Petition against another Spanish scandal

Country:  Spain

5 December 2008

A large group of foreigners, including many Britons are about to lose their down payment deposits, despite a bank guarantee, after the Spanish development they bought into was declared an illegal build by the Town Hall.

Construction work on Santa Maria Green Hills got under way in 2003, and the build completed in 2005. However, those buying homes in the scheme were advised by their lawyers not to legally complete after the project was deemed to be illegal.

It turned out that the development, which was initially built by developer Eralia and completed by MVG, and contains 192 self-contained apartments, had only received initial planning consent for the construction of 11 town houses.

Ruth Genda is one of hundreds of people who wanted to purchase an off-plan home in the project, subject to a bank guarantee. She took Banco Popular to court claiming it had failed to honour the bank guarantee and won her case against the bank, only to then lose on appeal. Her counter appeal was unsuccessful.

Ruth has now “exhausted the legal process” and stands to lose around £90,000, which includes her 30% deposit. “It is an absolute scandal, which is why I’ve launched a petition,” she says.

Sign the petition

Homersoveseas.co.uk is now lending its support to the petition, as Ruth needs to get as many signatures as she can. We also want to help her raise the awareness of would-be-purchasers so that they know the dangers of not having an absolutely watertight bank guarantee.

“My understanding is that very few would-be purchasers have actually received their deposit monies back,” Adds Ruth. “Never was 'Caveat Emptor' -  'Let the buyer beware' - more appropriate,”
 
This petition highlighting the worthlessness of Bank Guarantees when buying off-plan property in Spain is to be sent to the Governor of the Bank of Spain by 31st January 2009.
 
A bank guarantee, known as an AVAL, is a legal requirement (Law 57/1968).  It is designed to give would-be purchasers an insurance against losing their deposits and stage payments they have made if for any reason the developer is unable to complete the contract.

The Petition requests that the Governor takes action against banks refusing to honour guarantees by invoking the Banking Discipline Law. 

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