Buyers of illegal apartment recover money paid upfront to bankrupt developer

The area where the apartments had been built. JOSELE-LANZA
The area where the apartments had been built. JOSELE-LANZA / JOSELE-LANZA
  • A sentence orders Banco Popular to pay two British couples the sums they paid in 2004 to Marbella Vista Golf that later went into administration

A Marbella court has ordered Banco Popular to pay two British couples the sums they paid upfront for an apartment built on a development that turned out to be illegal.

The claimants paid a total of 103,000 euros in 2004 as the deposits on an apartment that should have been finished and handed over with its first occupancy licence two years later. When the developer, Marbella Vista Golf, went into administration the buyers claimed their money from the bank. A judge has now ruled in their favour and ordered the bank to pay back the deposits plus interest as well as paying court costs.

The buyers had previously obtained a sentence in their favour when the developer was ordered to pay back the deposits, however this was never received as the firm had gone into administration. The buyers' next step was to claim the money from the bank.

More sentences

This is not the first sentence affecting buyers of properties in Marbella Vista Golf; so far the courts have found in favour of the buyers in 20 cases.

In all of these the claimants have been represented by the Ley57 law firm.

In this most recent case, after the developer failed to hand over the keys to the property before the deadline stated in the contract, the buyers took Marbella Vista Golf to court for breach of contract.

The council had refused to provide the properties with a first occupancy licence, as it considered the original planning permission, granted during the GIL era, to be illegitimate as it failed to comply with the urban plan in force at the time. These cases against the developer, however, had different outcomes due to different criteria used by different courts.

In June 2013 the Spanish Supreme court standardised the rulings in favour of the buyers, but by that time the developer had gone into administration and been declared insolvent.

The buyers then sued the Banco Popular, where the developer had the account into which they had paid their deposits.

In this case the judge overruled arguments by the bank that the buyers had no right to claim, stating that as the developer had not insured the amounts paid in, it was up to the bank to demand guarantees to protect the amounts at the time.