Claiming Off Plan Property Refunds
On 21st December 2016 the Spanish Supreme Court established that banks are responsible for the reimbursement of money paid by off plan property buyers when the compulsory bank guarantees have not been issued.
The Supreme Court has said that buyers who have received a bank guarantee or an insurance policy to cover payments made for the purchase of their property, or those who never received these because neither the bank or developer handed them over, can recover the invested monies. In order to recover these monies, legal proceedings maybe necessary against the bank where the payments were made. Buyers could also be entitled to claim interest on the amounts paid over.
The ruling is in line with Law 57/1968 where it is mandatory for developers, banks and insurance companies to issue guarantees for off plan purchases. Failure to comply with these obligations cannot affect the buyer. The regulation requires banks and financial institutions to guarantee all amounts received.
Article 1 of the Law states that:
The bank that receives payments in advance in the developer´s special account, must ensure the provision of the corresponding bank guarantee due to it being its own responsibility.
If you purchased an off plan property and paid the deposit and or made other payments to the developer, contact us for a free consulation to find out if you are entitled to a refund.