A SPANISH bank has been ordered to pay hundreds of thousands in damages to expats over a failed off-plan development.
A Mallorca court ruled in favour of more than 80 buyers who had invested in the Cala Romantica development in 2006, via Sabadell solbank.
The 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 dozens of buyers, forcing them to fork out nearly €500,000, plus costs.
Sabadell 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.
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 law firm representing the claimants said the win could set an important precedent.
“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.
His firm has won 44 separate cases in 2017 mostly for expats.