Claims worth more than €35m have been lodged in Spanish courts by Irish investors who lost heavily in that country’s property market crash.
An Irish agency is handling more than 700 cases on behalf of investors in Ireland and the UK who collectively lost millions in deposits on unbuilt Spanish holiday homes.
Thousands of off-plan purchasers who paid deposits to developers ended up losing their money after the financial crash in 2008 as Spanish property deals crumbled and developers failed to complete properties.
However, after more than a decade of legal wrangling, a ruling by the Spanish supreme court has paved the way for an estimated 60,000 Irish people to claim directly from the banks rather than property developers, most of whom went bankrupt.
According to investor Oliver Reel, who along with three brothers, lost over €200,000 in an off-plan development, many Spanish banks are now settling cases rather than risk the cost of full court hearings.
Mr Reel and his brother John are consultants for Reclaim in Spain, a Dundalk-based case-handling agency they helped establish, working with a lawyer in Spain. The success rate of their Spanish lawyer has also seen investors in Norway, Sweden, Germany, and Dubai sign up.
“The losses are huge, with over €35m being claimed in these cases to date,” said Mr Reel. “The Spanish banks are reeling as they know that they will have to pay out millions more, but they continue to contest the cases as they don’t want to be seen to be giving in.
“To date, we now have over 700 cases for victims of Spanish property losses at various stages of the process in the recovery of their money. That is almost one a day since we started helping people in late 2016.”
Reclaim in Spain works in tandem with a UK operation, The Claims Bureau, and its title reflects the fact that it is only banks in Spain that are being held liable for lost deposits. This is due to a specific law introduced in 1968 during the dictatorship of General Franco.
In 2015, the Spanish Supreme Court ruled that the banks had an obligation to safeguard buyers’ money.