Property buyers must already be informed in the down payment contract (contrato de arras) about illegal extensions to the property. If this clause is missing, buyers can cancel the contract and the seller is liable for double the amount of the deposit paid. This is the result of a new ruling by the Higher Regional Court in Palma de Mallorca.
In the present case, which dates back six years but has only now been decided, it was about a house in Cala Llombards near Santanyí in the southeast of Mallorca. The owners, a foreign couple, found a prospective buyer in January 2015. They agreed on a so-called "contrato de arras", a deposit contract that obliges the seller of a property not to sell the property to a third party. The buyer, on the other hand, must arrange financing within four months.
The crux of a down payment contract: If the buyer backs out, he loses his down payment. If the seller is in breach of contract, he must repay the buyer the double deposit paid.
Both parties agreed in the case of the property at Santanyí. The down payment was 41,500 euros. During the four-month period, the prospective buyer had an independent architect check whether the property had all the necessary licenses. This was not the case. A 30 square meter extension, a 74 square meter garage and a 58 square meter pool had been illegally built on the house. According to the current legal situation, subsequent legalization was not possible.
The interested party withdrew from the contract and demanded double the amount of the deposit paid. The owners refused, saying that they had communicated the matter in writing. The case eventually ended up in court.
The court ruled in favor of the plaintiff. It was not an incidental matter, it said in justification. The illegal constructions should definitely have been recorded in writing. In addition, it was stated in the down payment contract that the property had no defects under building law. The owners must now pay the prospective buyer 83,000 euros.
