-tenant-not-paying-rent-spanish-property), one of the strategies a non-paying tenant could follow to stall the procedure after the landlord had filed a law suit against him requesting a formal eviction, was by paying late (“enervación”). This stalled the procedure and forced the landlord to continue with the tenancy agreement. Albeit the tenant could employ this tactic only once.

The new change will mean that if the tenant should pay belatedly a second time (i.e. for two consecutive months), after the landlord has previously initiated an eviction procedure for the same reason, it will no longer mean the case can be dismissed or thrown out of court. It will mean the tenant breached the contract. Period. Spain’s Supreme Court has now unified the different approaches and regards that the tenant has breached the Tenancy agreement, provided the contract stipulates a deadline in which the payments have to be met every month.

This puts an end to non-paying tenants which continuously abused the legal system on deciding when they felt fit to pay their landlords in lieu of when they were meant to. This change has been brought about by one of the latest ruling of Spain’s Supreme Court. This is the second ruling on the same issue with a similar outcome which will now set jurisprudence in our legal system. The prior ruling (http://www NULL.elmundo NULL.es/elmundo/2009/06/01/espana/1243864463 NULL.html) is also from this year.

Both of these rulings aim to address the increasing problem landlords are faced with in Spain on letting their properties to professional defaulting tenants. Additionally, the dire financial circumstances have forced what used to be trustworthy tenants into defaulting their lets and abusing our system too. These rulings will now add new legal tools to defend landlords, as in Spain, the laws have been traditionally biased towards tenants for historical reasons which need to be adapted to social reality without delay.

raymundo Litigation, Property evicition in Spain, landlords, Spanish eviction, spanish tenancy, spanish tenancy agreement, tenants

Within the last year we’ve seen an alarming increase in the number of queries regarding the legitimacy of certain Spanish law firms and lawyers. These companies are in fact non-existent and act only as shelter companies devised to fleece foreigners offering them dubious legal services often related to some murky financial interest, which is in the end nothing but some sort of advance fee fraud (http://en NULL.wikipedia NULL.org/wiki/Advance_fee_fraud). Foreigners should be well advised that these scammers pass themselves off as legitimate Spanish law firms and lawyers. They prey exclusively on foreigners and are in fact not even Spanish themselves. Their command of English is very good.

Spanish lawyers belong to one of the numerous Bar Associations that sprawl throughout Spain. There are a total of 83. Every lawyer member of a BA will have a registered number. It is very easy to check in less than a minute if a Spanish lawyer is legitimate, providing he is in fact registered of course.

These fraudsters will always contact you to offer legal assistance in some service of which you by chance are the sole lucky beneficiary. The potential reward to reap is huge (hundreds of thousands if not millions) in exchange of a reasonable legal fee which in comparison doesn’t seem like much. The preffered contact method is email (which they may follow up by ordinary post), and they will offer you either of the following legal “services”:

1. Letting you know that after a long and winding investigation it has surfaced that you are the sole live beneficiary of a considerable Spanish inheritance from some distant relative you had in Spain (unbeknown to you) that has sadly passed away.
2. Offering you to join group actions to recover deposits from bogus resale time share companies in ongoing court proceedings (Reclaim Certificates (http://www NULL.thisismoney NULL.co NULL.uk/news/columnists/article NULL.html?in_article_id=401923&in_page_id=19&in_author_id=5)).
3. Notifying you that you have won the Spanish Lottery (despite never having played it) or that you have been selected in a random draw and are now the lucky beneficiary of a special promotion from the generous Spanish Lotto Administration.
4. Contacting you regarding using your bank account, in exchange of a sizeable commission, for some million dollar bank transfer with origin in some dodgy place in Africa. This is known as the Nigerian Letters.
5. Offer to assist you in the verification and payment of unclaimed funds located in Spain of which you happen to be the only beneficiary.

