Spanish Court Rule Banks Liable For Property Deposits

  • 13 years ago
  • Uncategorized

A Spanish judge has deemed a bank responsible for protecting a client’s funds, the ruling see Caja Cantabria, as having failed in its duty and ordered them to issue a full refund of both deposit and stage payments to a Spanish property buyer

Daren Wallbank, Director of ReclaimYourDeposit.com, comments, “Although bank guarantees were seen as the ultimate in security by Spanish property investors, we’ve uncovered many cases where the guarantee has been promised but not delivered and everyone from the bank to the lawyer, notary to the developer has seen fit to relieve themselves of responsibility for the failure. This landmark ruling shows that the Spanish legal system is prepared to apportion blame and will not allow property scams to be brushed under the carpet.

In Cantabria, the case referred to a client who had paid a deposit on a property that was subsequently never built. The bank initially tried to brush off the allegations saying that the bank guarantee had expired and therefore they could not be taken to task. The judge disregarded this ‘small print’ and reminded Caja Cantabria of Spanish Property Law 57/1968 which asks “to protect the funds paid by the buyer into a special account and ensure they are used solely for the purpose of building the property”. The court further argued that guarantees could not expire whilst the purchaser still had no home to show for their monies.

Daren continues, “Sadly Spanish Law is not based on precedent in the same way as English Law, but undoubtedly other courts in Spain will take the verdict into account when faced with similar cases – of which there are many. It also leaves a question mark over the numerous expats who have discovered that their bank guarantees were never issued – it’s still unclear who would be responsible then. Nonetheless it does send out a clear message that the Spanish legal system is slowly coming to terms with the terrible treatment of international property purchasers and provides more than a glimmer of hope to those seeking recompense for non-completed property in Spain.

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