If you made a payment to purchase a dwelling under construction with no guarantee from the developer and it has not been completed, then you can make a claim. The Supreme Court has established legal doctrine and judges are sentencing banks to return non-guaranteed payments.

The Verdict of the Supreme Court on 8th April 2016, following the doctrine created by previous resolutions of the High Court, like the rulings of 16th January 2016 and 21st December 2015, indicate that:

“The doctrine that this session adheres to is that the second condition of art.1 of Law 57/1968 imposes on the bank an obligation to control the developer whose failure to follow through means that the bank is responsible to the buyer. This is even more relevant when, as in this case, the bank is the same in which the developer had the open account and that had received the advanced payments from the buyers. The doctrine that this session adheres to guarantees the total covering of the advanced payments, even though there is a lower upper limit in the corresponding document, as if that was not the case it would infringe art. 2 of the Law 57/1968.”


The legal basis is that article 1.2 of Law 57/1968 says that the financial organisation should demand from the developer the legal guarantee of the insurance of the bank surety for the opening of the account into which the advance payments of the buyers will be paid. They should take the responsibility of requesting it. That is to say that, if it is not done, then the financial organisation is the responsible party.

 Amongst the requirements to be able to make a claim for a quantity paid as part of a purchases contract for an uncompleted home are:

  • That there is a free purchase agreement for the dwelling, not one that is officially protected, whether it is a primary residence or second home.
  • That the purchase was completed before the 1st of January 2016.
  • That the amounts have been paid into the bank account specified by the developer, even if not a special type of account, with no guarantee or insurance.
  • That the development company has defaulted on their obligation to hand over the dwelling or has not finished constructing it within the set time frame.


If you are affected, at ATO Lawyers SLP we can help you to recover your money.