A recent Court judicial pronouncement by Court of First Instance 17 in Malaga tightens the noose on La Reserva de Marbella. Although the reading of the ruling can be tedious, save for if you are the claimant , the acting lawyers (us) or an avid reader of boring Court rulings, it is remarkable in that when typing up his conclusions the Judge, Mr. Antonio Valero González, has managed to extend the length of one sentence, with no full-stops, to…5 full pages (please help me find one (PDF))!! The findings of the Court can be summed up as follows:
- Older case law where a party was to be found deliberately obstructing fulfillment is now replaced by a less severe breach of contract: the standard now in off-plan property construction is one where the breach frustrates the legitimate aspirations of the buyers, preventing them from reaching the economical aims pursued.
- La Reserva de Marbella S.A. obtained the license of occupancy on the 1st of June 2010, and on the 28th of October 2011 the Administrative Court 2 in Malaga ratified the right of the developer to retain the license, a ruling that is not firm. Mr. Valero points to the irrelevance of this item, given that termination was instigated well before.
- High litigation activity on this development has meant that La Reserva de Marbella S.A. has created case law of its own, in the Malaga Courts. The judging magistrate concludes that an almost identical court case ruled on the 14.10.10 already deals with the issues surrounding the delay: lack of proper or legitimate planning compliance. Quoting the cited ruling, the magistrate delivers a fatal blow: it is clear that the defendant and seller is obliged to deliver a property in an able condition, to be used and lived in, being obliged to adapt the construction to current planning regulations to the extent that, if this is not in place, the property is not susceptible of being occupied and in fact, could even be demolished.
- The sale of a property without an occupancy license represents a serious breach of contract, and property buyers are notforced to sustain the vicissitudes of an administrative nature i.e. build license, that was only achieved 5 years after completion was agreed to.
- Counsel for La Reserva de Marbella S.A. argued, not without reason, that obtaning the license of occupancy was not instrumental in attaining full legal compliance, an allegation based on two Supreme Court rulings of the 10 of October of 1987 and 1989. Luckily, Magistrates at this very High Court in Madrid also get replaced and antiquated viewpoints also get replaced by more modern opinion (Supreme Court 24th of May 1991, 16th of March 1995, 28th of May 1996 and 23rd of October 1997).
Now straight on to the tricky stage of enforcing the ruling!
Lawbird Legal Services has obtained a favourable Court ruling in a Group Legal Action in a first ruling against property developer La Reserva de Marbella S.A., on the 15th March 2010, acting on behalf of a group of British clients.
Our clients had purchased off-plan property from La Reserva de Marbella S.A. for a number of units at the 400-unit development called La Reserva de Marbella, Elviria, Marbella East (Málaga), and invoked contractual rescission on mainly 2 grounds:
- The property did not have a valid license of habitation (or first occupation)
- The properties had been delivered late.
The defendants lawyer (a former Attorney General’s office solicitor) put up a very qualified defence based on the following:
- That the claimants were investors and not end-user buyers.
- That lawyers were retained to ensure that the legalities were complied with when contracts were signed.
- That since the administrative Court case filed by the Andalusian Government expired, further invoking that as a result the license had been approved by “administrative silence”, the aforementioned license was fully valid.
- That the properties had been delivered on time as the 7 month delay was fully attributable to strikes.
Our solicitors successfully challenged each of the lines of defence put up by the defendants’ lawyers, and obtained a favourable ruling based on the following legal grounds:
- That the license of occupancy had not been granted at the time of cancellation of the contract, and if fact it is still not been granted, even though the judges stresses the fact that it is not for him to decide if the license if valid or not but the administrative Courts, which have exclusive jurisdiction over this matter.
- That although the properties had been finished only few months after the designated time, these properties were not able to be legally transferred until the license of occupancy was validly granted, which was not the case as the Town Hall in Marbella had rejected it.
- That as a result of the lack of licence, the properties could not be delivered with the necessary conditions of habitability, security and salubrity, which is a mandatory pre-requisite to handing over a finished property.
Having accepted our claim in full, the judge ordered the defendant to:
- Refund the principal amount, this being the deposits paid on account of the price.
- Pay legal interest since the time the deposits were paid and not when the contracts were cancelled, increased in 2 points from the time of issuing of the ruling.
- Pay the legal costs (which effectively means that our clients would have the legal fees reimbursed).
It is important to note that, in this particular case, our clients were requested to attend the Court hearing on petition of the defendants, which we could not refuse, and therefore they had to fly to Spain for this matter. They were duly cross-examined by the defendant’s lawyer by means of a qualified translator. Unfortunately for the defendants, we had a two-hour meeting with our clients where we went through the probable questions La Reserva de Marbella legal defence team would throw at them and prepared the answers carefully.
Following the case recently won by Lawbird lawyers on behalf of a British client against developer Peñarroya, another ruling with positive outcome involving the the same developer has been received in our offices. It is a second and final ruling at Málaga’s High Appeal Court, which has been passed on the 15th October 2009.
Our client had purchased in 2003 an off plan property from developer Peñarroya at well-known development La Reserva de Marbella, Elviria, Marbella East, Málaga Province. The developer had breached the Private Purchase Contract because of late delivery in handing over the property and not having attained from Marbella’s Town Hall what is known as a Licence of First Occupation.
Our client withdrew from the Private Purchase Contract and litigated for a full refund of her deposit. She won the First ruling on the 26th February 2008. This First ruling was appealed by the developer’s lawyers. She has now won a Second and Final ruling on her matter which overturns the developer’s appeal. The High Court has confirmed in its entirety the First ruling whereby she was entitled to a full refund of her deposits (over 80,000€) plus legal interests accrued since early 2005. The High Court has additionally awarded her the legal fees and expenses arising from this appeal which will be paid for by the defendant, developer Peñarroya .
Lawbird lawyers have won a First ruling against developer Peñarroya on the 13th October 2009 acting on behalf of a British couple.
The clients had purchased an off plan property from developer Peñarroya at well-known development La Reserva de Marbella, Elviria, Marbella East, Málaga Province. The developer had breached the Private Purchase Contract because of late delivery in handing over the property and lacking the mandatory Licence of First Occupation.
Our clients withdrew and litigated for a refund with a favourable outcome. The clients were however countersued by Peñarroya for non-completion. This ruling overturns the developer’s lawsuit in favour of our clients and confirms the prior ruling in our client’s favour. The court sentenced the plaintiff, developer Peñarroya , to refund in full to our clients the legal costs arisen from this counter lawsuit.
Lawbird Legal Services has obtained another successful final ruling litigating on behalf of 20 British and Irish clients in a class action law suit against renowned Marbella developer Peñarroya.
All clients had purchased off-plan units on the well-known development La Reserva de Marbella in Elviria, Marbella East. Málaga’s First Court number one in its ruling of 2008 had sentenced Peñarroya to refund its 20 clients their full deposits. Peñarroya appealed through their lawyers this first ruling which then went on to be heard at Málaga’s High Appeal Court.
The Appeal Court has now confirmed the first ruling sentencing Peñarroya to pay for the full legal fees of the plaintiffs plus the accrued legal interests on their deposits besides of course refunding their deposits in full.
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