Favourable Ruling Obtained on Appeal of a Counter-Claim Won by Santa Maria Green Hills Developer

March 26th, 2010

This is a very interesting Court ruling (and expensive to the developer!) where our client-claimant, who attempted to cancel her contract on a property at Santa Maria Green Hills, was counter-sued by the developer who requested from the Courts that specific performance of the contract was enforced (basically forcing her to complete) and, as it happened, lost her case and was forced to complete. In this case, Courts also awarded costs on the losing party so we had a tough telephone call to make…

Fortunately, though, she trusted our advice and we went for appeal and, as we were predicting (due to similar cases being judged on the matter), the more mature Appeal Court in Malaga overturned the case and awarded cost on the developer.

In this case, our very patient Irish client had approached us seeking contractual rescission on 2 main grounds:

  1. Contractual default as the property had been finished late and
  2. Unenforceability of the License of Occupancy, which in this case was understood by the developer to have been granted by administrative silence (this being a statutory mechanism designed to prevent administrative inefficiency and misfeasance and in the developers opinion, applied even in the case of properties with build licenses issued against regional planning regulations).

The Court of First Instance had determined that the License of Occupancy, based on administrative silence, was fully valid and also there had been no significant delay that would merit a contract cancellation ruling and therefore issued a sentence forcing our clients to complete on the unit. The Court of Appeal in Malaga (Audiencia Provincial), following similar recently passed rulings, dictated that it was not possible to consider the License of Occupancy issued by administrative silence as valid for it was clear that it was issued against planning regulations since the master urban plan or Marbella was never formally approved, adding that it was not the legal duty of the Civil Courts to determine the validity of this license but an Administrative Court.

As a result of the Court, our client saved the cost of the first instance (which happened to be monstrous due to the accumulation of 2 simultaneous cases in one) and was entitled to execute the ruling to get her deposit back, which amounted to over €120,000.

2 thoughts on “Favourable Ruling Obtained on Appeal of a Counter-Claim Won by Santa Maria Green Hills Developer

  1. Graham Miller

    I would be interested to know if your client received her deposit back from the developers yet.
    I am in the same situation, having won my appeal but not having any real hope of seeing my deposit and costs being returned by the developers.

  2. antonio

    Hello Graham, apologies for the delay in answering, your post has gone unnoticed due to technical reasons. Our client has not yet received the deposit so other than screening bank accounts owned by the developer you will have to get a restraining order (embargo) enough equity, whether on one or more properties to ensure that when the developer wishes to sell he pays you. If the judge allows you to register your charge against 3 properties then, if your deposit is of say 100k Euros, you can get 30k every time a property is sold.

    This will not stop the bank from foreclosing is the mortgages are not paid but it can stop them from selling them to some else, even to the bank, in exchange for the loan to be cancelled.

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