British homebuyers recouping £5.3bn

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BRITISH HOMEBUYERS are finally beginning to recoup the millions they paid for holiday homes that were never built after the Spanish property market crash.

In December 2015, a ruling in Spain’s supreme court paved the way for an estimated 130,000 Brits to claim directly from the banks rather than property developers, who promptly declared themselves bankrupt.

An estimated £5.3bn (€6.1bn) is owed to British homebuyers in respect of deposits and stage payments on properties purchased off-plan, most of which were never completed.

In total, approximately 500,000 people were affected, including approximately 300,000 Spaniards.

Before the ruling, only those buyers with bank guarantees could claim directly from the banks (about 5 per cent of people affected).

Spain’s supreme court then ruled that, regardless of whether buyers had guarantees, the banks had an obligation to safeguard their money.

The average case takes 12-15 months to complete so it is only now that the banks are starting to pay out.

Until the crash in 2008, the property boom had seen Spain building more homes than the UK, Germany and France put together.

Many of these were holiday homes on the Costas, but tens of thousands were built in urbanisations on the outskirts of many Spanish towns.

During the boom, Spaniards were buying first and second homes off-plan.

Spain is now littered with half-built, largely uninhabited housing developments.

Cases must be filed within 15 years of the expected completion date of the property.

If you think you are eligible you should first seek independent and impartial legal advice.

To proceed you will need the following:

• A signed contract between the client and the developer.
• Proof of payment into the property developer’s bank account. In many cases, the client will have transferred money to their lawyer rather than directly to the property developer’s bank. In such cases, your lawyer must locate the developer’s lawyer to get proof it received the funds.
• Judgments – if you have previously tried to take the developer to court, it is important to let your lawyer know.
• Other supporting documents for the property, such as paperwork or email exchanges, should be shared with your legal adviser to give them the best chance of reclaiming your cash. The deadline for claims is 7 October 2020.

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