THE JUDGMENT OF THE SUPREME COURT OF DECEMBER 2015

A 1968 Law enforces the banks to respond for failing their surveillance work of the developers. This means that when a buyer pays different sums on account of the purchase price in a bank account of the developer and finally the latter does not finish the building or cannot hand over the keys, the bank is joint responsible with the developer for breach of contract. Many analysts think that the claims for this problem may have even greater magnitude than those associated with floor clauses and the Bank of Spain is reluctant to give details about its impact. Although there are no official statistics on the number of people affected by the purchase of properties that were never built, it is estimated that there are more than 600,000 cases. There are more than 500 developers and cooperatives in receivership all around Spain, which means that hundreds of thousands of families who bought on the plane neither have their homes nor have their monies back.

In December 2015 the Supreme Court issued a judgment strongly condemning the banks to return to the homebuyers the money paid on account of a property on plan through cooperatives and promoters. This judgment created jurisprudence ruling that banks have to respond to homebuyers who had lost everything when purchasing a home.

But, why are banks liable for bankruptcy of the promoters? Simply because this was determined by Law 57/68, in vigor at the time of ruling the judgment of December 2015, but still protects the rights of homebuyers who bought on the plane before 1^st January 2016 (date when the said law was derogated). This 1968 Law required developers to take out an insurance or bank guarantee to assure the return of the amounts paid on account in case they were not built or were not delivered within the agreed period.

BETTER LATE THAN NEVER

Why right now? Because of the tiredness of buyers. As a matter of fact, this is not a new matter. This type of lawsuits against the banks for joint responsibility with the developer started in 2010/2011 ending up with contradictory judgments of the High Courts (some consider the banks responsible as guarantor and other ones not). After the judgment of December 2015 the claims have been skyrocketed because the Supreme Court has now undoubtedly ruled that the banks are joint responsible (even when they keep saying that they are not) and now, the High Courts and Courts have to apply such Supreme Court doctrine. The most required banks are Caixabank (including Caja Canarias and other saving banks), BBVA and Bankia, although they consider that this is a problem without importance (which is dubious as until now it is though that they have paid 200 million euros for this reason).

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