An example of enquiries about such bogus firms are the following:

• Martinez e Beneficio (http://www NULL.marbella-lawyers NULL.com/forums/showthread NULL.php?t=117)
• Alberto Ganez Y Socio (http://www NULL.marbella-lawyers NULL.com/forums/showthread NULL.php?t=155)
• Perez, Gonzalez and Associates (http://www NULL.marbella-lawyers NULL.com/forums/showthread NULL.php?t=97) & Perez, Carrera and Associates (http://www NULL.marbella-lawyers NULL.com/forums/showthread NULL.php?t=97)

Our recommendation, as always, is to never ever pay moneys upfront if you have the slightest suspicion about the legitimicay of the people you are dealing with.

We have compiled a list of bogus law firms (http://www NULL.marbella-lawyers NULL.com/forums/showthread NULL.php?t=382)which is continously updated.

 
Other interesting related links:

• Protecting Yourself from Pyramid or “Ponzi” Schemes – 21st February 2009
• Fraudulent sell of shares from Spain – Boiler rooms (http://www NULL.fsa NULL.gov NULL.uk/pages/Doing/Regulated/Law/Alerts/overseas NULL.shtml) UK FSA’s link.
• Timeshare resellers: Be careful! (http://www NULL.marbella-lawyers NULL.com/articles/showArticle/timeshare-reselling-scam) – 23rd of August 2001
• Lottery Fraud: Yet Another Scam (http://www NULL.marbella-lawyers NULL.com/articles/showArticle/gordo-sweepstakes-scam) – 24th September 2001
• Is the ‘El Gordo Lottery Sweepstake Company’ a genuine company? (http://www NULL.marbella-lawyers NULL.com/questions/showQuestion/133-Is-the-%27El-Gordo-Lottery-Sweepstake-Company%27-a-genuine--company-)
• European Mediation Limited (http://www NULL.marbella-lawyers NULL.com/forums/showthread NULL.php?t=77)
• Bogus Holiday Club Membership (mostly in Canaries) (http://www NULL.marbella-lawyers NULL.com/forums/showthread NULL.php?t=365)

raymundo Litigation 419 nigerian scam, advance fee fraud, scams

Today, Thursday 26th of February, was the scheduled day for the hearing on Aifos’ second proposed administration procedure. Only minutes before the hearing was to take place before Malaga’s Mercantile Court Number 1, Aifos’ legal representatives striked an agreement (http://es NULL.biz NULL.yahoo NULL.com/26022009/4/economia-empresas-aifos-sortea-concurso-acreedores-alcanzar-acuerdo-acreedores NULL.html) with the legal representatives of the petitioner. Aifos’ lawyers provided guarantees of payment that amounted to €311,000 which were accepted.

Mr Enrique Bujidos, an Aifos’ representative, declared to the press they had hired PricewaterhouseCoopers (PwC) to refinance the ailing developer and help it stand back on its own feet. Thirteen banks have already shown their interest in providing a syndicated loan to the developer as well as adjourn pending repayments.

raymundo Litigation AIFOS, aifos administration, aifos bankrupt, aifos bankruptcy, aifos insolvency, aifos problems, aifos promociones, aifos promociones inmobiliarias

We have today published the first of a series of video blogs on the Fortuna Land Case (http://www NULL.marbella-lawyers NULL.com/wordpress/legal-case-fortuna-land) which we wish to alternate with written information as the case develops. We think it’s a good idea so that anyone who did not have the opportunity to be in the conference we held in Ireland could see what we look like.

Our aim with this flow of information is to help keep clients updated, the case alive and also give anyone the opportunity to comment on each appearance or publication in respect of the updates.

Antonio Flores Litigation bella fortuna, Bella Nevazo, cazadores reales, finca cazadores, fortuna est 2000, fortuna estates, fortuna land, fortuna land investment, fuentespino, fuentespino one, miramontaña alta, miramontaña vista, Nevazo Invest, oanna, oanna group, oanna spain, sierra fortuna

Mercantile Judge number one of Málaga has accepted the second proposal (http://www NULL.marbella-lawyers NULL.com/wordpress/aifos-faces-its-second-forced-administration-procedure) for a forced administration procedure for the developer Aifos, as stated by Diario Sur (http://www NULL.diariosur NULL.es/20090119/local/marbellaestepona/admitido-tramite-concurso-acreedores-200901191922 NULL.html).

