Holiday homebuyers urged to act now following Spanish Developer Collapse
4/12/2010British and Irish home buyers who fear they may lose out due to the insolvency of another Spanish developer have until the end of April to register as creditors with the Mercantile Court in Elche, Spain, says law firm DWF.
Promociones Eurohouse 2010 SL (Eurohouse), a company based in Orihuela, Alicante, sold hundreds of off-plan units to British and Irish purchasers and has been forced into a compulsory receivership by estate agent, Atlas International.
Eurohouse is more than 170 million euros in debt and its Fortuna Hill Nature and Residential Golf Resort remains uncompleted with more than 2,000 unfinished properties.
Antonio Guillen, a Spanish lawyer with DWF is advising British and Irish purchasers in the insolvency of several Spanish developers, said:
"The current directors will step down and the company will be run under the administration of two trustees appointed to manage its affairs."
Eurohouse has been placed in compulsory receivership which implies that the receivership procedure has started at the request of one of the creditors (in this case Atlas International). It also implies a potential personal liability for the company directors who could end up responding with their own assets.
He added: "Anyone who has purchased a property off-plan from Eurohouse or owns a property that has not been fully finished needs to register with the court before April 30th to ensure they are included in the final list of creditors. They will need to supply any documents that can help to prove the payments made, such as purchase contracts, payment orders and bank statements.
"They should also check whether they have been supplied with a bank guarantee. A bank guarantee is compulsory under Spanish law, although not all developers comply, and will ensure that if the property is not finished, a guarantor, usually a bank, will refund the money they have paid plus interest. It could mean the difference between losing all their money and getting a refund."
Purchasers should consult an insolvency lawyer who can ensure all the correct paperwork and procedures are in place to enable proper representation in the receivership procedure. Alternative solutions such as enforcing the bank guarantee where this has been provided can also be considered.
Antonio concluded: "Failure to register before the deadline could result in being downgraded to subordinated creditor status further jeopardising any possibility of getting any money back in the event of the company's liquidation."
ENDS
Notes to editors
Antonio Guillen is a dually qualified Spanish lawyer and English Solicitor at DWF LLP.
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