Do you own an illegal property in Spain? We have the solution!

Spain houses under construction

During the Spanish property boom years, British buyers were foremost in the purchase of an off-plan property.

In fact, more than a hundred thousand British buyers purchased off-plan between 2000-2008. 

When the crisis struck at the end of 2007, several developers went out of business before completion of their project, leaving tens of thousands of buyers without a property, and losing their deposit and stage payments. 

These payments were allegedly insured, but when it came to claiming back lost money, they found that there was no insurance and supposed bank guarantees didn’t exist. 

In 2016, a landmark Supreme Court ruling established that law 57/68 can be applied to cases where a developer hid the illegal status of the development to the buyer. 

The same Law that helped people whose houses were not finished, was then, applied by the Supreme Court, to illegal properties, even completed ones.

The action has still not been too used for illegal properties but possibilities are clear. 

After the Supreme Court decision, anyone living in an illegal property with no prospect of legalization and/or recouping the value paid for it, should be looking into this possibility.

If this has happened to you, we can help you claim your money back, in part or full refund, depending on your circumstances.

What if I completed on the property and live there?

Although you completed on an illegal property and are living there, you still have rights to claim a refund of the off-plan advanced payments, and if you meet the requirements, the mortgage repayments. 

What about my mortgage repayments since I completed? Can I also claim them back?

You may be able to claim your mortgage repayments IF you subrogated the developer’s mortgage i.e. if the property and mortgage were sold to you in the same package.

Are interests of those amounts included?

Yes, recent Supreme Court decisions in Spain make it undebatable that legal interests are to be paid on mortgage repayments made to the developer’s accounts and bank.

Do I need a judicial claim?

Some banks are starting to settle out of court. But as a general rule, the answer is that you will probably have to start a judicial claim.

How long does it take to win a claim?

A valid claim takes between 6 months and 3 years months from start to finish i.e. from first meeting to discuss your case, to winning the claim and having your money refunded.

How can I start a judicial claim?

Contact us for a free appraisal of your case, which we will study and come back to you with our recommendations and information on how we can help you.

To start a claim you should have the following documents to hand:

  1. The signed contract between yourself and the developer
  2. Title deeds (Escritura) or Nota Simple of the property if you have one
  3. Proof of the payments you made for the purchase into a Spanish bank account. If you paid the money to your lawyer, rather than directly to the developer, we will help you get proof that monies paid were transferred to the developer.
  4. Property and development plans, and any other sales literature that you were given at the time of the purchase.
  5. If you have previously made a claim which was unsuccessful, we will need to see all of the paperwork before we take on your case. 

If you don’t have all the documents, don’t worry. We can help and proceedings can be started without some of them. 

Is there a time limit for these actions? 

Not if the property is illegal.

There is a time limit if claiming off-plan deposits and did not complete. If the breach happened after October 2015, you have 5 years to make a claim – October 2020.


We’re here to help!

We were the first to take banks to court and win. To make them accountable.

Contact us today to schedule a free, no obligations chat.


María Luisa de Castro

DIRECTOR

María founded CostaLuz Lawyers in 2006 and is the Firm’s Director. María is registered Lawyer number 2745 of the Cadiz Bar Association and is licensed to practice in all areas of law throughout Spain. Working closely with her team, María has developed the firm into one of the most highly regarded and trusted Spanish Law Firms acting for English speaking clients with legal problems in Spain.

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