Los Lagos de Santa María and Supreme Court

Very recent Court Decission by the Supreme Court in regards of this conflictive development in Marbella. Los Lagos de Santa María. Third time the Supreme Court discusses on this in October 2013.

Supreme Court, following a doctrine they started last year ( 10th of September 2012), again, states that lack of First Occupation License is a cause for contract cancellation just in two cases:

1) If the lack of first Occupation license was expressly agreed as essential ( major breach) in the contract

or, in deffect of the above

2) In those cases where related circunstances tell that granting of First Occupation License will not come soon due to possible planning illegalities.

Developer will always be able to prove that the Lack of License is accesory ( minor) and not an essential ( major) breach if the lack of obtention of this is not related to ” unpossibility to give to the unit the use it was built for”

A reform/clarification of Law 57/68 seems necessary to me as all this doctrine seems to somehow contradict Law 57/68 and, specially provision 3 which clearly says:

“Article Three – Upon expiration of the period allowed if the construction and delivery of the
dwelling has not taken place, the buyer may choose between the cancellatino of the contract  with repayment of the amounts paid in advance, plus the six percent annual interest, or give the developer extended time and this period must be stated in an annex to the contract awarded,  specifying the new period with the date of completion of construction and delivery of housing”.

I can understand that law 57/68 is possibly too general and that there should probably be a classification of breaches with corresponding consequences                                      ( compensation/cancellation), but, being Law as it is at present, I find difficult to assumethat the Lack of First Occupation License will just grant cancellation rights to buyers if this has been expressly agreed in the contract or a Urban/Planning illegality is involved.

What about those cases where developer run out of funds or run away with them and development is not finished for years, where no Urban/Planning breach is involved?



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