Corvera Group Case: Client Questions Answered 2

March 23rd, 2010

We are answering below a few interesting questions we have received in the past few days from people interested in joining the the Lawbird Corvera Golf and Country Club Group Case. Should you have further questions, feel free to put them forward.

I have been told I can be interrogated by the defendant’s lawyers during the hearing which means that I would have to fly to Spain. Another lawyer said that I can refuse to attend this since I am in a different country. Can you please advise?

If the defence lawyer requests that you attend the hearing to be interrogated you must certainly comply with this, because otherwise the Courts could determine that you are in agreement with all the questions raised in your absence! This means that you have to be prepared for this possibility although there will sufficient advance notice so that you can book your flights and accommodation, so don’t worry! We will in any case prepare you for this, and go through likely questions to be asked as well as the answers.

 


  

I believe that based on Article 1469, if the area of an off plan property is more than 10% less than the agreed area, you can request termination of the contract and the return of your deposit. This I have been led to believe is also true if the the value of the property is more than 10% less than it should be due the developer failing to fulfil his obligations, in our case the facilities. So the question is would we be able to terminate the contract and get our deposits returned if we can prove that the property was worth more than 10% less than it would be at the time we applied the Resolution of contract in June 09?, compared to what the property would have been worth if the facilities were in place. Or alternatively if the judge decides to compensate us by reducing the purchase price by 10% or more, in so doing he would be effectively stating that the value of the property is now worth more than 10% less as a result of the lack of promised facilities. Could we then ask him to terminate the contract and return the deposits due to this 10% rule?

The interesting point you raise is covered by article 1469 of the Spanish Civil Code (Spanish) according to which, if the sale of property was made on the basis of a price per unit of measure or number the seller will be obliged to give the buyer the full amount agreed on the contract. But if this was not possible the buyer will be entitled to opt for a proportional reduction of the agreed price or the contractual rescission provided that, in the latter case, the shortfall in size is not less than 10% of the size initially attributed to the property.

The first obstacle which I see to this is that rarely off-plan contracts are actually sold on the basis of price per square meter. This means that, in principle, this clause would not apply. However, selling the property “as seen”, that is, after having agreed to the product as a finished one is impossible because it is not built and therefore Consumer Protection Act rules could be invoked to make this sale subject to price per square meter, and effectively apply the clause.

In order for you be able to prepare a case on this basis, access to the properties will be necessary so as to measure the property up. If it is concluded that there is a shortfall of more than 10% of the agreed size, then it is possible to request a contractual rescission, but then again it would be necessary to prove that the sale was made per square meter (which the contract does not mention), by application of Consumer Protection Act provisions.

If the shortfall is less than 10%, then this can be the basis for reducing the price, but careful, because if what you want is to cancel the contract, then this has to be invoked as a secondary petition to the Courts after contract cancellation for lack of promised facilities.

Finally, with regards to the value of the property the law does not have specific provisions about this, although it can certainly be invoked, but has to be proved with at least two reports from registered real estate agents (we have requested reports for our claimants to this effect since it reinforces the issue of lack of facilities).

As a conclusion, if there is a suspicion that the properties are smaller than the promised size by more than 10% this can be invoked together with the lack of facilities, with the observations I have made above. Our firm is cautious in this respect because we don’t want to be seen as looking for every excuse possible to pull out, but for a fundamental and very crucial one, this being the non-built facilities.

 


 

We’ve paid €75,000 as deposits (30% of purchase price, incl. IVA ). Can you please provide me with a breakdwon of costs in the different possible scenarios?

Please find below clarification. On a €75,000 (incl. Vat) deposit, the breakdown of costs would be:

  1. Retainer: €3,500 VAT included (based on a group of 25 claimants)
  2. Lawbird maximum fee (10%): €7,500 VAT included. Balance is paid on recovery of funds (which in principle would include also interest and legal costs. Should legal costs be recovered, a full refund of the retainer would operate and we would be entitled to 10% of total amount obtained for you (liquid funds in bank account).
  3. Counter claim retainer: 65% of €3,500
  4. Appeal retainer: 50% of €3,500 (this retainer is regardless of whether we challenge a ruling or oppose an appeal lodged by the defendant.
  5. Insolvency: No further fees in this instance to join the creditors list.

 


  

What are the costs if you have 2 identical properties. I unfortunately have 2 properties, and I believe quite a number of other people on the forum also do.

We have finally decided to charge the same to claimants who have 2 properties and those who have 1 which means that there will only be one single fee for both cases (equal to claimants with 1 property/case). The reason for doing this is that we can consider both properties to be part of one claimant, within the group action. This however does not mean that it will occur the same if the case is lost as then the Murcia Bar Association Fee Guidelines apply.

For further information, please visit the Corvera Golf and Country Club Group Legal Action page.

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