The Article 1 of the 57/1968 Spanish Act states that any developer of homes must issue at no cost to the Purchaser a Bank Guarantee or a Certificate of Insurance for ALL deposit payments plus legal interest.  The Bank Guarantee may be executed by the purchaser if the construction does not commence or complete for any reason by the agreed deadline.

The article also states that funds paid in advance by purchasers must be credited into a Special Account held at a Bank or Savings Bank.  The Special Account must be separate from any other account held by the developer and must only contain funds deposited for the construction of dwellings. It is the responsibility of the Bank or Savings Bank to ensure that the Special Account is opened and must either issue the aforementioned Bank Guarantee themselves.

Last year the Court of First Instance number 54 from Madrid sentenced a Spanish Bank (La Caixa) to refund deposits to the purchaser in a case where funds were credited in an ordinary or "current" account and the developer failed in his obligations (property were not built by the time stated on contract and deposits weren't refunded).

The Judge sentenced that, given the bank´s involvement in lending the funds, they clearly knew that they were to be used to purchase a property in a development. The Judge also stated that the type of bank account used is only an accessory matter that, in this case, it could not be in the detriment of the buyer. Finally, the Judge indicated that La Caixa should have ensured that the bank account complied with the provisions of the 57/1968 Act.

This is not the first sentence about this matter, but shows an important trend  in Spanish Courts to give legal protection to buyers.