Breach of delivery in the sale of homes
Can I terminate the contract if I do not deliver housing within the agreed time?
This is a case that has been occurring frequently, given the economic circumstances that is going through Spain: two people, challenged the legal, enter into a contract of sale of property that has not yet been finished building, and the seller agrees to deliver within a certain period. If that period elapses without deliver the property, Can the buyer defend the breach?
A similar course is the one that solves the First Chamber of the Supreme Court in its Judgment 4051/2016, of 14 September 2016, which it is the object of this resource. The factual background were the following:
Promociones Prau SA and Aguera Web Trust SL held on private purchase contract date 18/01/2007, whereby the first undertook to sell to the second one vivienda familiar (so construction) for a price 1.049.000 euros, more him 7% VAT.
The contract agreed, inter alia, the deadline for delivery of such housing would be the 30/11/2008, and that the buyer could not require delivery prior to that date or request termination of the contract when the seller has obtained the certification of completion of works before the day 30/10/2008. Also, it was established that, if the day 30/10/2008 the seller had not obtained the license of first occupation, automatically it is understood that deadline extended for three months, after which the selling party could again give three months or receive housing without first occupation license.
The final works certificate was issued on 27/04/2009, nearly six months after the deadline established in the contract. The first occupation license was obtained on day 02/07/2009.
The 02/04/2016, Aguera Web Trust SL required Promociones Prau SA had to terminate the purchase agreement 18/01/2007.
The 06/04/2009, 19 days before leaving certificate was issued works, Promociones Prau SA filed a lawsuit asking the court to order Aguera Web Trust SL (he had given account 253.000 €) to fulfill the entire contract.he understood, although the contract was established that housing was submitted before 30/11/2008, also it agreed to "grant longer terms for the event on that date could not finish the work of the house" (mistaking, as it is evident, the deadline for obtaining the license of first occupation, the deadline for the issuance of the final certificate of works).
Within 20 business days, Aguera Web Trust SL answered the lawsuit seeking its total rejection and, also, He brought a counterclaim seeking a declaration terminated the contract and Promociones Prau SA condemn the return of the amount paid in advance (253.000 €). He understood that the selling party had seriously breached the agreed period (ending the 30/11/2016 at least for the issuance of the final certificate of works), no circumstances that could justify.
The Court of First Instance No. 15 Madrid delivered judgment dated 07/09/2011 by which it dismissed the application for contract compliance and upheld the counterclaim requesting the resolution, understanding that
1) fact was not disputed the existence of delay in delivery of housing.
2) there was no doubt that the delivery deadline was 30/11/2008.
3) He had not shown that the lack of timely delivery was due to changes made by the purchaser.
4) He had not established that the buyer had shown according to the delay.
The Madrid Provincial Court delivered judgment on 06/02/2011 by confirming the judgment of first instance regarding the dismissal of the application, but also he dismissed the counterclaim, placing the parties in a situation of complete legal uncertainty. Such decision adopted on the understanding that, although there had been delay of almost six months, the delay was not sufficient cause to terminate the contract, because "the agreed deadline was not intended by the parties as essential".
Contra dicha Sentencia, the defendant reconveniente, Agüera Web Trust SL, appealed on the basis two reasons; first, for infringement of Article 1124 Civil Code; and the second, infringement of Articles 1088, 1089, 1091 and 1255 the Civil Code in conjunction with Article 1281.1 the same legal body.
The appellant alleges as the first plea, that the Provincial Court violates Article 1124 the Civil Code when deciding not appreciate the resolutoria relevance of missing the deadline for the delivery of housing, because the wording of the contractual provisions expressly established the essential character of the term, and because missing the deadline completely foiled the purpose of the contract for the buyer.
As for the second reason, entiende que la Audiencia Provincial vulneralos artículos 1088, 1089, 1091 and 1255 Código Civil en relación con el artículo 1281.1 the same legal body, because, not understanding terminated the contract, does not apply some provisions of the contract that specifically gave him the term essential character, and omits the obligational force of the agreement between the parties.
The First Chamber of the Supreme Court, in its Judgment 4051/2016, of 14 September 2016 resolves estimate the appeal, for the following reasons:
1) the parties agreed deadline for delivery 30/11/2008, and 30/10/2008 for the issuance of the final certificate of work (finally issued 27/04/2009);
2) he failed to show proper reason for the delay in delivery.
Ultimately, in case of Failure to comply with a deadline set with essential character, the party affected by such failure may exercise the action for rescission of the contract so that both parties are returned immediately in the situation prior to the event itself.