Spain’s Supreme Court applies law 57/68 to urban illegalities

In a recent judgment dated 12th September 2016, the Supreme Court states that if either nullity or cancellation of the contract of sale of illegal housing is requested, Law 57/68 and its entire body of doctrine apply.

Due to the masterful interpretation recently being applied to Law 57/68 cases by the Supreme Court, many thousands of people who invested off-plan properties during the financial boom and subsequent crash are now recovering their money.

Case Law history of the Judgment

Supreme Court Sentence (STS) of March 11, 2013

STS of 11th March 2013 stated that “the obligation to deliver held by the promoter/seller must not only be understood in its physical aspect but also in its legal aspect”. “The house needs to be in the legal status which will allow the buyer to exercise his rights on the acquired property freely and without legal obstacles”

“This results in cancellation of the sales contract when the lack of delivery by the seller of the license of first occupation responds to the presumed violation of the urban legality, as it would deprive the buyer the right to enjoy the house in accordance with its nature. It represents a fundamental breach of seller as it is to be concluded that the license will not be granted within a reasonable period“

Supreme Court Sentence (STS) of March 9, 2016

In the judgment 137/2016, of March 9, Rc. 310/2014, the house was finished when the buyer was required to grant the deed, however, it was not ready in the administrative aspect, not because of habitation deficiencies but due to urban planning deficiencies, which result in fear and loss of expectations.

For all the above, says the recent Supreme Judgment of September 12, 2016, “the existence of urban illegalities cannot be regarded as something that is beyond the scope of Law 57/1968”.

Despite a habitation license having been issued, In the course of the recent ruling of September 2016, the High Court of Extremadura ordered the reinstatement of the land to its previous state. This weighs on the litigious housing a certain and serious danger of demolition, based on a final court resolution.

The Supreme Court therefore has condemned Asefa to refund to the claimant all the amounts paid, plus legal interest from the delivery of quantities, plus penalty interest of Insurance Contracts Act and to pay the costs of the first instance stage.

Along with the above, the Supreme Court has proceeded to establish doctrine as follows: “the legal guarantees of advance payments for purchase of housing governed by law 57/1968 and first additional provision of the LOE extend to cases in which the purchase contract of same does not come to fruition, as being declared null by lack of consent as the promoter-seller hidden to the buyer the existence Planning illegalities”

©2016 CostaLuz Lawyers. All rights reserved. Privacy policy and cookies. Copyright and disclaimer.