Monthly Archives: February 2013

Zurich España Insurance Company to Share the Fate of Pinares de Mijas

February 17th, 2013

Zurich España Insurance Company, the company that insured deposits for off-plan property buyers, is to return these to 6 victorious owners.

Since it was undisputed that Zurich had agreed to cover the risk of contractual default, when the Appeal Court in Malaga found that Pinares de Mijas had not delivered the properties on time -contrary to the earlier ruling passed by the Courts of First Instance in Fuengirola-, the return of the deposits was ordered with inmediate effect.

2 points worth quoting from this run-of-the-mill ruling:

  • Legal interest is awarded from the date of lodging the claim, not since when the deposit was paid to the developer (as many other similar ruling have established).
  • The delay in delivering the promised properties was counted not from the date when the construction of the properties was physically concluded, but from when they could be legally lived in, establishing that the meaning of “completion” has to necessarily coincide with the grant of the license of occupancy by the local authority (Mijas Town Hall in this case).

Claimants can now shrug off fears that Zurich would do what Mary Beth Senkewicz, former senior executive at the National Association of Insurance Commisioners (US), once warned:

 the bottom line is that insurance companies make money when they don’t pay claims…they´ll do anything to avoid paying, because if they wait long enough, the know the policyholders will die.

 

Don Juan II developer and Caixa Galicia forced to pay

February 11th, 2013

Arrohabitatge and Caixa Galicia, the saving’s bank in charge of providing the bank guarantees, have been jointly and severally found guilty of contractual default and forced to return the deposit of a British claimant.

The developer, in a brazen display of arrogance, rescinded its agreement with the investor due to his unwillingness to close the transaction, on grounds that no license of occupancy had been granted on the development. When sued, the developer’s defense was based around the fact that the works had been halted by the Town Hall due to a dispute with owners of a neighbouring plot, the Spanish Railway Company (RENFE), a dispute totally beyond the control of the developer.

Roberto Leiro, for the claimants, successfully argued that force majeure, or superior force, could not be invoked because the Spanish Supreme Court has established that this ground to oppose fullfilment must be of a decisive, unforeseeable, insuperable and inevitable nature, due to its alienness, characteristics not appertaining to the delay suffered. And it was not because Arrohabitatge  S.L. is a construction company that could have not been unaware of this matter since, within the scope of their activity, a neighbouring dispute is a vicissitude that can be expected to happen and prevented where possible, or at the very least warned of its likely happening, and never transfer the consequences of it to the consumer.