Who can we help?
You may have tried recovering your money already; you may have experience of other companies’ more traditional approach to overseas property and legal issues. They may have failed you, without help and guidance from an experienced team of experts your losses could be increased substantially.
National laws such as the Spanish Ley 57/1968 and European Directives such as the EU Unfair Consumer Contract Terms Directive 1993/13/EC give the consumer quite good protection from Marketing Agents, Developers and Builders seeking to mis-sell or defraud people like you.
Mediation allied to the threat of criminal prosecution is often the most effective way of resolving property disputes quickly. Fraudulent misrepresentation and adopting trading practices outlawed by EU Directive 2005/29/EC are criminal offences, often punishable by a custodial sentence.
The threat of time in prison has the effect of concentrating the minds of even the dodgiest Land Agents / Developers wonderfully. They are not above the law. Several high profile Mayors have been jailed in the last few years in Spain for their roles in property fraud, as have some of their developer accomplices.
In most countries the authorities are genuinely keen to stamp out land fraud and other types of malpractice as it has a detrimental effect on tourism, inward investment and on the reputation of the country generally.
The H&G team has considerable experience of, and expertise in, dispute resolution work in Spain (including the associated Islands), Portugal, Cyprus, Malta, The USA (Florida), Italy, Bulgaria, Greece and even Germany. This is important because even after the efforts of the EU to harmonise consumer protection laws, each country still has its own quirks.
How we help:
We specialise in resolving disputes arising out of the purchase of land and property overseas, whether it is a second home, a retirement home, a buy-to-let investment or a timeshare or holiday club membership.
This also includes disputes with lawyers over negligent conveyancing or banks over the mis-selling of the finance used to make your purchase.
Most popular holiday home destinations are located by the Mediterranean. The Mediterranean social culture is wonderful as a lifestyle — it is a major reason why people relocate there – but it can be a very different environment in which to do business.
Court cases seldom move swiftly anywhere, and court cases in the Mediterranean often move at a ‘Mediterranean’ pace. Moreover rules of land and contract law (some of which can be traced back to the Roman Empire), can create a confusing and frustrating legal landscape.
It can often be more cost-effective to seek a negotiated settlement early, whilst maintaining the threat of criminal prosecution and/or a civil claim. Although one cannot negotiate effectively from a position of weakness.
Where practicable we make a point of making direct contact with the other parties to the dispute, usually face-to-face. We are positive, brave, knowledgeable, and persistent — and we get results.
The team at H&G can draw on years of experience of dispute resolution work (in this field and in others), as well as practical experience of the Spanish property market.
The proprietor lived and worked there for years — and the team have successfully recovered money for dozens, if not hundreds, of British buyers like you who have been ripped off or let down in Spain.
We also have strong ties to local lawyers and property professionals (though not in a way which inhibits our ability to fearlessly advocate our clients’ interests). We know how to pursue cases in both the civil and criminal courts. (If the evidence supports it, the latter is often a better option).
More than in certain other Mediterranean countries, the Spanish law is surprisingly generous to the wronged buyers of off-plan property. Indeed there are some respects in which your legal rights may be stronger in Spain than in the UK.
Whilst good practice has not always caught up with the law (particularly the Ley 57 of 1968, which requires buyers’ deposits to be secured by a bank guarantee or insurance), outright corruption is less common than it used to be.
An increasing number of corrupt developers, bureaucrats, lawyers and sometimes even town mayors have learnt this to their cost as they languish in prison. These rogues are not untouchable.
Indeed there are times when we have successfully used Spanish law in respect of purchases in third countries (usually Bulgaria or Portugal) that were made in Spain through Spanish-based agents (many of whom are expat Britons), preying on visiting holidaymakers.
We don’t just do Spain:
Our knowledge, experience and contacts stretch far beyond the Iberian Peninsula. We have successfully run claims arising out of land deals as far afield as: Florida, Portugal, Italy, Greece, Bulgaria and Cyprus.
