Expats win 10-year battle with Spanish bank over failed investment project

A Spanish bank has been ordered to pay hundreds of thousands in damages to an 80-strong group of expats over a failed off-plan development.

A Majorca court ruled in favour of more than 80 buyers who had invested in the Cala Romantica development in 2006, via Sabadell Solbank, according to Spanish expat specialist website The Olive Press.

The Cala Romantica group action is one of a series of recent cases that have seen expats lose money, with the victory potentially representing an important precedent in the region, according the victorious lawyer.

“There are hundreds of examples like this throughout Spain as a result of the bursting of the financial and real estate bubble,” said CostaLuz-DeCastro spokesman Keith Rule told The Olive Press.

Rule said that his firm alone has won 44 separate cases in 2017 mostly for expats.

The Cala Romantica homes were due to be completed by 2008 but construction stalled before the contracts were cancelled in 2011 when the developers declared bankruptcy. CostaLuz-DeCastro sued the firm’s bank on behalf of buyers, forcing them pay back almost €500,000, plus costs.

Sabadell Solbank argued that it had no legal relationship with the claimants as it was not involved in any of the purchase contracts. Lawyers for the bank also claimed the time limit to file a lawsuit was one year, according to the report.

They added that the bank is not mentioned in any of the contracts and that none of the off-plan payments were paid to the developer’s accounts at Sabadell.
However the Judge disagreed, saying: “The fact that the claimants did not demand the delivery of the individual guarantees does not exempt the bank of its responsibility”, The Olive Press report stated.

ABOUT THE AUTHOR
Gary Robinson
Head of Video and Ezines at Open Door Media Publishing. An experienced journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as a fully qualified IFA, Gary works across both International Investment and InvestmentEurope titles. Previous video production credits include projects on BBC, C4 and SKY.

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