A Spanish bank that refused to return off-plan deposits belonging to 47 British expats who invested in a failed Spanish property development has been ordered to repay €1.5million, following a six-year legal battle.
Known collectively as the Finca Parcs Action Group , the expats each paid between €10,000-70-000 in deposits for off-plan homes on a 'luxury development' near Murcia, only for the developer to disappear and Spain's fourth biggest savings bank, Caja de Ahorros del Mediterraneo (CAM (Madrid: CAM.MC - news) ), to withold their downpayments.
Keith Rule who has headed the action group and fought for the return of his €53,000, said: "For far too long Spain has alienated the very people who once helped the country prosper.
"Now the Spanish Government must learn important lessons from this case.
"If these types of cases are dealt with in a fair and speedy manner then maybe some of those people who have been the victims of negligence and malpractice may once again have the confidence to invest in Spanish property.
"After all that is what Spain wants and more importantly, desperately needs."
CAM bank was the sole financial entity in the project, responsible for financing the development, accepting the off-plan deposits and issuing the corresponding, legally required, bank guarantee certificates to buyers.
In 2009, four years after the first deposits were handed over, the developer abandoned the development and disappeared, having built only a fraction of the homes, while the expats were still without the required bank guarantees, despite repeated requests.
"We did everything by the book before buying into these properties so felt particularly let down when the bank pulled the rug from under our feet, said Mr Rule.
"The development was advertised in Easy Jet magazine, the sales agent was British, the developer even stated on the reservation forms that it was represented by a UK lawyer, the project was launched with a champagne reception at Chelsea Football Club surrounded by sporting celebrities - we didn't think for a minute it would all go so disastrously wrong", said Keith.
When investors realised their holiday homes would never be built, Cam bank replied that it was not obliged to return their money because they were not in receipt of the very certificates it was supposed to issue.
At the court hearing in Hellín, Spain, the judge ruled against developer Cleyton GES SL and CAM bank, referring to 'serious breaches' on behalf of the developer and an 'absolute disregard by CAM bank to the obligations imposed on financial institutions by Spanish law.'
CAM bank was nationalised by the Spanish government in 2011 and then sold to Banco Sabadell for the sum of 1€, with all future losses underwritten by the government for the following five years.
Banco Sabadell declined to comment on the ruling.
The ruling gives hope to other expats, believed to run into the thousands, who have suffered at the hands of unscrupulous Spanish banks and developers after investing in Spanish property.
There are estimated to be 700,000 unsold holiday homes in Spain, the majority of which are located along the southern coastlines, where property prices have dropped by as much as 60 per cent in certain regions.
A spokesman for the British Embassy in Spain said: "The government and British Embassy in Madrid continue to urge the Spanish authorities to seek solutions to the problems facing property owners".