Well-known developer pays over €140,000 in compensation to a homeowners’ association in Madrid shortly after a lawsuit was filed.
A major nationwide developer (belonging to a business group with its own building contractor and various companies in other sectors) has reached a settlement agreement and paid our client, a homeowners’ association based in Madrid, just over €140,000 in compensation for the various construction defects and problems the association has been suffering since the building was completed and handed over by the developer.
Many breaches were identified (for which the developer-seller was responsible) of its obligation to hand over the homes and parking spaces in perfect condition. To list just a few, the following are worth noting: the narrowing of the garage entrance door, the difficult access to the semi-robotic parking spaces, water ingress in the garage itself, defective installation of the metal joinery in the homes, broken or loose floor tiles inside the homes, cracks in the partition walls, insufficient space to install the outdoor air-conditioning unit, noise from the extraction system… all of them breaches that make the homes and parking spaces unusable or unfit for the purpose for which they were bought, thereby giving rise to a breach of contract for which the developer-seller must answer.
Also worth highlighting is how new the building is: it was completed in February 2020, and a few months later the owners began buying their homes by executing the corresponding deeds of sale. Therefore, and this is important in legal terms, not even two years had passed since the homeowners’ association was set up and began operating when it decided to entrust the matter to a firm specialising in this type of claim (DPcon), in order to obtain a response from the developer by way of compensation. Unfortunately, the association’s previous attempts to settle the claim amicably with the developer on its own came to nothing, as they were systematically rejected by the developer-seller.
With matters at that point, the homeowners’ association contacted DPCON and decided to put its trust in the firm to bring its legitimate claim to a successful conclusion.
Now, just a few months after that first contact, and immediately after the lawsuit was filed, the homeowners’ association has received satisfactory compensation from the developer of around €143,000.
Clearly, such a quick and favourable resolution (in which the developer settles by paying almost everything claimed in the lawsuit) without having to go to trial, with all the time and uncertainty that involves, is always the preferred outcome, although it is not the most common.
Was it luck, or perhaps chance? Is this just a drop in the ocean in this type of legal dispute? The answer to all these questions is no.
In this case there were two very important keys that need to be borne in mind to understand why the claim succeeded so early:
1) The quality of the expert report prepared by DPCON. This report, written by one of the firm’s architects, was meticulous, complete, accurate and compelling. It did not leave out a single item of claimable damage, and it spared no technical explanation to support its arguments. The report also contains a detailed proposal for remedying each of the defects and a detailed estimated repair budget. Having a professional expert report, is a non-negotiable requirement for a claim to succeed.
2) The experience of the lawyers in our legal department in this type of case. DPCON has specialised in legal claims for latent defects and construction defects for 35 years. Its long track record of favourable judgments speaks for itself. We have often come up against the same developers or insurance company lawyers. In this case, probably influenced by this fact, the developer concerned preferred to avoid the greater risks of a trial, even at the cost of paying substantial compensation. As a result, just a few days after the lawsuit was filed, DPCON secured this compensation agreement, which is highly favourable to its client’s interests.
While it is true that such early resolutions of legal disputes are not the norm, nor can it be said that what happened to this residential development in Madrid is unlikely. Given the experience of DPCON’s lawyers and experts in these matters, it is not unusual for their court proceedings to end in a compensation agreement before trial.
In any event, in the words of one of the owners in the development: “We are very happy with the agreement reached. But the truth is that, ever since we put ourselves in DPCON’s hands, we were never afraid of going to trial. If we had not reached an agreement, we were confident and in professional hands to face the trial with every possible guarantee.”
Any questions?