Recent LEY 57/1968 Off-Plan Property Supreme Court Sentences won by CostaLuz Lawyers

I. The first was a Trampolin Case against Sabadell in development Trampolin Royal Dream by Solera El Trampolin SL on May 24th 2019, a Supreme Court Sentence dated 21st of May which states liability of Banco Sabadell as depositer bank (receiver of off plan amounts) as it did not ensure those amounts were correctly insured/guaranteed.

This Supreme Court Sentence also states that there is no need for the payments to be made in a “special account” and affirms according to important Sentence dated  23 November, 2017:

"The fundamental reason for this Supreme Court Case law is that credit institutions receivers of amounts coming from off plan private home buyers
do not have the character of third parties unrelated to the relationship between buyer and developer, but must actively collaborate with the latter in order to ensure that
fulfills its legal obligations (to receive the advanced amounts in a special account duly guaranteed). 

Consequently, it is enough for the credit institution to know or not to ignore (who "knew or had to know", said literally said sentence of November 2017)
that the buyers were entering amounts on account of the price of homes under construction to answer for not having demanded from the promoter the opening of a special account,
separated and duly guaranteed. Not understand it like that and exonerate the responsibility of the credit institution in cases where the amounts are received
 "in a single account of the promoter, intended for multiple attentions "would deprive buyers of the protection that it shields the "energetic and imperative" system of Law 57/1968 »

II. The most recent Sentence is dated 5th June 2019, by the Supreme Court

Regarding time barring of actions when the claim is against an Insurer, as there was some contradictory Sentences among different Appeal Courts.  In this Sentence the Supreme Court has stated:

In the process of setting a uniform criterion on the time barring  period for actions against insurance companies under the regime of Law 57/1968, this room (en banc)
considers that this is the general time barring period of art. 1964 Civil Code (for the present case, fifteen years).

The fundamental reason is that the art. 1-1.a of said law provides as alternative guarantees for the repayment of the amounts advanced both an insurance contract and a bank guarantee,
and would be no legally acceptable that the the term of limitation of the action of the buyers should be different - and considerably shorter - in the case of insurance than in the case of
bank guarantee, since both forms of guarantee must be contracted imperatively by the seller for the exclusive benefit of the buyers and the art. 7 of the Law 57/1968 establishes that the rights of this Law have
"irrevocable character".

This recent Supreme Court Sentence also states that the developer meets its contract not just by obtaining the First Occupation Licence but mainly with the effective hand over of the property to buyers, so despite the existence of a FOL if this was illegally granted, the buyer can exercise its rights.

Our First Supreme Court won case back in March 2016 established Case Law for the interest period to start at the moment amounts are paid into the developers account and is being nationally used by Courts to grant interests to buyers since date of payments into the developer’s bank account.

Maria Luisa Castro

Director and Founder
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. We’re here to help. Contact us today for a free, no-obligation, initial legal orientation.
María Luisa De Castro - Costaluz Lawyers

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