In a resolution from 8th of January the magistrate considers that Aifos now meets the necessary criteria to be declared under administration. Formerly the first forced administration proposal was rejected because the magistrate was of the opinion that its insolvency had not been substantiated enough in the petition. This second proposal has proved satisfactorily that Aifos owes, at least, 7.9 million Euros to different creditors.

Aifos will now be given a formal opportunity to object to the forced administration procedure proposed by one of its numerous creditors.

raymundo Litigation AIFOS, aifos administration, aifos bankrupt, aifos bankruptcy, aifos insolvency, aifos problems, aifos promociones, aifos promociones inmobiliarias

It seems that the Operacion Fuentespino, the name given by the National Police in Spain to the Fortuna Land case (http://www NULL.marbella-lawyers NULL.com/wordpress/legal-case-fortuna-land),  is gathering pace as a significant (although small in comparison with the real figures) number of people who invested in the scheme have decided to group to press charges against the perpetrators.

When approached for advice in respect of how to go about filing I cannot stress enough the importance of coming up with a solid, well-presented and well-argued suit so that there are few options for the defendants’ legal team to stall the proceedings in favour of a more lenient and slow civil case.

This means that a “denuncia” per se, whilst it is a way to inform the authorities that an offence has been commited, does not make the claimant part of the procedure and therefore he will not be entitled to argue the case, counter-argue, propose measures in respect of the suspects (even their freedom), their assets or those of third parties who have somehow taken ownership (for example, Finca Cazadores, now in the hands of a company and an individual), appeal Court decisions, request information from bank accounts in Spain or abroad, propose interrogations or testimony depositions etc.

Whether we like it or not, the above case by-and-large affects foreigners (perpetrators and victims), originated in a little known investment concept in Spain, the land banking business (except for property developers) and would be widely considered as a white-collar crime in most jurisdictions. This is why it is viewed in Spain as anecdotical and would not make it to the headlines, unless of course victims grouped and acted promptly because a slack response is, in my opinion, no response at all.

Antonio Flores Litigation bella fortuna, Bella Nevazo, cazadores reales, finca cazadores, fortuna est 2000, fortuna estates, fortuna land, fortuna land investment, fuentespino, fuentespino one, miramontaña alta, miramontaña vista, Nevazo Invest, oanna, oanna group, oanna spain, sierra fortuna

The companies DICO Obras y Construcciones, DHO Infraestructuras and Obrum, three of the Aifos numerous creditors, have requested before Málaga’s Mercantile Court number one a forced administration procedure as result of the funds they are owed, in total more than €540,000 €.

This is the second time creditors request Aifos administration. The first time (http://www NULL.marbella-lawyers NULL.com/wordpress/aifos-faces-a-forced-administration-procedure/) was last November, but the Mercantile judge turned down (http://www NULL.marbella-lawyers NULL.com/wordpress/aifos-creditor-petition-for-administration-procedure-turned-down/) the creditors petition of a forced administration procedure because they had been unable to prove Aifos’ alleged delicate financial situation.

In Spain, companies undergoing a dire financial situation can either initiate voluntarily an administration procedure or else one of their creditors may force it. The latter has been the case. In such procedures, the creditors who force them benefit from a privilege to recover 25% of their debt in the event of a successful procedure.

Aifos owes 850 million Euro (718 million GBP). It’s largest creditors are Banco Popular with 200 million Euros, followed by Banco Pastor with 33 million Euros. Another 96 companies form part of the creditors list to which Aifos has been owing funds for the last 2 years.

Aifos has currently employed 2,000 workers.

