The judge in Cantabria ruled that the bank, Caja Cantabria, had failed in its duty and ordered it to give the client a full refund of both deposit and staged payments.
Now ReclaimYourDeposit.com, a firm that helps beleaguered property owners get their money back from dodgy deals said it has set a standard for future cases.
‘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,’ said Daren Wallbank, director of ReclaimYourDeposit.
‘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. It gives us added confidence going forward as we work on behalf of our out of pocket clients,’ he added.
The case involved a bank 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.
But the judge disregarded this ‘small print’ and reminded Caja Cantabria of Spanish Property Law 57/1968 which states; ‘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 judge also decided that guarantees could not expire whilst the purchaser still had no home to show for their monies.
‘Sadly Spanish Law is not based on precedent in the same way as English Law, but undoubtedly other courts in Spain will take this verdict into account when faced with similar cases of which there are many,’ said Wallbank.
‘It also leaves a question mark over the numerous buyers who have discovered that their bank guarantees were never issued as it is 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,’ he added.
ReclaimYourDeposit has recently launched a ‘No Win No Fee’ service unique to Spain. Providing clients can conform to three simple criteria; have in their possession the original private purchase contracts, have proof of payments and finally a contract that has expired without the property reaching completion, the company will take on their case and try to recover a disastrous situation.
