Legal deadline looms for off-plan property victims

Time running out for court clawback

PEOPLE who lost a dream home in the sun and the money they paid into failed off-plan property developments have a last chance to take court action in a bid to win cash back.

A legal deadline is scheduled to bite later this year on legislation that opened the way for losers to claim the money back from the banks that accepted their deposit and staged investments.

In the Spanish property boom of the new millennium the construction of urbanisation projects sprang up across the country and especially in coastal hotspots but many failed to be completed; either because companies went bust or were halted because of a lack of planning permission.

There was a surge in the offplan market with buyers enticed to invest in new developments. Action groups later described it as “a feeding frenzy”.

However, as losers began to consult lawyers, legal minds returned to a similar construction boom in the sixties and brushed off a Spanish law, Ley 57/1968.

This applied to finance houses - banks and building societies - receiving payments for the construction and purchase of the properties; requiring them to guarantee the return of deposits plus interest should the development fail.

And the banks also had a duty to ensure the deposits were actually spent by the constructors on the development after some builders went bankrupt in the financial crisis, it was discovered funds had been misappropriated to buy such things as high-end cars.

Now pressure group AUAN Abusos Urbanisticos Andalucia No! - a part of a national federation launched by Marina Alta based AUN; has warned time is running out and a statute of limitation falls in October this year.

DEADLINE

Gerardo Vázquez, spokesperson for AUAN, in 2015 the limitation period was changed from 15 years to five and falls on October 7 - although there could be an extension because of the state of emergency.

He said when the boom started “money flowed like water” until a time when work was frozen because of a lack of planning permission or promoters being left without finance in the crisis.

Gerardo added: “As a result of this our nation is littered with the skeletons of urbanisations, wherein lie many broken dreams and a lot of anguish. People invested their savings in a house that would never be built and where the promoter eventually went bankrupt.”

However, he said lawyers “dusted off” the bank guarantee law “from the Franco era” and claims “began to rain down on the banks” - and a series of judgements from the Supreme Court backed the victims.

Gerardo said at present losers able to prove they deposited funds with a finance house - even if not issued a formal guarantee - should think of making a claim; lawyers often offering a ‘no win, no fee’ deal.

He said that was the good news - the flip side was the limitation and the fast-approaching October deadline.

“It is advisable for those who invested in these failed urbanisations to take advice from a specialist lawyer,” said Gerardo.

“There is little to lose and a lot to gain; and there are lawyers who are willing to undertake these claims on terms that are very favourable for the claimant. Get some advice - before the door closes forever.”