San Jose Inversiones Left Out of Bank Guarantee Fight

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.


8 thoughts on “San Jose Inversiones Left Out of Bank Guarantee Fight

  1. Charles McIntyre

    First of all congraulations. We are in exactly the same position as your client. Is it possible to answer me this question. Now that they have won in the Appeal Court (2nd Court) does this mean this makes it case law or does it have to go to the Supreme Court for this to be achieved Much obliged.

  2. antonio Post author

    Thank you. By application of article 477 of the Civil Proceedings Act (as ammended by reform of the 11/10/2011, below), access to the Supreme Court is barred for cases that do not exceed €600,000, except where it is specifically established that they are of particular appeal interest, which does not seem the case as current case law/precedent is pretty consistent on this subject matter. (page 106739)

  3. Charlies McIntyre

    Thank you for getting back so quickly to my question, it was most appreciative and informative though not being a legal person it would seem to me that this could constitute case law.
    Another point I would like to ask you about is the second paragraph was the point about SGR saying they were capping their liabilities of 6.5million euros I notice on the second court ruling they said this was not acceptable does this mean that if their liabilities go over 6.5million euros as could be the case will they have to pay out over this amount to claimants.

  4. antonio Post author

    This is correct, according to case law, any agreement between the developer and the underwriting bank in detriment to the consumer buyer is not opposable in respect to the latter, as it falls outside the scope of the mandatory provisions of the law.

  5. Gerald Peck

    I have already won a case [in 2008] against San Jose for the return of my deposit[awarded 74000 euros.]which is still being pursued by my solicitor If the bank guarantor eventually pays out,what will be the status of my claim against San Jose.Will both the bank and San Jose have to pay or only upto the original 48000 plus interest?

  6. antonio Post author

    Gerald, out of the sum you were awarded (€74,000), the bank will be liable for payment of the principal and interest (the figure you quote seems pretty high). If they choose not to pay and you sue them, and they lose, legal cost will also be normally awarded against the bank.

  7. Paul Byrne


    Just inquiring what lawyer was used in the case. As i am in a similiar position and would like to recoup my deposit.

  8. antonio Post author

    Dear Paul,

    The lawyer that dealt with this matter is Luis Gonzalez Ordoñez, and you can contact him on, or by phone on +34 952 86 18 90.

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