Though relatively few Britons purchase holiday property there, we have some valuable contacts in Poland, Sweden and the UAE as well.
All countries in the EU have a shared body of consumer protection law:
Each country also has its own foibles:
- Cyprus’s colonial legacy has given it a body of law, especially contract law, which owes a lot to English law, so much so that many Cypriot lawyers have studied (and sometimes worked) in the UK. In the absence of a local precedent, Cypriot courts even consider whether to apply legal principles derived from court decisions from England.
However Cyprus is not a little England with more sunshine – it is also a small Mediterranean island bound together by personal ties forged by family or years of doing business together. Also banks and lawyers are as accountable as they were in England several decades ago, rather than as they are today
- Litigation in Greece can sometimes appear a bit like litigation in Cyprus only without the positives!
In spite of these challenges, the team has a healthy success rate in the Greek cases we have run. Also in Greek litigation (as in certain other practices associated with classical Greece), it pays not to be the passive party.
- Italy, like Spain, has laws promoting compulsory deposit protection for the buyers of off-plan property
- Whilst there are some cultural similarities between Portugal and Spain (one says “mañana”, the other says “amanhã”), there is no legal right to deposit protection equivalent to that in Spain or Italy.
That said our Portuguese partners are very good, and do what they can within a challenging environment.
- The team has had its successes over the years in Bulgaria too. Fussy notarisation and questionable translation are sometimes issues in this jurisdiction too.
In all countries (including the UK) one major problem is getting to a defendant whilst they are still solvent. If a company does not have the money, you can’t get it back from them even if they are banged to rights. This is why guarantees or insurance or (in cases of clear fraud) bringing proceedings against the people behind the companies can all become so important.
In the UK:
Though the idea may seem somewhat counter-intuitive, when you are embroiled in a property dispute overseas, you should not neglect the Home Front.
We don’t. Cases can sometimes be pursued in the UK by, for example:
- Using Articles 15-17 of the Brussels I Regulations. These rules of EU Law state that a contractual dispute between a consumer and a business which made a point of selling its product in the consumer’s home market (e.g. through a local agent or maybe even an English language website), should be heard in the courts of the consumer’s home country, unless the consumer chooses otherwise.
- NB: these Regulations cannot be used in respect of a contract to buy land (by operation of Article 22 of the Regulations), but they can be useful in relation to collateral contracts for other services; or
- By targeting UK-based agents who mis-sold overseas property to buyers in the UK (perhaps especially if they are regulated by the Financial Services Authority or some other regulatory body); or
- Where some or all of it was paid for using a credit card, by bringing a claim for misrepresentation or breach of contract against the credit card company using section 75 of the Consumer Credit Act. The credit card company then has to run the hard yards against a slippery foreign defendant which says it hasn’t got the money (and which, on this point at least, they may not necessarily be lying), so you don’t have to.Some “section 75” claims can even be resolved quickly and cheaply by a formal complaint to the Financial Ombudsman Service, without having to go to Court.However there are limits on the size of a claim that can be brought under section 75. This law therefore tends to be more useful in timeshare and holiday cases than it is with the purchase of freehold property.
Our network of ‘partner’ law firms extends into the UK as well:
Timeshares and Holiday Clubs
Timeshare contracts cannot simply be cancelled, or be cancelled simply.
Although we do not specialize in timeshare disputes per say, it has come to our attention recently that there are a number of agencies purporting to be able to help consumers caught in the timeshare trap. Please be advised that they all seem to be missing the point on several fronts.
Once you have entered into a contract, for timeshare or any other product or service both sides are bound by the terms and conditions set down in the contract. Both sides have obligations which they must adhere to. We are aware of many forums, companies and agents who state that you can simply walk away from a timeshare contract and not perform your part of the bargain. You cannot!
It is factually misleading and untrue to suggest that you can simply walk away from any contract which you have signed and are bound to. If you do walk away from a contract, you will be in breach of contract, which would leave you open to legal proceedings.
