Author Archives: antonio

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.


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 (, 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.

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.

May 5th, 2012

The ruling seemed a logical consequence of a blatant contractual default.

Hercesa Inmobiliaria S.A. has lost a case brought against clients of this firm that intended to force them to complete the purchase of an off-plan property on a property development that was just that, a property development.

Never mind that Hercesa failed to build promised additional facilities, as noted on expensive promotional literature: 3 Golf Courses (2 of which were 18-hole facilities), football grounds, Club House, horse riding premises, restaurants and, if you were still skeptical, a luxury (could it be otherwise?) 6-star hotel boasting business center, spa, gym equipped with
hydrotherapy and several pools.

The Court deemed the intervention of the gone estate agency Andalucian Dream Homes ex-sales rep “crucial”, who swore that selling these units with those brochures was a “piece of cake”.

The Judge addtionally states that, on reviewing a photographic report invoked by the defendants’ counsel (we), the development is far from being in perfect conditions, as a consequence of which article 8 of the Consumers and Users Protection Act is fully applicable.

May 5th, 2012

Court of First Instance number 12 of Malaga has ruled that the discussion on whether a licence of occupancy (licencia de primera ocupación) obtained by administrative silence is valid or not, should not affect bona fide consumers (any consumer unless otherwise proven).

In recent ruling, the Judge has argued that a consumer that buys off-plan property should not be dragged into, and suffer, complex legal debates between a developer, La Reserva de Marbella, and an administrative body, the Marbella Town Hall, as well as the Andalusian Regional Government. The ruling also states that:

  • La Reserva de Marbella is still not fully compliant with the policies of the Marbella Development Plan (PGOU), and has serious infrastructure deficiencies.
  • Both regional (RD 515/1989) and national (LOE 38/1999) laws stipulate that a consumer is entitled to receive a fully legal licence of occupancy, free from litigation.
  • It is not possible to invoke administrative silence, by the mere passing of time, where it demonstrably contravenes planning laws and regulations. The Judge presses on by arguing that administrative silence is to be upheld only if it does not go against both national or EU laws, noting that Spanish laws specify that administrative silence cannot be used to validate situations of illegality.
  • 4 years and 10 months from when the property should have been delivered, la Reserva is still unable to offer an unconditional licence of occupancy.
  • Completion date needs to be interpreted as a fixed date, and not a mere approximation.
  • An unproved strike somewhere down the construction process is not a valid excuse for a 4-year delay in getting a valid licence of occupancy and thus, being able to complete.

Conversely, the Malaga Administrative Courts have ruled on the admissibility of some of these licences and that La Reserva is entitled to them as these were granted pursuant to applicable laws.

The question that remains is: will these Judges ever get together for a pint or two and straighten out -legal- disagreements?

February 15th, 2012

We did not foresee the Appeal Court in Alicante overturning a judgement that left little room for interpretation.

As expected, the Court of First Instance ruling forcing the all-purpose entity SGR- Sociedad de Garantía Recíproca de la Comunidad Valenciana (it comes across as a lender/insurer/guarantor, depending on who you ask) to refund fully a property purchaser of the failed Herrada del Tollo development, promoted by the developer Herrada del Tollo S.L., affiliate of the San José Inversiones Group, was ratified with ease.

 And so, what are the most practical conclusions that can be derived from the premises set forth by the initial ruling that has been confirmed by the Appeal Court in Alicante?

  • That a guarantee can be paid outside the receivership proceedings, whether by a bank, insurer or an all-purpose lender, such as SGR, and thus prior acceptance by the administrators is no prerequisite or prior condition for payment.
  • That the collective guarantee cannot be capped, nor needs to be individualized, nor requires the off-plan property buyer signing any document to avail of its protection.
  • That timescales are, contrary to popular belief, pretty acceptable (The civil lawsuit was lodged with the Court of First Instance in June 2010 and the Appeal Court ruled in February 2012).
  • That SGR’s obstinacy will cost them dearly: judicial interest on the €60k deposit (since 2007, at an average of 4.5% per annum) and legal costs (€8,000 approximately).
  • That SGR, who also guaranteed other developments of the Santa Ana Group, such as El Pinet, will presumably no longer be able to oppose payment on the above grounds.

