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British owners in Spain can reclaim their lost money on off plan properties

British owners in Spain can reclaim their lost money on off plan properties

British owners in Spain can reclaim their lost money on off plan properties

After recent legal changes in Spain, buyers have the right to get back their property’s deposits on certain circumstances.

The Spanish housing bubble was one of the most important 2008’s international crisis in this country. Thousands of citizens lost their properties or saw their prices crashing which has  affected thousands of British owners.

The housing market suffered from this crisis, not only buyers but estate agents, investors and lawyers. One of the bubble’s effects was that clients lost their deposits put down for paying their holiday or retirement homes in Spain. But also those who had their off-plan property almost built but works just ceased, those having a new-build property and, finally, those who unwittingly paid for an illegally constructed home.

For years it seemed that all of them had been cut off by legislators having no one to blame or to claim for their money back. Until the Supreme Court of Justice of the Madrid Community ruled that Spanish banks are liable for that vanished money deposited in their accounts plus the interest on arrears.

This is clearly a hope message for those Britons who lost their deposits. In fact, Spanish legal sector calculates that the total amount to be claimed for return could range between 20.000 to 70.000 pounds (23.000-82.000 euros).

After this ruling, banks could then be forced to give that money back to buyers; which is a significant legal change, bearing in mind that buyers were previously placed at the bottom of the list of creditors. But also banks could be liable for these deposits’ losses; change that goes in favour of new-build and off-plan buyers.

As claims must be issued case by case, it means many litigations for due compensations that could affect up to 100.000 British people. Those affectees could even organise themselves into groups or associations to claim jointly.

Besides, during the Spanish housing boom, clients paid for homes to be built in coastal areas, especially in the Andalusian Costa del Sol, that turned to be illegal after environmental rules’ changings and for that reason properties had to be demolished without any redress.

Once there was no bubble anymore, aiming to avoid this, the Spanish Senate ruled that buyers should be given compensations when their property had been demolished in the case of proved good faith when purchasing.

This was a modification of the Spanish Criminal Code introduced by adding a new paragraph to its Article 319 by virtue of the Organic Law 1/2015 of 30th March. Thus, the Andalusian regional government (Junta de Andalucía) estimated that around 300.000 illegal properties could be found only in this region.

Knowing that, what buyers should bear in mind in order to avoid legal problems:

  • Getting an independent validation of the property.
  • Confirming any required permissions, licences or consents.
  • Having a proof being registered as the property’s official owner.
  • Reassurance that their English version of their property contract is true and valid.
  • Engaging an expert spanish lawyer

It cannot be denied that former Spanish housing bubble eroded citizens’ rights both nationals and foreigners when dealing with property purchasing and mortgage’s duties. The recent ruling reversed this situation, giving the chance, for both nationals and expats citizens, of getting back not only their money but their fair rights.

At Del Canto Chambers we are specialised in claims on property issues against courts and tax authorities. We can be contacted at

Del Canto Chambers’ Editorial Board


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