Developer Peñarroya Sentenced to refund One million euros for Eleven Dwellings at La Reserva de Marbella

April 28th, 2008
Story by José Carlos Villanueva | El Mundo

El Mundo Newspaper – 27-4-2008 (Original in PDF) 

In the sentence ruled last 22nd of April to which newspaper El Mundo has access to, the judge Mrs Dolores Ruiz Jiménez revoked the eleven Private Purchase Contracts that the plaintiffs signed with the developer between the 4th of July and the 19th of December 2003.All of the plaintiffs who will now be refunded are of British and Irish citizenship. They are nine couples which signed jointly and two other persons that signed individually. The developer gave them a deadline to complete on the eleven properties without the mandatory Licence of First Occupancy required under Spanish law.

The down payments made by the eleven plaintiffs range from 66.581ˆ up to 90.319ˆ. To said amounts one must add the accrued legal interests which range from 8.300ˆ up to 12.478ˆ. The developer’s legal representative may appeal against the ruling of the judge. However, legal sources have confirmed the plaintiffs will execute provisionally the ruling so that they may start to obtain their refunds which they had made as down payment on the eleven properties.

The problems stem back in 2006 when the purchasers were sent by the developer a registered communication by means of a Notary public to complete on the properties on a given date. They would have to pay the balance which amounted to 70% of the value of the properties. Some purchasers warned the developer that he was in breach of contract as the properties were not being delivered on time as per the terms set forth in their Private Purchase Contracts. The developer was meant to hand over the properties in May 2005. Other purchasers decided not to appear before the appointed notary on said completion date due to the breaches of contract La Reserva de Marbella had incurred in.

In February 2006 the developer requested from Marbella town hall to be granted the Licence of First Occupancy. Three months after, in May of that same year, La Reserva de Marbella developer thought he had obtained said LFO by means of an administrative legal figure known as “Administrative Silence”. In June 2006 the developer notified the purchasers giving them a deadline to complete before a Spanish notary public.

Before filing the law suit, the affected parties contacted the developer through their chosen Marbella law firm, Lawbird Legal Services, by means of a burofax to clarify the legal status of said development with the warning that they would revoke their contracts if it wasn’t clarified. This registered communication went unanswered by the developer. This forced the purchaser’s lawyer to cancel their contracts because their dwellings lacked the mandatory

Licence of First Occupation

Moreover, a town hall resolution existed issued by the “Comisión Gestora” in which it stated that the LFO had not been granted by “Administrative Silence” to developer Peñarroya for La Reserva de Marbella. The 29th of May 2006 a local legal report had already included La Reserva de Marbella’s Building Licence as one of many which were undergoing an administrative process that was reviewing it, being one of many Building Licences that were revoked by the Junta de Andalucía.

The ruling delivers justice

At the Marbella law firm, Lawbird Legal Services, which acted on behalf of the eleven plaintiffs in a class action law suit against La Reserva de Marbella, the ruling was received with satisfaction. The ruling pends a possible appeal by the developer’s lawyer to the Audiencia Provincial which would make it definitive.

Lawbird’s lawyers have undertaken the weight of the legal procedure under the supervision of the head lawyer Mr Luis Fernando González Ordóñez. The purchasers contacted both solicitors tangled in the legal predicament they were in as a result of Marbella’s  general urbanistic chaos due to the lack of legal planning security.

At another Málaga court, earlier on this month, Lawbird won another ruling against La Reserva de Marbella which affects only one purchaser. She will obtain a full refund of €85,000 which she paid over to developer Peñarroya at La Reserva de Marbella. Until now the developer in this case has not paid any funds over to this plaintiff. Three La Reserva de Marbella properties which had been legally frozen by her lawyer to secure her stage payments will now beexecuted by him to obtain the refund.

“This ruling is yet not firm pending a possible appeal, yet it is a professional satisfaction for our law firm but above all it delivers satisfaction to our clients, all of them British and Irish”, was declared by Lawbird’s solicitors “at long last Spanish Justice acknowledges they were right all along. It is not admissible, as the developer strived to do, to deliver a property without the mandatory legal and urbanistic requirements for a first occupancy”.

In many of these cases for the plaintiffs they were their life’s savings or their largest family financial commitment. For this reason to those affected “it is a great satisfaction to verify that it is worthwhile filing a law suit before a Spanish Court of Justice, even bearing in mind the associated fees, expenses and time it requires, taking into consideration you are a foreigner”.

Lawbird upholds that “the Costa del Sol cannot be left at the mercy of a handful of very powerful developers, as has been the case in Marbella, undermining the good image of Spain abroad, specially in the United Kingdom and Ireland, whose citizens have traditionally been attracted by the lifestyle in our coasts”.

This Marbella law firm is specialized in defending those affected by real estate and planning problems.

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