Spanish Property Trap - Is the Door about to Close for British Investors Trying to Reclaim Lost Deposits from Failed Developments?

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Spanish property law experts Alonso & Haro Solicitors in Manchester say that despite a recent precedent set in the Spanish Supreme Court bringing new hope to out-of-pocket British speculators by allowing them to claim back deposits they thought were lost, the legal goalposts look set to move yet again in the new year.

Lawyer Carlos Meoro, whose Spanish firm partners with Alonso & Haro, represented a couple from (town), who invested off–plan in a failed Spanish property development in Jumilla in 2005. The case, which went to court last month, set a new legal precedent and the couple fully recovered their deposits totaling euros 50,000, Mr. Meoro explains:

“Prior to this ruling, buyers who had backed the voluntary suspension of payments and had signed an agreement with the builder were not able to recover their money through the bank guarantees. This ruling backs the right of off-plan property buyers whose money was transferred into a builder's specified bank account, to have all their deposits refunded - regardless of whether they had a bank guarantee or not.
At the Jumilla development alone around 1,500 investors, mostly British, could now recover all their deposits.”

However, Mr Meoro warned that this might be a short-lived window of opportunity for claimants, as he believes the situation may change yet again in January 2016. He continues:

"The judges have ruled that this right should be guaranteed through law 57/68 instead of through the Spanish Civil Code and they have changed the interpretation of the law to benefit consumers. However, law 57/68 will be replaced in January by law 20/15, which will limit the rights established this year by the court precedents. I anticipate that the new law will give more protection to the banks and insurance companies, at the cost of the consumer.”

Mr and Mrs Raynor who purchased a villa on the Almanzora Country Club development had almost given up on recovering their lost deposits after 10 years of waiting. Mrs Raynor told us “Like lots of other people, my husband and I assumed we had lost a large sum of money from our intended purchase, because it was not covered by a bank guarantee.”

Within a few months of instructing Alonso & Haro Solicitors S.L and Meoro Aviles Abogados to act on their behalf a substantial part of the funds were refunded back to their bank account, with the rest pending the result of a separate case.

Mrs Raynor continued. “The Alonso and Haro jointly with the Meoro Aviles Abogados team have been emailing and phoning my husband and I throughout the process and we are extremely grateful to them for acting on our behalf. They work in a very professional but personal and friendly manner and are very good in explaining the process.”

Pilar Alonso, managing director at Alonso & Haro Solicitors said.
“Clearly this ruling is great news for many people who believed there was no hope of recovering their deposits. Working with our offices in Spain we have continually put pressure on the Spanish banks to secure a string of victories in the Spanish Courts, much to the delight and relief of our clients here in the UK. However, we are concerned that the outlook may change in the new year and would urge people who find themselves in this situation to get in touch as soon as possible.”

British investors wanting to pursue a claim or to discuss any Spanish property issues should contact Pilar Alonso on 01204 328460 for an initial discussion or visit http://www.ah-solicitors.com

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Simon hetherington

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