Ocean View Properties: Manilva Costa S.A. and Cajasol Jointly Liable

July 25th, 2013

Cajasol has been ordered to pay €180,000, plus costs and legal interest, to 2 claimants who had bought 2 properties in Jardines de Manilva (Gardens of Manilva) some years back, through Ocean View Properties.

In spite of the properties being finished, it was established by the Courts that the unattained licenses of occupancy on the completed projected were a fundamental breach of contract that hampered the legitimate aspirations of property purchasers, following undisputed case law on the matter.

With regards to Cajasol, who was found jointly liable to repay the deposits as they had offered a collective bank guarantee to protect advance deposits (no individual bank guarantees had been issued) the Judge dismissed the allegation that the collective bank guarantee was capped at €2,500,000 and that it had already been fully used up to repay other claimants.

Quoting the Judge in charge of Court number 3 in Estepona, article 1 of the 57/1968 Act on Guarantees on Off-Plan Property Deposits states that the bank is responsible of ensuring, under its own responsibility, compliance with the conditions of the guarantee as well as the above cited Act for which reason, it is not acceptable that the bank now tries to excuse its obligation by invoking a quantum limitation established on the collective bank guarantee to now pay. 

Cajasol should be paying out the sums ordered by the Court within the next 3 weeks.

As usual with cases dealt with by Lawbird Legal Services, a copy of the ruling is available for review.

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Huma Mediterraneo and Promociones Inroal

May 6th, 2013

Within a space of time of less than 2 weeks, Huma Mediterraneo S.L. and Promociones Inroal S.L. have filed for voluntary insolvency (CVA) due to the adverse current economic climate.

Huma Mediterraneo’s flagship development, “Cuevas de Almanzora”, was never built in spite of which approximately 400 buyers paid their deposits.

Promociones Inroal S.L. has taken money from a large group of investors and equally, has left them stranded, “Azahar Villas” and “Los Olivos” being some of the unfinished developments.

Customers who had bought off-plan property from them and have not received their properties, or money, are now requested by the Courts to register their rights with administrators.

Experience tells us that whilst registering the credit (paid deposit) is convenient, adhering to a future creditors proposal would be counterproductive to the investor’s interests for legal technicality: banks will use this to stop payment under a “Bank Guarantee Action”  arguing that they are bound by the investor’s adhesion to the agreement in respect of delayed and reduced debt repayment terms.

The advice we can provide is that investors study the options offered by different firms against bank(s) that should have guaranteed the deposits, in the first, or the lawyers whom, in spite of their statutory obligations, failed to obtain a bank guarantee to secure the investment.


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Judge Investigating Punta Perla/Estepona Beach and Country Club Scams Finally Removed

April 29th, 2013

Justice Mr. Jose Emilio Coronado Ruz, in charge of investigating the criminal claim against Ricardo Miranda Miret and Ocean View Properties former directors -all indicted for missapropriation and swindle- has been himself removed from the post following a recusal petition filed by firm Lawbird.

The reason why Justice Coronado Ruz was forced to leave the investigation by the Madrid Appeal Court was the implication of his brother, Ignacio Miranda Miret, in the sale of the land on which Punta Perla was to be built (via sale of shares of the company Paraiso Tropical).

Lawbird exposed the Judge after noticing that at least €100,000 worth of deposits paid by bona fide customers ended up in the pockets of the brother. The payment had seemingly gone unnoticed to the Judge as was, shockingly, the younger brother’s involvement in a high-profile case that could have not gone past him without knowledge of some degree of participation, a claim that The Honourable responded to by stating that for “reasons that he will not disclose, he has not been in touch with his brother since 1998 and hence, could have not known”.

What are the odds of a case lodged with the Madrid Courts of First Instance- 101 in operation- ending up in one whose boss happens to be the brother of a party implicated in receiving money? Well, 1 in 101. But then, what are the odds of that Judge not knowing that his brother could have been implicated in such case, and furthermore, the odds of both brothers not talking to each other for the best part of 15 years? 


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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.


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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.

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Los Lagos de Santa Maria Dragged Through the Courts

January 23rd, 2013

The title is perhaps not entirely correct as the developer was not part of the ruling, but a reseller that answers to the name of Bancales Inversiones S.L., a company that had bought to resell a particular unit at Los Lagos de Santa María.

On a recent Court decision, the Appeal Court reversed (again) an earlier ruling by the Marbella Court of First Instance 5 who had found this company not responsible for delivering a property that was granted occupancy rights by means of a license that ran against local planning ordinances.

Roberto Leiro Bascones, acting for the claimants, convinced the Appeal Court that having a finished property with adequate supplies is not enough to “effectively transfer ownership” where the license of occupancy was not granted, or was granted via that fiction, or loophole, called “administrative silence” when, as is the case here, violated planning regulations.

As a result, the Malaga Appeal Courts ordered Bancales Inversiones to reimburse over 60k Euros to the claimants.

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“Express” Spanish Limited Company (S.R.L.): Drawbacks and Improvements

December 30th, 2012

Following the enactment of the Royal Decree 13/2010, almost anyone setting up a new company in Spain has opted for the fast track Spanish “Express” Limited Company. The reason? It takes no more than 24h to have a fully functioning limited company (up to 3 days where the company’s share capital exceeds €3,100 but is less than €30,000).

Interestingly, the number of newly incorporated companies has increased 18% compared to last year, being October 2012 a record month in the last 5 years. This is not only thanks to the economic crisis pushing unemployed individuals to take up the self-employed option after the little chances to find employment but also to the reduction in the timing and registration expenses. Additional benefits include the standard limited liability,  to many the most strong incentive to start a business securely.

Lets revisit what the specific limitations are in respect of this expedited company incorporation format:

  • The share capital is limited to €3,100.
  • Founder members have to be individuals; this leaves out companies, whether national or offshore.
  • The Directorship configuration is limited to one of three: a sole administrator, 2 joint administrators or more than one joint and several administrators.
  • Compliance of the statutes of such company with the new regulations in place.

The listed limitations make sense: the Mercantile Registry will not carry out due diligence on national founding companies nor the authenticity and legitimacy of an overseas company in such a brief period of time, even if the Notary already does this; yes, the drawbacks of a legality control double-filter system imposed in Spain.

One important recommendation for a non-Spanish shareholders and/or director is to have an NIE number, registered at the Tax office if possible, prior to attending the Notary Public meeting (in fact, this is a compulsory requirement nowadays for any public document). That, or else the process will be delayed by10 days approximately.

Have you had any problems when incorporating this type of company? Do you need help in setting up one?

Patricia Martín Benítez 

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Sephardic Jews to attain Spanish Citizenship Automatically

November 24th, 2012

Yet another important political reform, this time affecting the Spanish Civil Code.

Ministers of Justice and Foreign Affairs, Alberto Ruiz Gallardón and José Manuel García – Margallo, announced yesterday that descendants of the Sephardic community, who were expelled from the Iberian Peninsula back in 1492, will now be able to acquire Spanish citizenship automatically, without having to reside in Spain. This is an important modification of the Spanish Civil code, which since its last modification in 1982, stated a requirement of a minimum of 2 years of residence in Spain for acquiring Spanish citizenship.

This reform will affect those who are able to prove their Sephardic condition, whether it is via surnames, language, descendants or links to Spanish culture and Spanish customs regardless of their place of residence. For this purpose a certificate of the Jewish Community Federations will be required.

According to Gallardón, a few years ago it was understood that around 250,000 people spoke Judeo-Spanish but this estimation could be too conservative. It is thought that this reform could benefit up to 3 million people.

Marta Flores Vila.


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Peinsa 97 S.L. and Calas del Pinar: young Judge moves away from mainstream in respect of interest calculation

June 14th, 2012

This is an interesting ruling for it only relates to interest, and not the principal, since the latter item was no longer in dispute.

However, unlike the prior ruling that was mentioned in this section (http://www.lawbird.com/wordpress/tag/residencial-calas-del-pinar/), the Judge deemed that interest was to be paid from the very time the deposit check was paid to the developer, and not when legal action was formally instigated.

The legal ground invoked here is that interest is deemed to be of a “compensatory or remunerative” nature, and not one of mere delay in performing an obligation, since one party (Peinsa 97 s.L.) was in total breach. He also added that monies paid some years back had less value than now and thus, it was fully justified for the buyer to be entitled to interest since day 1.

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Bristol County Court applied Council Regulation (EC) No 44/2001 correctly, say Seville Magistrates

May 27th, 2012

The Court of Appeal in Seville has upheld a Court of First Instance ruling allowing enforcement of a ruling by a UK Court, obtained by claimants who successfully sued Manilva Costa (MC), and Ocean View Properties (OVP), at the Bristol County Court.

MC´s lawyers opposed the enforcement of the Bristol County Court ruling, pursuant to COUNCIL REGULATION (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, on the following grounds:

  • That the UK had no jurisdiction as the case versed on a dispute relating to Spanish property and
  • That property developer MC had not been properly served, as a co-defendant alongside now defunct Ocean View Properties.

The claimants petition was upheld by 3 Seville Magistrates who found that, since OVP was domiciled in the UK, a co-defendant (MC) could also be sued in this jurisdiction.

With regards to the inappropriate service of process, the Magistrates argued that because His Honour Judge Denyer QC had certified that the notifications were done observing the formalities of English laws, they could not argue against this.

The enforcement of the UK ruling is now well under way, through the Seville Courts. Equity on the embargoed properties still remain the biggest concern, though.

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