Spanish law firm wins €2.1m over lost property deposits

Lawyers win 13 cases this year as even more British and Irish property buyers seek to reclaim lost funds

A Spanish law firm has won over €2.1m this year for clients taking action to reclaim lost deposits from Spanish banks.

CostaLuz Lawyers has won 13 court cases in 2017 with more British and Irish property buyers seeking to reclaim lost deposits.

So far this year, six banks have been ordered to make payments to British and Ireland property buyers: SGR, BBVA, Banco de Sabadell, Caixabank, Banco Popular, and Caja Rural.

The amount awarded across all 13 cases totalled €2,155,072, plus an amount of interest that is still being calculated. The highest payout in any one case was €958,000, plus interest.

After successfully supporting English property buyer, Keith Rule over the €54,000 deposit payment he made to a Spanish developer that never built his promised home, CostaLuz Lawyers has been inundated with requests for help. Mr Rule now works for CostaLuz, managing its British office.

“The ruling made in respect of my own case opened the doors for those in similar situations to come forward and try to recoup their lost investment. It’s not a quick process, but it is possible to beat the banks and reclaim funds that were handed over in good faith, even if the transaction dates back many years,” said Mr Rule.

Those being represented hailed from all over Britain and Ireland, while their investment locations were spread out across Spain. The only thing they had in common was that they had paid out money for a dream home, only for their dream to turn into a nightmare.

In one case, at La Reserva de Marbella, the homes had been built illegally. Another related to the Malaya political and planning corruption saga at Marbella’s local council. Yet another was due to the developer’s descent into insolvency when Spain’s economy crumbled following the global financial crisis.

“These successful judgments are making a huge difference to people’s lives. The stress associated with going through the process of losing so much money can never be taken away, but at least a ruling that the bank is required to pay back the money (plus interest) finally draws a line under the matter,” said Mr Rule.

“However, there’s more to it than simply getting people’s money back. The evolution of Spanish case law that we’re seeing is going a long way to restore faith in the Spanish property market. The Spanish judiciary is working hard to ensure that a system exists in which individuals’ rights are respected and that Spain is one of the safest countries in the world for the purchase of off plan property.”

Spanish authorities are anxious to regain trust in their property market after a series of scandals over the past 15 years, including the case of Fernando del Valle, a Chilean-born lawyer based in Marbella whose firm was helping drug dealers launder money through property development in the south of the country.

In 2005, Irish people seeking a place in the sun found their properties seized in Spain’s biggest money laundering investigation. The €600m fraud saw 251 properties, including two entire developments, confiscated in a series of police raids along the Costa del Sol.