Tag Archives: Morocco

LAW 57/68 – EXPIRY DATE

It is unlikely that many of our clients are familiar with Spanish Law, but, just in case there are one or two out there that have read about how legal cases can have a “sell by date” here, I’d better explain all this business about expiry dates that in Spanish law is called prescripción and in Common Law as “Statute of Limitations”

Under the Spanish Civil Code, a case can “prescribe” within a certain period if it’s not mentioned specifically by the law used.

Law 57/68 doesn’t mention time limits

So, something called “plazo general”, plazo in this case means deadline, is used.

The “Plazo General” has a shelf life of 15 years.

That’s all right then, still got a couple of years, I bought the “property” in 2006.

But hey, I’ve read that in 2015 (7th October) the Spanish Civil Code Article 1964 was changed and that for these types of cases, the “expiry period” was now only going to be for five years.

So, If I paid my money through the Spanish Banking System in 2006, with this new scenario my case was null and void back in 2011.

OH NO, NO… The change in the article carries something that it’s called a régimen transitorio (that more or less translates itself…). This means to give all five years starting 7th October 2015to to have another bite at the cherry if they haven’t done anything yet. So, your sell by date is now 7th October 2020.

Another bite at the cherry indeed… Nobody knew anything about this law until a few years ago. That’s why I like to call it the “great unknown”

So, there you have it, Ladies and Gentlemen, just under 13 months… And I still have four more Spanish/Moroccan developers to do.

There a lot a technical stuff here and I had my doubts if I really wanted to publish it and bore people to death. But I’d rather have that than someone coming to me because they had been given wrong and alarming information.

Talking of information… If you’d like to receive more, don’t hesitate:

jorge@nottinghillinversiones.com

 

 

 

 

 

Advertisements

INTERPRETATION OF THE LAW (OUR CLAIM)

Second – Receiving the sums advanced by purchasers through a Bank or Savings Bank, which must be deposited in a Special Account, with separation from any other funds belonging to the promoter, which may only contain funds deposited for the construction of dwellings. For the opening of these accounts or deposits the Banking institution or Savings bank, under its responsibility, will demand the guarantee to which the previous condition refers.

(For the law to be applicable)

  • Monies for off-plan house purchased MUST be credited to a Bank account (or Savings Bank). In Spain these are/were called “Cajas de Ahorros”

  • This account MUST be separate from that used for the day to day of the developer.

  • The funds deposited in the special account MUST be used to finance construction.

  • (The interpretation we are pushing forward which is backed by the law): The Bank MUST insist that these funds are spent on construction and only construction)

NOTES TO BACK UP OUR CASE:

  • Did the developer’s Spanish bankers supervise the above?

  • Was, the developer’s Spanish bankers aware that these funds were destined for Morocco where the only way you can register an investment from abroad is by channelling funds through their banking system.

  • Why did the developer in, some cases instructed, Moroccan Real Estate investors to remit funds to a bank outside the country?

  • Was the developer properly advised in Morocco about the nature of their investment laws?

  • Why did Spanish lawyers (who should have known better) transfer their clients funds to the developer’s bank in… Spain.

  • Did the developer know that in order that their buyers could repatriate funds in future the only way to do so is by individually declaring the investment in Morocco?

  • Were any funds transferred by the developer done so in bulk or under individual names? If the former took place, the developer and the client’s lawyers were jeopardising any future prospect to repatriate funds.

TECHNICAL POINT

The case is against individual banks and NOT against the Spanish arm of the operation of the different developers involved. Under the clauses of the law, banks are obliged to reimburse ALL funds channelled through its books plus interest at 6% per annuum.

LEGAL PRECEDENT

LEGAL PRECEDENT

As stated beforehand, we are operating as in common law countries, we have explained that the law permits precedent, in other words, a favourable ruling in the matrix case, will be the guide for winning the subsequent individual cases.

(One Example – Of Many) – Developer X

In the last two years we have established links between S.A.R.L’s (Morocco) and S.L’s (Spain). The extract of the documents we hold, that is the Moroccan Subsidiary’s full legal documentation for Morocco that will eventually be presented to a judge in Spain and hopefully establish the matrix ruling that will create precedent.

We also know that, at least in my experience, that considerable amounts of money invested in Moroccan Property, were indeed, channelled through Spanish Banks.

CONTROVERSY

Quite a number of law firms have tried to apply law 57/68 in respect of properties in Morocco. With some developers, specially, those who did not furnish their clients with bank guarantees, it has been specially difficult to obtain and prove the link between the Spanish and Moroccan arms of the operation, not because these links do not exist, but because to obtain any detailed official documents is practically impossible to those who are not on the ground. With one developer in particular, it has taken us over three years to obtain that proof, all with considerable expense. Obviously, these documents are worth their weight in gold and will be presented to the court for the matrix case in Spain. A favourable resolution here will lead to all hope for the subsequent presentation of individual cases, this time with an extremely high percentage of success.

 

 

LEGAL PROCEDURES

The procedure is divided in two stages:

  • A potential favourable ruling on the link between the S.A.R.L and the S.L (A general matrix ruling)

  • Individual case by case (Each client individually).

MATRIX RULING:

What is a Matrix Ruling: (In this particular case) It is a case won by the accusers at the first instance court that will create a precedent, Law 57/68 is one of those pieces of Spanish legislation that admits precedent. Spain is a civil law country and not Common Law, as for example the UK. However, in some instances the civil code admits precedent which in Spanish is called “jurisdicción” (jurisdiction has a different meaning under, say, English Law). What are we trying to achieve with this? – Very simply… We are trying to prove that the S.A.R.L (Morocco) and the S.L (Spain) companies are one and the same. If that ruling comes through, it will be taken into consideration by a judge when the time comes to take to court each individual case. According to my legal sources, if this is established there is an 80 to 90 percent chance that the defendant will win each individual case. The Matrix case will take less than a year to come through.

INDIVIDUAL CASES:

Armed with precedent, each individual client will take “their” bank to court in order to claim the deposits originally transferred and to win a compensation package.  This is the second stage.

 DOCUMENARY REQUIREMENTS:

For the Matrix Case there is no need to send any personal documents, we will only require a signed mandate form and a Power of Attorney. Both documents we will prepare.

For each individual case: If you are an existing NHI client, we will have all the information on how you paid the developer. Eventually, you will need to notarise and apostille the following documents:

  • Sales Contract (French Version Only)

  • Proof of Payment (Very Important)

  • Power of Attorney (Spanish Version Only)

  • Copies of Passports (No need to Notarise nor Apostille this)