Meanwhile, we have read that San José Inversiones has managed to emerge from the receivership proceedings and will resume its activities on projects that stalled as a result of the above process.


February 12th, 2012

A recent Court judicial pronouncement by Court of First Instance 17 in Malaga tightens the noose on La Reserva de Marbella. Although the reading of the ruling can be tedious, save for if you are the claimant , the acting lawyers (us) or an avid reader of boring Court rulings, it is remarkable in that when typing up his conclusions the Judge, Mr. Antonio Valero González, has managed to extend the length of one sentence, with no full-stops, to…5 full pages (please help me find one (PDF))!!  The findings of the Court can be summed up as follows:

  • Older case law where a party was to be found deliberately obstructing fulfillment is now replaced by a less severe breach of contract: the standard now in off-plan property construction is one where the breach frustrates the legitimate aspirations of the buyers, preventing them from reaching the economical aims pursued.
  • La Reserva de Marbella S.A. obtained the license of occupancy on the 1st of June 2010, and on the 28th of October 2011 the Administrative Court 2 in Malaga ratified the right of the developer to retain the license, a ruling that is not firm. Mr. Valero points to the irrelevance of this item, given that termination was instigated well before.
  • High litigation activity on this development has meant that La Reserva de Marbella S.A. has created case law of its own, in the Malaga Courts. The judging magistrate concludes that an almost identical court case ruled on the 14.10.10 already deals with the issues surrounding the delay: lack of proper or legitimate planning compliance. Quoting the cited ruling, the magistrate delivers a fatal blow: it is clear that the defendant and seller is obliged to deliver a property in an able condition, to be used and lived in, being obliged to adapt the construction to current planning regulations to the extent that, if this is not in place, the property is not susceptible of being occupied and in fact, could even be demolished.
  • The sale of a property without an occupancy license represents a serious breach of contract, and property buyers are notforced to sustain the vicissitudes of an administrative nature i.e. build license, that was only achieved 5 years after completion was agreed to.
  • Counsel for La Reserva de Marbella S.A. argued, not without reason, that obtaning the license of occupancy was not instrumental in attaining full legal compliance, an allegation based on two Supreme Court rulings of the 10 of October of 1987 and 1989. Luckily, Magistrates at this very High Court in Madrid also get replaced and antiquated viewpoints also get replaced by more modern opinion (Supreme Court 24th of May 1991, 16th of March 1995, 28th of May 1996 and 23rd of October 1997).

Now straight on to the tricky stage of enforcing the ruling!

February 8th, 2012

Hundreds of property buyers seem to be stuck in complex and impenetrable CAVs (Company Voluntary Arrangements) affecting Promociones Eurohouse S.L., Ochando S.A. and San Jose Inversiones y Proyectos Urbanisticos, SA.

Strangely, only a minority of purchasers ever had the luck of putting their hands on a bank guarantee that would have ensured, almost certainly, a quick refund. Much discussion has been had sorrounding their mere existence but not less importantly, other points of law. There is a disparity of opinion relating to the above subject on occasion of the possible legal representation of a potentially large number of property buyers that may have had access to a valid one but did not, and whether this was because the developer refused to ask for it from the bank, or it was granted but expired, or a general one was in place but individual ones were never issued.

The case law below has covered some of these legal uncertainties in the following rulings:

Court of First Instance case against SGR, Lawbird acting as claimants.

 “The fact that the developer did not deliver an individual bank guarantee to a property purchaser cannot leave this person outside the guarantee contracted since the rights stemming from the 57/1968 Act are unwaiverable.” The lack an individual bank guarantee could affect, at the most, to the type of proceedings to be filed but not the right of the buyer to enforce the guarantee.” (executive as opposed to ordinary proceedings).