If you feel that you have been duped, miss-sold or simply ripped off.
You must take intelligent legal advice, and remedy the situation following the letter of the law. There is no quick fix, you can’t simply walk away, as contracts are designed to be performed, not ignored. There are several legal remedies available to you in law.
A Material breach:
Is any failure to perform that permits the other party to the contract to either compel performance, or collect damages because of the breach.
The following criteria can be used to determine whether a specific failure constitutes a breach:
In determining whether a failure to render or to offer performance is material, the following circumstances are significant:
(a) The extent to which the injured party will be deprived of the benefit which he reasonably expected;
(b) The extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
(c) The extent to which the party failing to perform or to offer to perform will suffer forfeiture;
(d) The likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;
(e) The extent to which the behaviour of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.
A fundamental breach (or repudiatory breach) is a breach so fundamental that it permits the aggrieved party to terminate performance of the contract. In addition that party is entitled to sue for damages.
A breach by anticipatory repudiation (or simply anticipatory breach) is an unequivocal indication that the party will not perform when performance is due, or a situation in which future non-performance is inevitable.
An anticipatory breach gives the non-breaching party the option to treat such a breach as immediate, and, if repudiatory, to terminate the contract and sue for damages (without waiting for the breach to actually take place).
A, contracts with B on January 1 to sell 500 sacks of wheat and to deliver it on May 1. Subsequently, on April 15 A writes to B and says that he will not deliver the wheat. B may immediately consider the breach to have occurred and issue proceedings for damages for the scheduled performance, even though A has until May 1 to perform.
If Company A refuses to pay substantial interim payments to Company B, Company B can begin legal action due to anticipatory breach. Company B could also stop performing its contractual obligation, potentially saving time and or money.
So what can be done?
In most instances timeshare club membership is not sold cleanly in Europe, because if it was, it would not make any sense to invest in it.By this we mean that many people have been miss-sold, miss-led or fraudulently maneuverer into signing for their timeshare product.
There is no such thing a 5 star luxury product, which is sold at 2 star prices, it simply doesn’t exist, however this is usually the hook which got you into the mess in the first place. As such we believe that in almost 100% of cases there will have been some form of miss-selling and if there has been then all is not lost.
Is a civil wrong which occurs when one party makes a statement of fact which is untrue, and that statement persuades another party to enter into a contract that they regret. It need not be written down, though it is harder to prove that the statement was made when it wasn’t written down.
Obvious sales talk which is not intended to be taken seriously and does not amount to a statement off fact does not count, nor do statements of opinion, though it can sometimes be inferred from an opinion that it is a representation that the statement-maker believes that what they are saying is true (which can be a misrepresentation if it transpires later that they did not do so at the time).
There are various levels of misrepresentation depending on the level of culpability that attaches to the incorrect statement at the time the person said it. The most serious kind is fraudulent representation, where the statement-maker did not believe the statement to be true at the time they said it.
Misrepresentation which is this serious may well be a criminal offence under the Fraud Act 2006 as well. Then there is misrepresentation under the Misrepresentation Act 1967, where the statement-maker may or may not believe the statement to be true at the time they made it but they realise at some point between making the statement and the person entering into a contract as a result of relying on the truth of the statement that it is not true, yet they do not pass on this correction to the person who heard the first statement.
The next most serious is negligent misstatement, where the statement maker owed a duty off care to try and get it right and got it wrong (probably without realising it), but in circumstances where they would not have got it wrong if they had made reasonable (though not necessarily exhaustive) enquiries in order to try and get it right. The least culpable kind is innocent misrepresentation, where the statement is false, but the statement maker did not know it was false and was not careless about whether their statement was correct or not. Though there are circumstances in which even innocent misrepresentation is enough to allow the person who relied on the contract to be allowed to cancel the contract as if it had never happened.
From this you can see that it is important to establish what the statement-maker knew at the time they made the statement, and at the time the person relying on the statement signed on the dotted line.
