 A spanish court forces the developer to refund 36.000 €
to a buyer who didn’t obtain their mortgage
The construction company will have to refund the Money paid plus the legal interests.
Circumstances only comparable with those of the “crack” of 1929 were given.
A Court in Logroño (La Rioja, Spain) forced a development company to refund the amount of 36.000 € to a buyer who deposited this money on account before the delivery of the apartment, as he did not get a mortgage for 296.000 € due to the economic crisis which according to the Spanish Legislation is considered a legal reason for the cancellation of the Private Purchase Contract.
The lawsuit submitted by the construction company Levalta SA against a private individual is dismissed, and the said company will have to give the money back plus all the legal interests.
In October 2006, this person entered into a Private Purchase Contract of a property with a parking space and storage room in the area of La Guindalera of Logroño, for an amount of 310.663 € plus VAT.
Both parties agreed an advanced payment of 6.018 € before the signing of the Contract, the amount of 13.282 € on the signing of the Contract and the amount of 14.400 € in 24 instalments of 600 €, which would commence on the 5th of December 2005.
In addition to this, they agreed that the amount of 28.431 € would be paid on completion (after the finalisation of the building works). The outstanding amount of 248.530 € would be paid through a mortgage the developers signed with the Spanish bank Caja Madrid.
The construction company presented the lawsuit when the buyer did not meet their requirements by phone and did not keep the appointment with the Notary which was planned for the 25th of May 2009.
According to the sentence, which could be appealed before the Provincial Court, the Private Purchase Contracts for properties are “Contracts of Adhesion” because these have not been negotiated between the parties. These have been “unilaterally drawn up” by development companies which “usually” include some clauses that are “clearly abusive”.
When the buyer went to Caja Madrid to get his mortgage by taking over the existing loan, this bank entity refused to grant it despite the contract stating the developers had to provide the client with the mortgage in order to pay the outstanding amount.
Source: EFE, June 2011. |
