Since 1968, Spanish developers selling off plan properties must give to purchasers an individual bank guarantee to cover the whole deposit payment plus legal interest, which must be provided by registered banks or insurance companies.

To all deposits paid before January 2016, applicable law is 57/68 Act, which is a mandatory law that establishes that deposits must be held by developers into a bank account called "special". Banks must control that money's withdrawals from this account are just being used for building purposes, making sure that the individual bank guarantee it’s issued for all those buyers who made those payments. In addition, the Act declares that purchasers' right are unwaivable, which means that buyers are covered by this law although isn’t mentioned on purchase contract.

If the property is not built on the agreed completion time, buyers are entitled to cancel the purchase contract and enforce the bank guarantee. But if the individual bank guarantee wasn’t issued, buyers still can claim the refund to the bank where the builder deposited the money (depository bank), or even to the Insurance Company or Bank who committed with the developer to produce the individual bank guarantees for every buyer (generic bank guarantee).

For all deposits paid after January 2016, applicable Law is 20/2015, which includes several important differences:

- Just developers selling off plan properties WITH BUILDING PERMISSION already in place are compelled to deliver individual bank guarantees. If deposits were paid before the building permission was approved by the Council, the law isn’t applicable. Therefore, developers has no legal duty to cover deposits with bank guarantees, unless it's agreed by all the involved parties.

- Time limit to enforce Individual bank guarantees issued under the new regulation is TWO YEARS from the expected contract’s completion date. After two years from the aforementioned date, bank guarantee gets automatically cancelled. Please note that this is a limitation period, not a prescription period, so it can’t be interrupted.

Unfortunately, individual bank guarantees are not always given to purchasers, although the Bank is aware of the deposits' payment or even committed with the developer to provide individual bank guarantees. If this is the case and the property is not built yet, what happens them? If you are in this uncertain scenario, please CONTACT GM LEGAL EXPERTS asap.

Guadalupe Sánchez brings more than 15 years of experience handling high-stakes litigations about lost deposits & bank guarantees (please click here to learn more about the cases she has won, and click here to access the list of press reports where our law firm’s won cases are mentioned). Guadalupe would be delighted to assess FOR FREE the chances of winning your case:

+34 96 572 72 95


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