Source: Cotizalia (http://www NULL.cotizalia NULL.com/cache/2009/01/12/noticias_83_proveedores_solicitan_concurso_acreedores_inmobiliaria NULL.html)

(http://www NULL.cotizalia NULL.com/cache/2009/01/12/noticias_83_proveedores_solicitan_concurso_acreedores_inmobiliaria NULL.html)

raymundo Litigation AIFOS, aifos administration, aifos bankrupt, aifos bankruptcy, aifos insolvency, aifos problems, aifos promociones, aifos promociones inmobiliarias

El Economista reports today (http://www NULL.eleconomista NULL.es/flash/noticias/918012/12/08/El-Juzgado-rechaza-el-concurso-de-Aifos-solicitado-por-uno-de-sus-acreedores- NULL.html) that Gestión de Obras y Reformas S.L., the creditor which initiated before Malaga’s Mercantile judge a petition for a forced administration procedure on developer Aifos has been turned down by the judge.

As we were trying to explain during the past days (forum thread (http://www NULL.marbella-lawyers NULL.com/forums/showthread NULL.php?t=96), blog post (http://www NULL.marbella-lawyers NULL.com/wordpress/aifos-faces-a-forced-administration-procedure/) and newsletter) this forced administration procedure did not mean that Aifos had filed for bankruptcy as it was mistakenly being reported at large.

The judge’s ruling on the creditor’s petition puts an end to this forced administration procedure.

What consequence does the above have? None. As stated, Aifos will continue trading as normal building and selling properties. The announcement of the forced administration procedure did not mean that Aifos had stopped trading and that it will now resume it. Aifos at no time had stopped trading all along this process.

Those who were buying properties will continue to do so and those who were litigating will also continue as well. Nothing has changed. This of course doesn’t rule out the possibility that some other creditor may in the future choose to follow the same path…

lawbird Litigation AIFOS, aifos administration, aifos bankrupt, aifos bankruptcy, aifos insolvency, aifos problems, aifos promociones, aifos promociones inmobiliarias

Spanish Police have uncovered (http://www NULL.elpais NULL.com/articulo/economia/Timo/gigante/Costa/Sol/elpepueco/20081205elpepueco_2/Tes) what appears to be the latest Costa del Sol scam, this time connected to the old land banking investment practice. And I say that it (only) appears to be a scam because Fortuna Land and their associate companies could well have the opportunity to defend themselves successfully if, on the basis of the contracts signed, no promise or guarantee of a certain or fixed return was made.

And if the above is confirmed any skilled lawyer could turn, on behalf of the perpetrators, a scam into a civil dispute, well away from criminal courts. In my opinion this whole fiasco could be construed as a scam and therefore prosecuted via Criminal Courts if the following requisites can be proved, beyond reasonable doubt, by the Prosecutor and victims:

1. That the developer promised the reclassification of the land from rural to a classification necessary for the commercial purpose it was destined for.
2. That the developer new that the reclassification was either very difficult to achieve or simply impossible, and he did not even attempt to change it.
3. That the developer provided false or manipulated valuations (this action per se is enough to prosecute for fraud).

My gut feeling tells me that this is all fraudulent (their website is worrying) but as a lawyer I would loathe to be predisposed to a certain opinion just by reading the press and internet comments (http://www NULL.fool NULL.co NULL.uk/news/investing/company-comment/2006/09/08/spam-scams-to-avoid NULL.aspx) and not looking carefully at the documents signed by the parties, the advertising used for selling and the sales “pitch” used by their telemarketers, which is key to decide on launching criminal or civil proceedings.

What I can guarantee, with 100% certainty (and my professional reputation goes with it!) is that cold callers offering a debt recovery service (http://www NULL.marbella-lawyers NULL.com/forums/showthread NULL.php?t=77) are real conmen trying to seize this opportunity to extract an extra amount of cash from the already vulnerable investors. Whether they are of African origin (Nigerian 419 scam) or former timeshare scammers, putting the phone down after a brief conversation indicating you are not interest should suffice.

I have so far only seen a copy of the deeds of sale of shares of the company owning the land signed at the Notary in Fuengirola, which is insufficient to decide on what actions to take, so any input (documents, advertising material, copy of valuations etc) is welcome to file a case against the developer, in the person of the directors/administrators of the company(ies) involved.

Antonio Flores Litigation cazadores reales, finca cazadores, fortuna est 2000, fortuna estates, fortuna land, fortuna land investment, fuentespino, fuentespino one, oanna, oanna group, oanna spain