Tag Archives: license of occupancy

Court tells La Reserva de Marbella that Consumers are Sacred and Shady Licenses of Occupancy are not Good Enough

May 5th, 2012

Court of First Instance number 12 of Malaga has ruled that the discussion on whether a licence of occupancy (licencia de primera ocupación) obtained by administrative silence is valid or not, should not affect bona fide consumers (any consumer unless otherwise proven).

In recent ruling, the Judge has argued that a consumer that buys off-plan property should not be dragged into, and suffer, complex legal debates between a developer, La Reserva de Marbella, and an administrative body, the Marbella Town Hall, as well as the Andalusian Regional Government. The ruling also states that:

  • La Reserva de Marbella is still not fully compliant with the policies of the Marbella Development Plan (PGOU), and has serious infrastructure deficiencies.
  • Both regional (RD 515/1989) and national (LOE 38/1999) laws stipulate that a consumer is entitled to receive a fully legal licence of occupancy, free from litigation.
  • It is not possible to invoke administrative silence, by the mere passing of time, where it demonstrably contravenes planning laws and regulations. The Judge presses on by arguing that administrative silence is to be upheld only if it does not go against both national or EU laws, noting that Spanish laws specify that administrative silence cannot be used to validate situations of illegality.
  • 4 years and 10 months from when the property should have been delivered, la Reserva is still unable to offer an unconditional licence of occupancy.
  • Completion date needs to be interpreted as a fixed date, and not a mere approximation.
  • An unproved strike somewhere down the construction process is not a valid excuse for a 4-year delay in getting a valid licence of occupancy and thus, being able to complete.

Conversely, the Malaga Administrative Courts have ruled on the admissibility of some of these licences and that La Reserva is entitled to them as these were granted pursuant to applicable laws.

The question that remains is: will these Judges ever get together for a pint or two and straighten out -legal- disagreements?

La Reserva de Marbella S.A. suffers another setback

February 12th, 2012

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!

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.