According to a law dating back to 1986 that regulates payments during the construction period of a new-build or off-plan property in Spain, the purchase can only be cancelled by the buyer if the property isn’t handed over according to the conditions and completion date as outlined in the contract. And if on completion, some outstanding work or minor details still remain to be finished; this wouldn’t warrant cancellation of the contract either.
The “Alto Tribunal”, the highest court in Spain, has now changed its posture, in wishing to clarify the criteria by which some of the lower or regional courts have been trying such cases, to the point that a group of purchasers recently won their case where they had taken the developers to court for handing over the properties three months later than stipulated in the contract. Despite the late completion, although only three months, the court considered this to be a breach of contract by the vendor, but only because the purchaser had reported this prior to finally signing the ‘escritura’ (title deeds) before a notary, which to the contrary, would in effect have implied acceptance of the purchase.
The case, involving the developer “Urbanizadora Inmobiliaria S.A.” and “La Caixa” bank, which insured the project, has resulted in damages to be awarded to the buyers to the tune of 65,000€ and 52,000€, respectively. The purchasers, who refused to sign the ‘escritura’ after losing their case at a local court, subsequently appealed to the Provincial Court in Madrid, where they had their original verdict overturned, obliging the developer and bank to pay the agreed amounts of compensation.
Robert Edwards – LPG SPAIN Blog.