Tag Archives: Spanish Developers

LAW 57/68 IN PLAIN ENGLISH

  • The law is there to protect off-plan property buyers and their deposits.

  • It’s very short and precise, in black and white

  • If a developer wanted to sell off-plan they had to obey certain rules

  • It’s applicable to Morocco when there is a Spanish developer involved.

  • Developers should have asked their clients to transfer the money to Morocco and NOT to Spain.

  • They breached the law.

  • How can we prove it? – Didn’t I sign my contract with developer x?

  • We must prove to the court that the Maroc side was the Spanish one masquerading as a “Moroccan” developer.

  • How?

  • “A verdict for all verdicts” – What’s this? – We call it a “Matrix” – A sentence confirming all the “masquerading” that’s all.

  • How can you do this? – We’ve got the documents… Took long enough!

  • What happens if we win? – We create a precedent and THEN we’ll put your individual case through.

  • Who pays you at the end of the day? – The “unfortunate” bank – What happened in reality is that developers unconsciously passed the “buck” to their bankers, pity for them, under the law they (the bank) should have blown the whistle and insisted the money went to Morocco. Did the money go to Morocco? – We don’t know but it doesn’t look like it, otherwise…

  • Can I join that “matrix” case that you’re talking about? – If your money went to Spain and not to Morocco, it’s up to you. You don’t have to.

  • Don’t forget… There are TWO cases, one that will give us very good guarantees if we win and there is your individual case.

  • Why don’t I just wait until you win that case and then jump in? – Because it will be more expensive then.

  • And the Moroccan case we are all embarked on?

  • This goes on, business as usual. You will still get regular updates as up to now. This is SEPARATE AND PARALLEL.

  • Again… You don’t have to.

Melilla, 30st August 2019

My thanks to Bufete Salmerón in Seville who have made me aware of this possibility and provided the information and methodology. Bufete Salmerón specialise in Real Estate Banking. You will find there are few who will offer such solid knowledge and experience in this field.

MOROCCO

For many years developers based in Spain, both homegrown and foreign, invested heavily in the Kingdom of Morocco as a result of this country’s drive to promote a second home market, all under the umbrella of Plan Azur 2010, an ambitious government sponsored infrastructures programme to facilitate this.

At first, some of these developers financed themselves in the traditional way, that with construction and project finance from a bank back in Spain, even if the collateral for the loans were in a different country.

The major developers had, in those boom years, no difficulties in obtaining funding, basically because they had other assets in Spain to back it up.

However, the problem arose with the smaller and foreign developers operating from Spain. These had little or, no assets making the granting of loans difficult, especially for construction in a different land.

To build in Morocco, these developers had to do it through a Moroccan subsidiary, an S.A.R.L, but in many cases, these companies were merely a vehicle for their day to day with the bulk of the activities were in Spain, and as we shall see later, most of their banking, which has become key in this Moroccan angle.

The mechanics to receive client’s deposits for off plan property in Morocco was simple, most simply came to Spain. This, despite that Morocco’s exchange control regulations quite clearly says that all funds to invest in property in their country had to be channelled through it. If these procedures are not followed, in the eventual case of a future sale of the property, the vendor would find it impossible to repatriate funds to their countries of origin.

Unfortunately, there is NO proof in most cases, and with most developers of this type, that funds were received in Morocco. In fact, in my opinion, the little funds that managed to get there was just enough to pay salaries, taxes and suppliers, and not necessarily to officially declare client’s investments.

Another curious angle is how foreign buyers used their Spanish based lawyers to channel payments to the developer. This would have been fine if the lawyer had sent the transfer to Morocco, but somehow, these transfer almost all ended up in the developer’s account in… Spain. Here we have a doubled edged scenario of a well-intentioned lawyer following the developer’s disposal instructions of funds when they should have known that this was not the right procedure.

To be continued

PREFACE BY Sr. Fernando Salmerón, Bufete Salmerón, Sevilla (Spain):

Law 57/68: Permits buyers of off-plan property to directly make a claim to all those banks (not developers) who take in buyers deposits as long as the property is not finished or in all those cases where the property is finished but the contract is resolved before a final occupation licence is issued by the local authorities and/or that the buyers have been required to complete (and the property is not of the contracted standard).

Interpretation of this law has been perfected by the Supreme Court and it’s systematically applied in cases where there is a bank guarantee (general or individual) in favour of the buyer or where there is no such document.

It’s a technical legal procedure that requires the participation of a specialised legal firm with a wide knowledge and experience of civil and banking procedures.

Fernando Salmerón, August 2019.

LAW 57/68 NEW DEVELOPMENTS

LAW 57/68 NEW DEVELOPMENTS

A little over a year ago I wrote about a peculiar old law in Spain that could come very handy for those Moroccan Real Estate developers who channelled their money through the Spanish Banking System, whether it was to the developers themselves or the client’s lawyers.

There have been considerable developments since then and in the next few weeks I will be posting here with full fully and will try to guide the reader through the details and offer all the legal angles available.

Suffice to say for now that we are concerned here only with those Spanish developers who built in Morocco through a Moroccan subsidiary and only in those cases where client deposit was transferred to Spanish accounts

As I will be gradually deciphering this law in plain English, I think that the best thing would be to follow the blog for the next few weeks and you will be ongoingly notified automatically.

Many Thanks

Jorge