Caixabank must pay more than one million euros for failed off-plan ‘Jardines de Manilva’ property development in Estepona, Costa del Sol

In March 2017, the Court of First Instance No.4 in Estepona ordered Caixabank (previously Cajasol) to pay a group of British buyers the sum of 958,275.30€ plus the corresponding legal interest.

The properties were not completed on time according to the Purchase Contracts which had been cancelled in previous legal actions against the developer.  Due to insolvency, the developer never refunded the buyers.

After the buyers filed a Lawsuit, the Bank objected, alleging that due to the intervention of an intermediary, Ocean View, in the purchase procedure, the developer with whom Cajasol signed the General Guarantee agreement had no direct personal relationship with the buyers.

The Bank also stated in its defence that the General Guarantee only applied to Phase 1 of the development and not to Phase 2 on which some of the buyers had purchased.

Finally, the Bank argued that the claimants had not proved the payment of the off-plan amounts into the special account and that the pre-determined limit on the General Guarantee was already exceeded with other claims.

None of the above arguments were accepted by the Judge.

The Judgment of the Court of Estepona quotes extensively from existing jurisprudence of the Supreme Court regarding the responsibility of the entities that issue General Guarantee Lines to developers of off-plan housing projects.  This jurisprudence allows the buyer to claim directly against the General Guarantor even if they were not issued with an Individual Guarantee.

The firm that represents clients, CostaLuz Lawyers-DeCastro has advised the clients to appeal regarding the interest as the Sentence only grants interest from the date of filing of the Lawsuit in 2013 and not from the date the off-plan payments were made to the developer’s bank account in 2004 & 2005.

The Provincial Appeal Court of Malaga has issued several sentences in other cases which grant interest from the date of payment as established by LEY 57/1968.

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