Prienesur and Caixa Galicia forced to refund due to a 16-month delay

October 8th, 2010

Again, it is not one of the those spectacular cases that has been fought hard, but one where the Judge has upheld consistent Spanish Supreme Court jurisprudence in respect of delays in delivering property.

The Judge quotes case law that reminds that in the rescission of a contract, a default of an obligation incumbent on each one of the parties has to be serious, and it´s interpretation is a matter of fact.

According to the quoted ruling, the default needs to be of such importance in the economy of the contract that justifies the resolution in the common intention of the parties, not being enough a mere partial default of obligations, or one where such obligations are accessory or complementary to the main ones. It also then talks about the frustration of the legitimate expectations and aspirations of the party that applies for contractual resolution.

In connection to this, the Judge considers that delivery of the property is the main obligation of the developer, and that the license of occupancy is an essential element of the contract for it is not real estate what the developer is selling but a dwelling, a parking space and a storage room, where every day life is to be conducted. The lack of the license of occupancy is critical, and not because one cannot survive without it, but because it impedes the buyer from enjoying the services that society deems as necessary to be able to live with dignity, inasmuch as the lack of the license compromises water, electricity and similar services and supplies.

The Judge finally chooses not to delve into the reasons for the delay in granting the license of occupancy as, in spite of being outside the control of the developer, it is a predictable situation considering how Town Halls operate. He concludes by ruling out application of article 1105 of the Civil (Force Majeure/Acts of God).

As usual, a copy of the Court ruling is available upon request.

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