I have recently been asked whether you can claim you deposit money back under Ley 57/68 if you had put deposits on multiple properties. The person asking had seen there are now successful cases but had been told he was not able to make a claim due to the number of deposits he had placed on property in Spain. Here is my understanding of this situation…
In short, I would say the answer is: it depends!
So what does it depend on? Well, basically Ley 57/68 was brought in to law in Spain in 1968 to protect purchases of off plan property from losing deposit money if something did not get built according to contract (or not built at all of course!). It required that developers and banks taking the deposit money either put the money in a protected account in the developers bank account, or insured the deposit money. The former being the most common and from which the bank would normally issue a bank guarantee document (but in many cases these were not issued, although case law now shows that even if this was not done then they are still liable).
However, the key here is that it was for genuine consumers looking to own a property in Spain, there is nothing in there to protect people that are using property as mere speculation to make money. It was not meant for such people who are used to taking on such risks and expect to lose money from time to time when things go wrong. In this case it is not so much the number of properties that are being purchased but the intent behind the purchasing of the properties.
Clearly, the bank or developer will see it as a defence to accuse someone claiming their money back that they are an investor rather than a consumer if they can. By persuading the judge about this then the claimant would not be covered under the law. It is therefore required to be part of the case to present any information that might be necessary to defend the claimant from this accusation. It may have been, for example, that a purchaser was buying for them and also their children so that they can have a place to holiday together. Even if this is intended to be in later years. Also there might have been a desire to have a few properties in different locations in Spain, such as in-land rural property and coastal property.
Of course, if the number of deposits placed is abnormally high then it will be harder to prove that this is in fact the case. However, if there is a reason that can be argued then it can be used to defend the case.
Then of course, as with most things, it can depend on the judge as well on the day of the judgement. Even if this does not work out at first, you can of course appeal this if you feel you still have a strong case.
It is hard to give more general rules and guidance than this although a Spanish solicitor competent in dealing with these cases will be able to assess this for you and give you advice on this matter. If you don’t get a positive sounding solicitor the first time, you can always go elsewhere. Be careful however if they don’t want to take the case on for you on a no-win-no-fee basis, this is because it could just mean that they are taking the case on for you from which you only stand to lose more money by paying legal fees, with little or no hope.
I know the lawyers that I am dealing with are happy to give such assessments free of charge and are also mostly happy to defend people that have been bitten by the Spanish property deposit scandal as much as they can. Hopefully you can find such lawyers too, and ones that meet the other requirements I highlight in the rest of this blog. If you need to know more on this matter just drop me a line through the Contact page. Don’t give up hope just yet if you did place deposits on several properties or more!