F P A G
About Finca Parcs
About Las Higuericas,
About Cleyton GES SL
Finca Los Mazones &
Finca Expert SL
Caja de Ahorros del
CAM Bank Statement
Eye on Spain
The Shocking Truth
The Banks &
English & Spanish
BANK GUARANTEES IN SPAIN
It is a legal requirement
in Spain that the developer must provide a Bank
Guarantee or Insurance Certificate
to the purchaser covering ALL payments made in advance for the purchase
of a property.
The Bank Guarantee or Insurance Certificate must be issued immediately
the funds are received in
the developers Bank or Savings Bank account.
Being issued with a Bank Guarantee or Insurance Certificate is the
purchasers legal right and
although there are costs involved in setting up these guarantees
the developer must not make a
charge to the purchaser for the Bank Guarantee or Insurance Certificate.
Deposit funds paid in advance for a property must be held in a Bank or
Special Account (Cuenta Especial).
The Special Account must be separate from any other account held by the
developer and must
only contain funds to be used for the construction of the property.
Details of the Special Account together with the name of the Bank or Savings
Bank must be detailed
Sales Agreement / Purchase Contract.
All advertising and promotional material published by the developer that
refers to amounts being
paid in advance must state in which Bank or Savings Bank the deposits
will be held and give details
of the Special Account in which the funds will be secured and protected.
The Bank or Savings Bank must demand and ensure that the Bank Guarantee
Certificate is issued.
It is the responsibility of the Bank or Savings Bank who accepts the
to ensure that the
Special Account is
opened and the Bank or Savings Bank must either issue
Guarantee, demand that the
Bank Guarantee is issued or verify the
existence of a Bank Guarantee
or Certificate of Insurance to fully cover the off-plan deposit funds
The Bank or Savings Bank are the guardians of LEY 57/68. If the
Bank or Savings Bank
accept funds paid in advance by purchasers and fail to protect those
funds in a Special Account
or fail to verify that the Bank Guarantee or Insurance Certificate is
issued then they are guilty of
Gross Negligence and action may be taken against them for lack of
Professional Due Diligence
according to LEY 57/68 Article 1.2
A Bank Guarantee or Insurance Certificate must not have an expiry date
and does not have to
The Bank Guarantee or Insurance Certificate only expires when the
Certificate of Habitation
(Licence of First Occupation) is issued by the local Town Hall. At
this point the Bank Guarantee
is no longer valid and it is therefore in the purchasers interest to
complete the purchase as quickly
as possible after the issue of the LFO / COH.
If the construction does not commence or finish by the deadlines set
out in the Purchase
Contract then the purchaser has the right to execute the Bank Guarantee
or Insurance Certificate
and receive a full refund of the deposit together with the addition of
interest at the Legal rate
as detailed in the General Building Act 1999 LEY 38/99.
The Lawyer acting for the Purchaser has a duty to ensure the account to
which the deposit
funds are paid meets the strict requirements of LEY 57/68.
The Lawyer acting for the Purchaser has a duty to ensure that the
Purchaser's deposit funds
are only paid to the Developer's Special Account after details of the
Bank Guarantee or
Insurance Certificate have been confirmed by the developer and guarantor.
Once the funds are
transferred to the developers Special Account the Lawyer must make every
effort to obtain the
Bank Guarantee or Insurance Certificate.
If the Purchaser pays the property deposit to the Lawyer's client
account and the Lawyer
forwards those funds to the developer without securing the Bank
Guarantee / Insurance
Certificate and without establishing that the developers account to which they are
funds complies with the strict requirements of LEY 57/68 then the Lawyer may be
and guilty of acting with a lack of due diligence.
The Purchaser may then have a right to make a claim to the Lawyers Legal
for the loss of deposit.
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