British expats and second home owners who lost deposits worth billions when developers went bust in the Spanish property crash can finally reclaim the money they lost for homes that were never built.
Banks are paying the first compensation awards to homebuyers following a supreme court ruling in Spain in 2015.
Lawyers reckon around 130,000 British property buyers are owed £5.3 billion handed to builders as deposits and stage payments on off-plan homes that were never completed.
The compensation ends years of legal rows that ended with developers going bust instead of handing back the payments.
Banks must pay
Now, instead of chasing the developers, homebuyers can reclaim their money from Spanish banks as the court ruled the banks are liable to repay their money.
“Many people are so fed up they can’t face the idea of going to court again,” says Luis Cuervo, CEO of Spanish Legal Reclaims, which is handling hundreds of cases. “What they need to understand is that they now have a good chance of recovering the money. It’s not property developers we’re up against now, it’s banks – and they have the money to pay.
“People who took developers to court were badly advised because they all just went bankrupt. They spent more money, won the case but got nothing. Only a minority who had bank guarantees went to court and won.”
The Spanish court put a 15 year time limit on claims that starts from the expected completion date of the property.
What lawyers need from buyers
To win, say lawyers, the claim must prove three points:
- The buyer had a contract with the developer
- A deposit or other payments to the developer were made by the buyer – not just to lawyers but the lawyer should show the payment was passed to the builder
- The property was not completed
Lawyers will also need to see any documents relating to the property purchase and if a court judgment was awarded against the developer.
The final date for applications for compensation is October 7, 2020.