On the legal standing of second purchasers to claim against the developer for breach of contract

On June 22, 2022, the Supreme Court (1st Civil Chamber) inits Ruling No. 494/2022 of June 22, 2022, addressed an issue of great interest to those who are regularly involved in the real estate and construction sector.

Specifically, in the present decision, the High Court ruled on the legitimacy of the second purchasers -who do not acquire directly from the developer- to claim against the latter for the differences between the materials and qualities reflected in the specifications and those finally installed in the properties marketed.

In this case, both the Court of First Instance and the Provincial Court that heard the case dismissed the claim filed by the second purchasers, understanding in both cases that they lacked legal standing to claim such amounts against the developer.

In this sense, the Provincial Court of Cadiz
pronounced in its Judgment of April 15, 2014, in the following terms:

"[...Applying the aforementioned doctrine, which this court fully shares, it is only necessary to fully confirm the correct criterion of the judge a quo when she understands that in the present case the controversial issue affects the quality of the doors and closet fronts, which were indeed installed, but according to the plaintiff, not in accordance with the specifications, which does not affect the essence and integrity of the property or its use and habitability, but rather its improvement, there is no record of having agreed in the contracts of sale to third parties -post-delivery of the homes by the developer-, the assignment of actions against the developer for the differences in qualities initially agreed with the same and especially when the purchase prices by third parties were different from those of sale of the defendants, so that the exception must prosper [...]"...]".

These purchasers filed an appeal in cassation against this ruling, which was admitted for processing and subsequently resolved by the First Chamber of the Supreme Court.

After studying the circumstances of the case and the arguments of each party, on the basis of several rulings of the Supreme Court itself - Supreme Court Ruling No. 597/1997 of June 30 and Supreme Court Ruling 269/2011 of April11 - and the case law cited therein, the Chamber concludes that:

"From this jurisprudential doctrine it is clearly deduced in interpretation of art. 1257 of the Civil Code, that the appellants (as second purchasers of the dwellings) are entitled to claim in these proceedings, in defense of their rights, acquired derivatively based on the sale and purchase of the previous owners,who never waived their rights.

[...]

This Chamber must declare that the action brought to claim for the difference in the quality of the doors and cabinet fronts is of substantial importance in order to preserve the integrity of the property, inasmuch as the sellers manifestly failed to comply with the commitment acquired by virtue of the Building Specifications, a document that is an essential part of the sale, in such a way that articles 3 and 4 of RD 515/1988, of April 21, 1988, require that what was offered in advertising be respected and that the reference to the materials used be made available to the purchasers.

[...]

In conclusion, the appellants have standing to claim, even if they were second purchasers (arts. 1101, 1124 and 1257 of the Civil Code)".

Thus, it is confirmed that the second purchasers of a property bought off-plan are entitled to claim against the developer for breach of contract for failure to comply with the specifications.

With this, the Supreme Court reaffirms and confirms its doctrine in relation to the right of the second purchasers to claim against the developer under articles 1101, 1124 and 1257 of the Civil Code.

Taking into account the casuistry and operations in the real estate sector, the judgment cited and transcribed above is of special interest in that it provides legal certainty to all market operators, making even clearer the rights of second purchasers vis-à-vis developers.