Finca Parcs Action Group Leader, Keith Rule

Another Spanish off-plan property victory for Keith Rule & Costaluz Lawyers

● Sentence condemns Banco CAM (now Banco Sabadell) to return almost 250,000 Euros of off-plan deposits paid by the 10 group members together with interest & legal costs

● None of the Group members had received Individual Bank Guarantees to protect their off-plan deposits

● The Bank is convicted according to its obligations under Spanish Law, LEY 57/1968

Justice was delivered recently when the Judge in the First Instance Court in Hellín found in favour of the 10 group members from the 3rd Finca Parcs Action Group Lawsuit.

The Lawsuit submitted to the Court in October 2015, was to claim a refund of almost 250,000 Euros paid by the claimants between 2005 & 2008 to the developer’s accounts opened at Banco CAM for off-plan properties that were never built at the failed Finca Parcs development in Albacete.

The Court convicted the bank to return the off-plan deposits together with interest from the date the payments were made to the developer’s account & legal costs.

The off-plan project, Las Higuericas Finca Parcs, which is close to the village of Argramón in the province of Albacete, was abandoned in 2009 when the bank withdrew funding and the developer ran out of money. Only around 10% of the 617 luxury detached villas were completed, but not even those were issued with the First Occupation Licence by the local Town Hall.

Cancellation of the purchase contracts as part of this procedure was not required as the serious contractual breaches of the developer, including the failure to obtain the First Occupation Licences, was established in the previous cases.

Liability of the Bank

According to Spanish Law, LEY 57/1968, the Bank, under its responsibility, should issue or verify the existence of the corresponding individual Guarantees for off-plan buyers funds paid to the developer’s accounts at its branches.  The Bank failed in this legal obligation.

Regarding the involvement of Banco CAM, which claimed it had no relationship with the buyers, the Judge stated:

“Jurisprudence imposes on banking institutions an obligation to control and supervise the amounts delivered by buyers to the developers account under the scope of LEY 57/1968 and they must ensure that the amounts are guaranteed to be returned in case the housing is not delivered on time.  The Bank cannot hide from this obligation due to the absence of guarantees or the non-use of special accounts for the receipt of the buyer’s payments.

In the present case it is clear that the various payments made by the buyers were paid to two special accounts opened by the developer at Banco CAM.  Therefore the bank must comply with the obligations imposed by LEY 57/1968.  The bank should apply special diligence in controlling the funds paid to these accounts.  Therefore an alleged lack of clarity regarding the payments or ignorance of the identity of the buyers who made the payments is a defect directly attributable to the bank itself.

In addition the fact that some payments were made via an intermediary (agent or Lawyer) is also not a justification to exempt the bank from liability.

The income was made precisely in the special accounts.  By opening these accounts the bank is consciously accepting the obligations and responsibilities derived from LEY 57/1968.

With regards to interest, in accordance with multiple precedents it is appropriate to order the bank to pay legal interest in respect of the amounts due to each applicant accrued from the date of each payment to the developer’s account”

This Sentence is not yet final and Banco CAM, once described by the Governor of the Bank of Spain as the ‘worst of the worst’, does have the right to submit an Appeal to the Provincial Appeal Court in Albacete.

Previous Finca Parcs Action Group Lawsuits

Banco CAM has already lost two previous Finca Parcs Action Group Lawsuits at the Las Higuericas Finca Parcs development including the landmark victory for Keith Rule and the other 46 members of the group in June 2012.  In that group action the Bank appealed the First Instance Sentence and lost its appeal in the Provincial Appeal Court in Albacete in April 2013.  The Judge stated that CAM Bank was guilty of malpractice and a complete dereliction of its duties.  The Bank & developer were convicted jointly and severally to return off-plan deposits paid by the 47 buyers totalling almost 1.5 million Euros plus interest & costs.

The second Finca Parcs Action Group Lawsuit for 13 buyers was won in January 2016 with the Bank convicted to return almost 500,000 Euros of off-plan deposits plus interest & costs.

4th Finca Parcs Action Group Lawsuit

The Trial for the fourth Finca Parcs Action Group Lawsuit takes place in the First Instance Court in Hellín on Tuesday 16 May 2017 in which 6 more group members are claiming just over 200,000 Euros plus interest & costs.  The Bank has called the 6 claimants to the Trial for questioning.

Finca Parcs Action Group Leader, Keith Rule (pictured says:

“We have now won three group cases against Banco CAM for Finca Parcs buyers.  The first was a landmark victory in 2012 when the concept of legal action against developer’s banks was in its infancy.  We are now ready for the Trial in the fourth Finca Parcs Action Group case.

These successes allowed strong bonds to form between myself and CostaLuz Lawyers/De Castro. As a result I was invited to join the CostaLuz team back in 2013 to assist others in their quest for off-plan deposit reclaims on failed property developments all over Spain

2016 saw the Supreme Court confirm its doctrine on liabilities of banks receiving deposits, though a case won by CostaLuz Lawyers/De Castro against Caja Canarias (now Bankia) for an off-plan property in the Canary Islands”

María de Castro, Director of Costaluz Lawyers comments:

“We at CostaLuz Lawyers & De Castro were the pioneers in this type of action and have now won more than 250 cases against developer’s banks for buyers on failed off-plan developments all over Spain, including these three Finca Parcs group cases”

Group Lawyer, Jaime de Castro comments:

“Spain is unique among European countries in having an effective Law to safeguard buyer’s off-plan deposits.  The Spanish Courts have been applying this Law strictly since the Finca Parcs landmark victory in 2012 and I am confident this will continue”