Controversial points in claims for construction defects

construction defects

Both deadlines, like the existence of res judicata, the principle of congruence, the compensation CPI and VAT are controversial issues in claims for construction defects

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In this entry we review some of these controversial issues in light of the judgment of the Section 2 of the Audiencia Provincial de Burgos, of 13 March 2020, with No Resolution 124/2020. It contained the following pronouncements:

  • He condemned D. Federico and CÉSAR MORCILLO, S.L., to pay the plaintiff the amount of 124.021,68 € (más el IVA correspondiente), to which the legal interest of the money increased by two points from the date of this resolution will be applied.
  • He condemned FERROVIAL AGROMAN, S.A. to be paid to the SOCIEDAD COOPERATIVA DE VIVIENDAS QUINTA DE CARDEÑA and 198 plus, 1.995.287,06€ (más el IVA correspondiente), to which the legal interest of the money increased by two points from the date of this resolution will be applied, for the constructive defects that were imputed to him in the first instance.
  • He condemned FERROVIAL AGROMAN, S.A., turn out 14.456,70 € (plus VAT) due to the inability of the garages and execution defects for each of the homes, as well as 3000 € to each owner as compensation for moral damages, plus the legal interest of the money increased by two points from the date of this resolution.
  • He did not expressly condemn Dña. Otila and D. Victor Manuel.

Fact background,,es,Juan Alberto and Paulina filed suit against FTA,,es,Asset Securitization Fund,,es,requesting the declaration of nullity for abusive of the floor and ceiling clauses contained in the novation contract of the mortgage loan of,,es,with the corresponding refund of amounts unduly collected,,es,The Securitization Fund Management Company,,es,Beech,,es,acting on behalf of FTA, he responded to said claim alleging that he lacked passive legitimacy since the entity had no legal personality and that it constituted only a private and open fund and that therefore the passive legitimization corresponded to BBVA as successor of Catalunya Banc that was the Company fund constituent,,es

By CÉSAR MORCILLO, S.L. and FERROVIAL AGROMAN, S.L., a series of houses was built, called “Quinta de Cardeña Promotion”. Of said construction, a series of construction defects.

Primera Instancia

THE QUINTA DE CARDEÑA HOUSING COOPERATIVE SOCIETY, formerly called FIFTH PROMOTION OF CARDEÑA OF THE LIMITED HOUSE COOPERATIVE SOCIETY, filed suit in claim of amount for defects and constructive defects, against FERROVIAL AGROMAN, S.L., CESAR MORCILLO, S.L., D. Federico, D. Víctor Manuel y Dña. Otilia.

The Court of First Instance No. 2 de Burgos sentenced the 8 January 2019, partially estimating demand.

  • He condemned D. Federico and CESAR MORCILLO, S.L., to pay the plaintiff the amount of 214.969,26 € (más el IVA correspondiente), to which the legal interest of the money increased by two points from the date of the resolution would apply.
  • Convicted FERROVIAL AGROMÁN, S.A., to pay the plaintiff:
    • due to construction defects, the amount of 2.031.704,52 € (más el IVA correspondiente), to which the legal interest of the money increased by two points from the date of said resolution would apply;
    • and due to the inability of the garages and execution defects affecting materials and compaction of the land of two of the homes, the amount of 14.456,70 € (plus VAT) for each of them; and the sum of 3.000 € as compensation for moral damage to each owner. In both cases, plus the legal interest of the money increased by two points from the date of this resolution.
  • He did not condemn Dña. Otilia and D. Victor Manuel.

Provincial Court

Three appeals were filed:

  • For D. Federico and CÉSAR MORCILLO, S.L.
  • By FERROVIAL AGROMAN, S.A.
  • By QUINTA DE CARDEÑA HOUSING COOPERATIVE SOCIETY and 198 plus.

In D's appeal. Federico and CÉSAR MORCILLO, S.L. the existence of res judicata and violation of the principle of consistency.

Cosa juzgada

Regarding res judicata, se desestimó dicha alegación porque la causa de pedir en los otros procesos alegados era distinta y la Cooperativa no conocía el defecto ahora reclamado.

Violation of the principle of congruence

The reason for violation of the principle of consistency having condemned them for pathologies or defects of which they had not been claimed. The plaintiff had acknowledged in its appeal brief, extra small incongruity in the first instance sentence.

The provoked intervention

Regarding the appeal of FERROVIAL AGROMAN, S.A., It was requested that the declaration of the judgment of the first instance in which it exonerated them of responsibility be revoked. Ferrovial asked to exclude the mention that indicated ni declaración formal de responsabilidad“.

For the Board, cuando se acuerda la intervention by a third party under article 14 LEC, only acquires the quality of the defendant if the actor decides to direct the lawsuit against him (STS 26 September 2012).  In this case, los arquitectos técnicos fueron llamados al proceso pero no se formuló por la parte actora pretensión de condena frente a ellos. Al no ejercitarse acción frente a ellos, nor to claim for its part prescription of the action, it cannot be analyzed: The judgment of the first instance should not have been pronounced in this regard and the reason alleged by Ferrovial is upheld.. The ruling in this regard was suppressed from the ruling.

Importes no empleados en la reparación e IPC

The request for the reduction of the compensation amount was also upheld: The plaintiff, I had charged 678.367 euros between November 2007 and January 2010 in execution of guarantees by Ferrovial. And those amounts, instead of going to repair defects, they were invested in financial assets. The room understands that it is not possible to update the amounts of the compensation with the CPI because an unjust enrichment by the plaintiff would be taking place and that the legal interest of those must be subtracted 678.367 euros that were collected from the guarantees and that were not used to carry out the repairs but rather in financial assets.

VAT on compensation

The Chamber clarified that the compensation, to be complete, includes both overhead, such as industrial profit and VAT. And if over time there is a variation in the types, debe aplicarse el porcentaje a la fecha de fijación de la indemnización en la sentencia de la primera instancia.

Last, of the appeal filed by SOCIEDAD COOPERATIVA DE VIVIENDAS QUINTA DE CARDEÑA and 198 plus, the Section considered the petition for the conviction of FERROVIAL AGROMAN, S.A. to pay to the Cooperative the repairs made and paid by the Promotion for defects in work, in 97.538,27 €.

Conclusion

Those involved in a work are responsible for the birth of damage and defects in its construction, en los plazos reglados, being dies a quo the date of receipt of the work or correction thereof. The term will be 10 years in the case of damage caused by defects in the construction of the building and directly affecting its structural stability;  3 años si los daños o defectos afectan a las condiciones de habitabilidad o de 1 year, if the defects refer to the finish of the works. There are many questions that arise in this type of procedure, so the advice of a construction defects lawyer.

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