If you have purchased an off-plan property in Spain before the 1st of January of 2016, this might be your last chance to claim back your deposit and other amounts paid on not delivered Real Estate developments.
Deadline for claiming back off-plan property deposits
The 7th of October of 2020 will be the 5th anniversary since the entry into force of the Spanish Law number 42/2015 of the 5th of October that reformed the Spanish Civil Procedure Law.
This is bad news for all off-plan property buyers though – this law has reduced the deadline for claiming their deposits back from 15 years to 5 years.
If you have purchased an off-plan property from either a cooperative or a promoter before the 1st of January of 2016 which resulted in unbuilt or unfinished, the time is ticking away for you to claim back your deposit. Most legal professionals will advise you to submit your claim before the “official deadline”, which will be on the 7th of October of 2020.
Nonetheless, due to the pandemic, this deadline will get extended 82 days by the Royal Decree number 463/2020 of the 14th of March of 2020 (Real Decreto 463/2020, de 14 de marzo), so instead of the 7th of October of 2020, any individual who bought an off-plan property before the 1st of January of 2016 can submit a claim before the 28th of December of this year.
Despite this extension of time, do not leave it too late and reach out to our lawyers as soon as possible to analyze your particular case.
The individuals who have made deposits for purchasing an off-plan property in Spain are eligible to claim, regardless of whether the property was intended to be their main residency.
These individuals can take the banks to court regardless of whether they have already claimed the Real Estate developers that went bankrupt, as long as the money has never been recovered.
However, the claim must be submitted within 5 years after the agreed property delivery date, as per the Spanish Law number 42/2015. Therefore, all individuals that purchased off-plan properties in Spain before the 1st of January of 2016 should submit a claim before the aforementioned deadline.
If you are wondering if you are still on time to submit a claim, feel free to reach out to us.
The amounts to be recovered
Apart from the full amount of the deposit placed for the off-plan property purchase, you will be entitled to the legal interest of such deposited amount.
Sometimes you will also be able to claim the litigation expenses.
Average time of trials
The Courts in Spain are collapsed and it usually takes between 12 and 15 months from the filing of the claim until a ruling is received on the matter.
This estimation might be affected by the COVID pandemic and we expect that such cases could take up to 18 months to be resolved by a Spanish Court.
Success rates of off-plan property deposits claims
We strongly recommend a professional consultation for your off-plan property purchase as there is a 98% success rate in these claims.
The Spanish case law that supports off-plan property deposits claims is robust.
The landmark case law from the Spanish Supreme Court is the ruling numbered 540/2013 of the 13th of September of 2013 states that it is a requirement for Banks and Savings Banks to obtain from the property developers an insurance or a bank guarantee, as required by the Spanish Law 57/1968, of July 27. If they fail to do so, the Bank or the Saving Bank become liable subsidiarily, which translates into them becoming liable for the amounts advanced by buyers of off-plan properties in Spain that never got built or finished.
The Spanish Supreme Court’s ruling number 733/2015, of the 21st of December of 2015 has a similar opinion, stating that in the sale of properties in which Law 57/1968 of the 27th of July is applicable, the banks that accept deposits placed by buyers into a Real Estate developer’s account without requesting the opening of a special account and the corresponding guarantee, they will be liable to the buyers for the full amounts anticipated by them which has been deposited into the account or accounts of the Real Estate developer in such bank.
If you feel this might be your case, feel free to contact us in order to assess the viability of your claim regarding your unsuccessful off-plan property purchase.
Del Canto Chambers has been advising buyers of off-plan properties in Spain for several years: