Madrid Court Annuls Sale of 2,935 IVIMA Homes to Azora in 2013

25 May 2018 – El Mundo

Administrative Court number 29 of Madrid has annulled the sale by the Housing Institute of Madrid (‘el Instituto de la Vivienda de Madrid’ or IVIMA) of 32 housing developments, comprising 2,935 homes in total, to the investment fund Azora Gestión, which was completed in 2013.

According to the explanations provided in the court ruling, the award “does not comply with the law” and is not justified by any “supplementary report or analysis of a technical, economic, financial or legal nature”.

The ruling maintains that although the sale of the homes was justified by the statement that “they are not necessary”, no explanation or justification was provided for that claim, even though, according to the court, they fulfilled “a social function, specifically, to provide decent housing for the disadvantaged classes”.

The ruling “reveals that there was a lack of motivation or justification for the unnecessary nature of those promotions, as claimed by the plaintiff (…), to be able to authorise the sale of the assets, which were owned by the Public Administrations”, adds the ruling.

The almost 3,000 homes belonged to the Youth Plan of the Housing Institute of Madrid. They were sold for €201 million, almost 20% more than the established asking price (€168.9 million).

The annulment of this sale is included in the judgement in which the court considers the claim of a resident of Navalcarnero, through which the transfer of his rental contract with IVIMA to a vulture fund has been annulled, and regarding which the option to appeal exists.

The President of the Community of Madrid, Ángel Garrido, argued that the sale of the public homes to an investment fund (which has just been annulled by the judge) “was not a success” and he recalls that his Executive has committed “to never sell public housing to the investment funds”.

“Logically, the interpretation of the ruling lies with the legal services and they will inform us of the appropriate way to comply with it”, he said, before adding that these sales should have never taken place.

Original story: El Mundo (by Roberto Bécares)

Translation: Carmel Drake