The TS punishes insurers in cases of real estate fraud

The High Court agrees with a cooperative that lost its savings in a failed promotion and condemns the insurer Asefa to compensate it with five million in the first ruling on the conflict.
Land in Valdebebas (Madrid) where the promotion of the sentence was going to be built.
The Supreme Court (TS) gives a boost to the housing cooperative members who lost their savings in phantom promotions and issues a first ruling in plenary session that lays the foundations for the rest of the thousands of affected people who have taken their case to court. The High Court considers that the insurer must compensate the members in the event of the unviability of the promotion and the insolvency of the cooperative.
This first case concerns 52 citizens of the Jardines de Valdebebas Cooperative, in Madrid. The majority of them had contributed around 100,000 euros and claimed from the insurer Asefa 5.06 million euros plus legal interest on the respective amounts from the date of their entry and from Asefa's knowledge of the incident. The Supreme Court has considered all these requests.
The ruling of the High Court considers that the surety insurance arranged between the insurance company and the cooperative, and whose beneficiary was the cooperative member, protected the latter because it was mandatory insurance in accordance with Law 57/1968 and the Law of Building Regulations of 1999.
The surety insurance contract documented in the global policy of November 22, 2007 described the type of risk as “surety insurance to guarantee the good outcome of the advances of the cooperative members of the 120 VRL+ 50 VPP urban development area Valdebebas US 4.01 ” (meaning “VRL” free-rent housing and “VPP” public protection housing).
Thus, “by good completion of the advances” we can only understand the purchase of the land, the beginning of the works, their completion and the delivery of the homes to the cooperative members, who according to the same contract were the insured, that is, the holders of the right to compensation, according to article 68 of the Insurance Contract Law, in case of breach of their legal or contractual obligations by the policyholder, that is, the cooperative.
Although in this case the individual insurance certificates say that they do not guarantee the successful completion of the housing development, the High Court explains that this fact is irrelevant since such certificates were drawn up unilaterally by the insurance entity, so "they could not alter the bilateral contract, documented in the policy, nor, even less obviously, limit, contrary to the principle included in article 3 of the Insurance Contract Law, the rights of the insured. That is to say, this section lacks contractual effectiveness.
Finally, the Supreme Court affirms that the right to decent housing and the obligation of the State to guarantee the defense of citizens enshrined in articles 47 and 51 of the Constitution would be diluted if the administrative regulations on urban planning certificates and provisional qualification prevailed over the increasingly reinforced consumer and user protection standards.
The ruling grants more compensation than the first instance ruling, since it understands that the insurance referred to in the first additional provision of the Building Planning Law does not exclude the application of the interests of article 20 of the Insurance Contract Law. for having different areas.
The Provincial Court of Madrid was issuing contradictory sentences depending on the Section that decided, in which, in some cases they understood, as the Supreme Court has now done, that the insurance company should be ordered to return to the cooperative member their contributions plus interest. , while in others, on the contrary, it was considered that the surety insurance did not cover the cooperative member in those terms.
The Supreme Court now clarifies the issue and it is to be expected that the Courts of 1st Instance that have yet to issue a ruling in the many procedures that are being processed and the Provincial Courts that have appeals also pending will begin to resolve them following the interpretation given here .
In the Community of Madrid there are claims against Asefa and HCC (the only two insurance companies that signed these insurance policies) for several hundred million euros (between 200 and 300 million, according to sources close to those affected) and possibly after knowing this ruling Thousands of cooperative members who had not yet claimed do so now, so resources for 400 or 500 million euros more could be raised.
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