An important factor in being able to cancel a contract for misrepresentation is cancelling the contract quickly once you know there is a problem. You may lose the right to cancel through the passage of time since knowing of the problem, or if cancelling the contract and trying to put the parties back where they started is complicated by later contracts with third parties. However even if it is no longer possible to cancel the contract it may still be possible to claim compensation, reflecting the losses you have suffered as a result of entering into a bad contract that you would never have entered into were it not for the misrepresentation.
Another important factor in many misrepresentation cases involving timeshare is that the later contract may seek to exclude liability for misrepresentation in some way, through a disclaimer or a clause excluding liability or a clause saying that the terms of the contract form the entire agreement and any pre-contract representations are neither here nor there. Do not assume that these clauses are binding — sometimes they are unenforceable as a matter of EU (or UK) consumer protection law.
The Law; Fraud by False Representation (Section 2):
It is an offence to commit fraud by false representation. The false representation must be: – made dishonestly; with the intention of making a gain or causing loss or risk of loss to another. The gain or loss does not actually have to take place.
A representation is false if: –
(a) it is untrue or misleading; and
(b) the person making it knows that it is, or might be, untrue or misleading.
“Representation” means any representation as to fact or law, including a representation as to the state of mind of:
(a) the person making the representation, or
(b) any other person.
A representation may be express or implied. It can be stated in words or communicated by conduct. There is no limitation to the way in which a representation must be expressed. It may be written or spoken or posted on a website.
For this section of the Act a representation may be regarded as made if it (or anything
Implying it) is submitted in any form to any system or device designed to receive, conveyor respond to communications (with or without human intervention).
The offence is complete as soon as the false representation is made, provided that it is made with a dishonest intent.
- A person stating that every resort which you visit with your membership will be 5 stars and luxury, intentionally misrepresents the facts to induce you into contracting with them in order to receive the maximum benefit. Most of the resorts are 2 / 3 stars at best.
- A person claiming that the management fees will not rise, intentionally misrepresents the limitations imposed by the resort regarding management fees. Rarely are the management fees fixed for the duration of the membership, if ever.
Fraud by Abuse of Position (Section 4):
A person is in breach of this section if they: –
• occupy a position, in which they are expected to safeguard, or not act against, the financial interests of another person,
• dishonestly abuses that position, or
• intends, by means of the abuse of that position: –
i) to make a gain for themselves or another, or
ii) to cause loss to another or to expose another to a risk of loss.
A person may be regarded as having abused his position even though his conduct consisted of an omission rather than an act.
“GAIN” AND “LOSS”
• Extend only to gain or loss in money or other property;
• Include any such gain or loss whether temporary or permanent;
And “property” means any property whether real or personal (including things in action and other intangible property).
“Gain” includes a gain by keeping what one has, as well as a gain by getting what one does not have.
“Loss” includes a loss by not getting what one might get, as well as a loss by parting with what one has.
Section 75 of the Consumer Protection Act:
The most important thing to come out of this complicated legal provision is that it allows someone who buys goods or services worth between £100- £30,000 (including timeshare outside the UK) with a credit card (or under a timeshare credit agreement) to claim damages for breach of contract or misrepresentation from the credit card company whose card they used to make the purchase as well as from the person who wronged you (and the credit card company may then chase the wrongdoer to be reimbursed the cost of compensating you). You can even use this section where you pay for the deposit on a timeshare with a credit card and the balance in some other way, as long as the total price of the goods or services is not over £30,000.
There are many advantages to this:
The credit card company will be in the UK, and will be able to be used in a County Court near you (or reported to the Financial Ombudsman Service, though in our experience the big stick of Court usually works better);
It will be traceable and solvent;
Whilst you still have to prove your case, it will not necessarily be well-placed to defend a claim as it will need the co-operation of the alleged wrongdoer, and the wrongdoer may not want to co-operate if there is a risk that the credit card company might turn on them instead; and as a large body not directly implicated in the wrongdoing it may be more inclined to take a commercial view and compromise a claim than the original wrongdoer (though many more claims brought directly against resorts and holiday clubs are compromised than the resorts would have you believe), especially in the small claims track where they might not be able to recover most of their legal costs even if they could defeat the claim. This section is normally used to recover compensation, but in cases of misrepresentation it can sometimes be used to cancel the contract as well.
