It may happen that, in these types of contracts, the developer fails to meet its obligations. This can occur, for example, if the construction of the property has not begun within the agreed timeframe, or if the property is not delivered within the stipulated deadline. In such cases, it is crucial to keep the document proving that payments were made in advance towards the purchase of the property, as well as the sales contract, in order to proceed with a claim.
Moreover, the possibility that the developer may disappear or file for bankruptcy should not alarm us, as developers are required by law to arrange insurance or guarantees to secure these advance payments. In the end, these amounts can even be claimed from the bank or the insurance company.
If the developer fails to return these amounts, they could be committing the crime of misappropriation, as interpreted by the Supreme Court. Furthermore, the Supreme Court has ruled on the liability of banks for failing to require the developer to open a special account to secure these amounts, thus allowing us to also sue the banks to recover our money.
Therefore, if it turns out that no financial guarantees were arranged, a claim can be made against the bank as a subsidiary liable party, since the bank is responsible for ensuring that the developer arranges the guarantee for the amounts deposited in the special account, as well as overseeing the handling of those funds.
As for the statute of limitations for claiming the advanced payments, there are three different periods depending on the law applicable at the time the sales contract was signed:
- Contracts between October 7, 2005, and October 7, 2015: 5 years
In accordance with the reform of Law 42/2015, of October 5, amending Law 1/2000, of January 7, on Civil Procedure, which came into effect on October 7, 2015. As a result, any action to claim the amounts paid in advance would have expired on October 7, 2020.
- Contracts after January 1, 2016: 2 years
In accordance with the new regulation in the First Additional Provision of Law 38/1999, of November 5, on Building Regulation (specifically section 2)
If you have any questions about the procedure and would like us to advise you or initiate a claim on your behalf, please do not hesitate to contact Lex Foris International Law.
Rafael Montes Velástegui