Provincial Audience of Alicante (SAP Alicante 331/2010).

 “The allegation that the down payments were not paid into the special account does not prevent a buyer from claiming on a bank guarantee. The same applies to a supposed limitation on the extent of a guarantee alluded to by the bank: it is an allegation immune to the privileged position of the consumer”. 


Provincial Audience of Teruel (SAP Teruel 2/2010).

“It has evidenced that the buyer paid, on account of 2 off-plan properties, the sum of €61,000. The guarantee to refund this payment to future property purchasers, with interest, granted as a general purpose loan by the defendant, must cover the full amount without possible exoneration of this obligation on grounds that part of them were not paid into the bank for, in conclusion, this is a matter that belongs to the scope of the relationship between the developer and the bank and not opposable to a buyer that complied with his obligations, fully.”


Provincial Audience of Cantabria (SAP 758/2009)

The date of expiration of the bank guarantee cannot be the one fixed between the developer and the bank without the consumer’s intervention, but the one envisaged by law, given the mandatory nature of the 1968 Act which, according to article 4, is the date of the license of occupancy issued by the Town Hall. In the particular case, the defendants invoked a date different from that enshrined in the Consumer Protection 1968 Act, cannot be upheld as it manifestly infringes law of mandatory application.”  “The individual bank guarantee stipulated that €16k would be covered. The contract, on the contrary, states that the sum of €31k was to be paid and proof of payment is duly documented. The relationship between Caja Cantabria and the buyers does not derive from the bank guarantee, but from the law. The law requires Caja Cantabria to guarantee all amounts paid through the special account, of which use the savings bank has to be especially vigilant, so that all sums are paid through this account and also, that they are used for the purpose of the construction, solely, without being misused. When the bank guarantee does not cover all sums paid, the deal is contrary to law. Caja Cantabria should have known the business conducted by the developer and demand a precise report of each one of the buyers and the sums paid by them, in such a way that when providing the bank guarantee it did not carry out the job in contravention to the laws. 


Provincial Audience in Burgos. (SAP Burgos 349/2011 rec. 69/2011).

The delivery of the individual bank guarantee by Caja de Ahorros de Burgos was subject to the developer handing over copies of private purchase contracts, and payment of the deposits in the special account opened to that effect. This obviously was not fulfilled by the developer. Consumers however should not be burdened with additional obligations in respect to those pertaining to the policy holder (developer) and obligations pertaining to the guarantor (bank), to the extent that failure by the bank to deliver an individual bank guarantee to the purchaser/consumer cannot be invoked as an impediment to demand responsibility from the bank.


It is important to remember that the 1968 Act is imbued with special protective functions, in respect of the rights and interests of the buyers of property that pay all or part of the purchase price, upfront, and as such the precepts therein included need to be interpreted in the most favourable way to consumers, who cannot be damaged by non-fulfilments or failure to observe obligations and mandates that banks, insurers and developers are under and in whose hands is, specifically, the obligation to comply with the cited norm. 

January 11th, 2012
Story by PETER Nyholm of JULIE Hornbek TOFT | Finans Watch

Nykredit played a key role in Sydbank tax-feint, and has also helped Jyske Bank’s customers at the Suncoast to borrow against their home equity. Minister of Taxation is now entering the case.

Several Danish banks as Sydbank been able to help foreign customers to optimize their succession through tax havens.

It would ceteris paribus good could be done to save a fortune that would otherwise appear as equity in their property, for example. Spain, via Jyske Bank, explains Jens Lauritzen, CEO of Jyske Bank’s foreign operations:

“We have also financed up to 100 per cent. Of a property value in some inherited cases. But it is not a product we have advised on – we have instead referred to the client’s lawyer or accountant. It is not a product that is good for all customers, and it’s only a few who are clients in Switzerland, where we have no duty to inform. ”

Nordea does not reject

Jens Lauritzen says that Jyske Bank’s customers must sign that they will report their assets to the IRS. But does the customer home in the bank’s branch in Switzerland, the bank can not be sure that the customer actually does it.

“If this is so that customers are not telling the truth or cheat us, so it may seem that the authorities do not get the right information. But we have not actively sold these products,” says Jens Lauritzen.

In Nordea, which is taking over a part of Sydbank Swiss customers will not deny that one has been able to do something similar.

“Nordea does not comment on competitors’ practices. But generally, that Nordea advises clients under the rules that apply – it also includes the tax in the countries in which we operate,” says the press department.

Home equity on the Suncoast

As revealed in the newspaper Jyllands-Posten yesterday, Nykredit has provided mortgage loans to finance Sydbank tax feint in Spain, according to an internal mail to Sydbank CEO of Karen Frøsig primarily have been intended to reduce inheritance tax.

Now, says Nykredit that you have mortgaged home equity on the coast for more partners than Aabenraa Bank, including Jyske Bank. And you can not deny that money ended up in tax havens, explains Hanne Egaa, area director for International Lending.

“Customers are predisposing themselves to the money they get paid. We provide loans, but where the money is transferred to the mix, we are not in. But we report all our mortgages to the Danish tax authorities,” says Hanne Egaa.

Taxation in action

Now also Tax Möger Thor Pedersen (SF) into the proceedings:

“It is clear that my awareness increased if a large bank is proposing a maneuver in which the tax is due on the loan must be placed in a tax haven country with no accountability. If it is a widespread traffic in the financial sector, it is certainly something we will look more closely. ”

Sydbank commented yesterday Jyllands-Posten’s unveiling. The message was that you do not have violated tax laws, but advised to optimize clients’ wealth by borrowing against equity in their properties and invest the proceeds.

Original Article in Danish below.

Flere banker arbejder i skattely


Offentliggjort 11.01.12 kl. 06:45

Nykredit spillede en hovedrolle i Sydbanks skattely-finte og har også hjulpet Jyske Bank-kunder på Solkysten med at belåne deres friværdier. Skatteministeren går nu ind i sagen.

Flere danske banker har som Sydbank kunnet hjælpe udenlandske kunder med at optimere deres arveforhold via skattely.

Det ville alt andet lige godt kunne lade sig gøre at gemme en formue væk, der ellers ville fremstå som friværdi i ejendom i f.eks. Spanien, via Jyske Bank, forklarer Jens Lauritzen, direktør for Jyske Banks udenlandske aktiviteter:

“Vi har også finansieret op til 100 pct. af en ejendoms værdi i nogle arvesager. Men det er ikke et produkt, vi selv har rådgivet om – vi har i stedet henvist til kundens advokat eller revisor. Det er ikke et produkt, som er godt for alle kunder, og det er kun et fåtal, som er kunder i Schweiz, hvor vi ikke har indberetningspligt.”

Nordea afviser ikke

Jens Lauritzen oplyser, at Jyske Banks kunder skal skrive under på, at de vil indberette deres formueforhold til skattemyndighederne. Men hører kunden hjemme i bankens afdeling i Schweiz, kan banken ikke være sikker på, at kunden rent faktisk gør det.

“Hvis det er sådan, at kunderne ikke fortæller sandheden eller snyder os, så kan det forekomme, at myndighederne ikke får de rigtige informationer. Men vi har ikke aktivt solgt sådanne produkter,” siger Jens Lauritzen.

I Nordea, der er ved at overtage en del af Sydbanks Schweiz’ kunder, vil man ikke afvise, at man har kunnet gøre noget lignende.

“Nordea kommenterer ikke konkurrenters praksis. Men generelt gælder det, at Nordea rådgiver kunder i henhold til de regler, der gælder – det omfatter også skattereglerne i de lande, som vi opererer i,” lyder det fra presseafdelingen.

Friværdier på Solkysten

Som afsløret i Morgenavisen Jyllands-Posten i går har Nykredit leveret realkreditlån til finansiering af Sydbanks skattefinte i Spanien, som ifølge en intern mail til Sydbank-topdirektør Karen Frøsig først og fremmest har haft til formål at reducere arveafgift.

Nu oplyser Nykredit, at man har belånt friværdier på Solkysten for flere samarbejdspartnere end Aabenraa-banken, herunder Jyske Bank. Og man kan ikke afvise, at pengene er endt i skattely, forklarer Hanne Egaa, områdedirektør for Nykredit International.

“Kunderne disponerer selv over de penge, de får udbetalt. Vi yder lån, men hvor pengene bliver overført til, blander vi os ikke i. Men vi indberetter alle vores realkreditlån til de danske skattemyndigheder,” siger Hanne Egaa.

Skatteminister i aktion

Nu går også skatteminister Thor Möger Pedersen (SF) ind i sagen:

“Det er klart, at min opmærksomhed skærpes, hvis en stor bank foreslår en manøvre, hvor skattelettelsen beror på, at lånet skal placeres i et skattelyland uden oplysningspligt. Hvis det er en udbredt trafik i finanssektoren, er det bestemt noget, vi vil se nærmere på.”

Sydbank kommenterede i går Jyllands-Postens afsløring. Meldingen var, at man ikke har overtrådt skattelovgivningen, men rådgivet i at optimere kundernes formueforhold ved at belåne friværdi i ejendomme og investere provenuet.




October 30th, 2011

To our former clients it has come as a bit of a surprise that the Courts in Cordoba have all, invariably, ruled against them: the reason for their surprise? That they were told they had a strong case by a Fuengirola-based lawyer.

The developer for Altos de Alcaucin had finalized the construction on time and seemingly in accordance to the plans given to the buyers, and was hoping they would make arrangements to complete. Buyers on the contraty wanted to pull out as their hearts were no longer in this part of Spain. They sought legal advice from us and we said there was no case to be had. They then went to a see a lawyer that had the opposite opinion…

The contract in question stipulated that that in the event of the buyers failing to pay any of the instalments, as agreed to in the contract, they developer would be entitled to rescind the contract and return 80% of the sums received up to date, keeping 20% in concept of penalty. When our clients, due to the adverse economic climate, chose to invoke this stipulation to pull out, notwithstanding the developer’s complete fullfilment of their obligations, we advised that it was not in the essence or nature of such convention the right to pull out in case of convenience, but rather the developer’s prerrogative to do so, should he chose to.

Unfortunately for our clients they were herded away by the very unnatural legal thesis that this was a Get Out Clause and could enforce it. Far from it, 2 different Courts held that:

  • That the prerrogative to rescind the contract is only available to whoever meets their contractual obligations, and not to who defaults and invokes its own default.
  • That the penalty clause is a legal tool that serves one of two purposes: to coerce the party to the contract to fullfil the obligation he has entered into and to fix, in advance, the sum of damages caused by reason of default. According to the Court, the bursting housing bubble has prevented that such clause is used for one of the above two purposes and paved the way for it to be used incorrectly and unfairly: as a get out clause for buyers for whom the purchase is no longer a profitable venture.
  • That, having the Courts the right to modify the penalty clause by either reducing (when excessive) or increasing it (when notably small compared to the default in question), in the light of the circumstances, it is clear that the 20% penalty clause is clearly insufficient to cover the losses incurred by the buyer when defaulting, as it does not cover the real estate commission paid to the intermediary, bank interest and the loss of value sustained by the property (the Judge puts it at 15%, according to the Ministry of Housing).

Luckily for them the developer counter-sued to retain the full deposit, and not to force the buyers to fullfil the contract. Unluckily, there are costs incurred in that the developer could chase them for.