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Seller or buyer: who assumes the urban risk in a plot sale

The recent rulings issued by the First Chamber of the Spanish Supreme Court (SSTS 484/2022, of June 15th, and 488/2022, of June 21st, issued by the same magistrate) serve to confirm the importance of the causality of this acquisition contracts.

According to these resolutions, to determine if the purpose of the contract has been frustrated, the following must be determined:

(i) if the contract was caused or conditioned to the approval of the PGOU (General urban planning: which in Spain is the basic legal instrument to formulate municipal urban policies to be addressed throughout the municipal area) with a specific urban classification of the land,

(ii) if the contractual purpose has been definitively frustrated or if the urban vicissitudes are still compatible with said purpose, and

(iii) if that frustration, if any, is attributable to the buyer.

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