SPANISH TIMESHARE LAW – LEY 8/2012:
Came into force on 17 March 2012
Right of withdrawal, prohibition of advance contracts for long-term holiday products and accessories;
Article 12 Right of withdrawal;
1. The contracts regulated in this Royal Decree, the consumer is entitled to withdraw without justification. In the absence of the provisions of this Royal Decree-Law, the right of withdrawal shall be governed by the revised text of the General Law for the Protection of Consumers and Users and other complementary laws, approved by Royal Legislative Decree 1/2007, of November 16.
2. The deadline for exercise is fourteen calendar days and shall begin: a) the date on which the agreement or any binding preliminary contract if at that time the consumer received the contract document or in another case, after the receipt of that document. b) If the employer has not completed and delivered to the consumer in the form of withdrawal under Article 11.4, the period shall run from the consumer to submit the withdrawal form duly completed and will expire in any event, within one year fourteen calendar days following the conclusion of the contract or binding preliminary contract or the subsequent receipt of contract document. c) If the employer had not provided the consumer pre-contractual information referred to in Article 9, including its forms, the period shall run from that provide such information and shall expire after three months and fourteen days following the conclusion of the contract or any binding preliminary contract if at that time the consumer received the contract document or in another case, the subsequent receipt of that document.
3. When the exchange contract is offered to the consumer, along with the timeshare contract for tourist use of property while it will apply to both contracts a single withdrawal period under the same rules of the preceding paragraphs.
4. The consumer shall notify the employer in a reliable way the withdrawal in writing on paper or another durable and can use the form provided in Annex V. The issuance or delivery of the notice shall be within the legal deadline and will be effective regardless of the date of receipt by the employer.
5. The right of withdrawal by the consumer will void the contract.
6. The consumer exercises the right of withdrawal shall not bear any cost or have to pay any consideration for the service which may have taken place prior to the date of exercise of withdrawal.
7. The provisions of this Article shall not prevent the exercise of the actions for annulment, legal or contractual decision to proceed according to law, in accordance with the provisions of Article 78 of the revised text of the General Law for the Protection of consumers and users and other complementary laws, approved by Royal Legislative Decree 1/2007 of 16 November.
Article 13-Ban on advance payments:
1. In contracts for timeshare on property for tourist use of long-term holiday product and exchange it prohibits the payment of advances, the creation of collateral, the cash reserve accounts, the explicit recognition of debt or any consideration to favour of the employer or a third party and by the consumer before the end of the withdrawal period.
2. The same prohibitions are established for resale contracts, before the sale has taken place or has terminated the contract in other ways.
3. The acts against this prohibition are void and the consumer may claim double the amounts paid or guaranteed by such concepts.
Specific provisions for contracts for long-term holiday products;
1. Payment of the contract price in long-term holiday products are made according to a schedule. It is forbidden for the price specified in the contract is paid in advance or otherwise not in accordance to the tiered payment plan.
2. The payments, including any membership fees, will be divided into annual instalments, all of the same amount.
3. The employer shall send a written request for payment, on paper or another durable medium, at least fourteen calendar days before each due date.
4. From the second term the consumer may terminate the contract without incurring any penalty by giving notice to the employer within fourteen calendar days from receipt of the request for payment of each instalment.
5. The provisions of this Article shall be without prejudice to any other rights provided by law to end the contract.
Cancelling your timeshare contracts properly takes a lot of legal, cross border cooperation.
Please do not hesitate to contact our office to discuss your particular case, we are more than happy to offer you some very good advice.