Responsibility of the bank in urban unlawfulness

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La Reserva de Marbella was one of the illegal developments that, nevertheless, was finished and “occupied” by its buyers.

In these cases where the buyer signs a Notary sales deed for the purchase of a non-licensed house, he is placed in a legal “limbo” in which he can “occupy” his property – which cannot even be called homes – but cannot be “legally inhabiting them”, nor renting them, selling them, or offering them as collateral: they simply are not in legal traffic. Electric companies cannot supply electricity to a house with no license so in many cases they need to use the contract of the developer in order to be able to live in the house.

This recent Judgment of the Malaga Provincial Court, fifth section, dated March 7, 2017, in harmony with a recent one of the Supreme Court of September 12th, 2016, punishes the banks in these circumstances of urban illegality, which in our opinion is the best way to compensate these buyers who have been driven to a dramatic situation as they own property without any legal value and without the possibility of using them in legal traffic.

The very important Supreme Judgment to which we refer, which condemned a bank in a case of urban illegality, said:

“The legal guarantees of the anticipated amounts for the acquisition of housing that regulates the law 57/1968 and additional first provision of the LOE extend to those cases in which the contract of purchase and sale does not reach a good end, to be declared null by invalidating vice of the consent because of the promoter having concealed to the buyer the existence of vices of the building of urban nature”

Therefore, since these contracts are null, law and jurisprudence also consider the mortgage loans linked to them to be null and void, and the buyer can request the return of everything paid before and after signing the mortgage plus the corresponding interests. The return of these amounts finally places the buyer in a position to opt for a legal home where to enjoy, in many cases, the savings of a lifetime.

The judgment recently won by our office in the Provincial Court of Malaga condemns the bank to the return of all the amounts delivered in the Marbella Reserve before deed, plus legal interest since the amounts were delivered plus the costs of first and second instance.

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