Conflicts with construction companies, developers and suppliers that charge very high amounts and then fail to execute the work, leave it half-finished or buy time with excuses, promises and documents that only serve to retain the client’s money are becoming increasingly frequent.
If you are reading this, you have very likely invested your savings in an off-plan property. It’s not just a house. It’s your life project. You hand over a significant amount to a company that appears to be reliable. But the work doesn’t start and all you receive are excuses.
Therefore, as a criminal defense attorney expert in fraud related to construction companies, I am going to explain when this type of situation stops being a simple breach of contract and can become a fraud offense.
When does a real estate developer’s breach of contract stop being a civil problem and become fraud?
Not every breach by a real estate developer constitutes a crime. This is the first point to understand.
Criminal Law does not punish the simple fact that a construction project is not finished or that a property is not delivered. For fraud to exist, something more is necessary: prior or concurrent deception that led the client to hand over their money.
When would we be facing fraud?
If the developer signs the contract and receives advance payments knowing they will not comply, we are facing a fraud offense. If, on the contrary, the project was real and viable and the problem arises later, we would be facing a civil breach of contract.
Have you been a victim of fraud by a real estate development company?
Do you need an attorney expert in property crimes?
When does a real estate developer commit fraud?
So you truly understand, let’s present real cases that have reached the Supreme Court
What happens when the developer collects payment and disappears?
In a Supreme Court ruling, a company contracted a service for more than €200,000. It made a first payment of more than €60,000 trusting that the project would be executed.
However, after receiving the money, the reality is very different:
- The service is never provided
- There is no justification for the destination of the amounts paid
- The person responsible stops responding to any communication
Faced with this scenario, the Supreme Court does not classify it as a simple contractual breach. What it recognizes is something much more serious: the absence of a genuine intention to comply from the beginning of the relationship.
When the contract is used solely as an instrument to generate trust and cause the delivery of money, the business stops being civil and enters fully into the criminal sphere.
The Supreme Court convicted him for fraud as it understood that there was never a real intention to comply from the beginning.
What if the developer appears solvent but it’s all a facade?
In other cases, the deception is not so evident at first.
The developer doesn’t disappear immediately. On the contrary. They build an appearance
Do you need an attorney specialized in real estate developer fraud?
What are the penalties for a developer who commits fraud?
The offense of fraud is punished, generally, with penalties of 6 months to 3 years imprisonment.
When the defrauded amount exceeds €50,000, the penalty can be increased to up to 6 years imprisonment.
However, in cases involving real estate developers, there is a particularly relevant nuance.
When the fraud involves housing, article 250 of the Criminal Code provides for a specific aggravation. And it makes complete sense: we are not talking about a simple economic transaction, but about access to housing, which is an essential good.
Therefore, from a technical perspective, in many of these cases we understand that the aggravating factor should be applied that the crime involves goods of primary necessity or recognized social utility.
This allows placing the penalty in the higher range, potentially reaching up to 6 years imprisonment, especially when high amounts and particular gravity in the conduct concur.
Advice if you have been a victim of fraud by a real estate developer
In this type of situation, acting quickly and with good judgment is essential.
As attorneys expert in real estate fraud, we advise you to consider the following:
- Don’t settle for just the developer’s explanations
Abogado penalista en Madrid (Graduado en Derecho y ADE con Máster de Acceso a la Abogacía), experto en procedimientos complejos y técnicos en Derecho Penal. Cuenta con títulos como el Curso de DerechoPenal Avanzado impartido por magistrados del Tribunal Supremo en el Iltre. Colegio de Abogacía de Madrid.