Bank Guarantee – no use in case of "paperwork delays&qu

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This topic contains 27 replies, has 9 voices, and was last updated by Profile photo of Anonymous Anonymous 10 years, 2 months ago.

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  • #52120
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    Anonymous
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    Following response from our lawyer, in relation to why he is not worried that we do not have a bank guarantee – and we only found out after three years! Three years since signing contract and nothing to show. Community is built but ongoing planning issues it seems.



    1) The builder provides the ban guarantee once the payment is settled and not before

    2) The bank gurantee also covers the construction of the property, avoiding that the builders flees away without building the properties when you buy offplan. In this particular case the builder did build and finish the properties, being the main problem a documentary problem with the Junta de Andalucia.



    In relation to excuse 1) – should the lawyer not have insisted a condition of the original contract be, that the builder must provide the BG??

    In relation to excuse 2) – is it really true that the BG is only of use when the builder fails to physically build the project, as opposed to not having the right paperwork to allow it be handed over legally? I find this hard to believe and it would seem to defeat the purpose of a BG in many cases??

    Any thoughts much appreciated!

    Thanks.

  • #64771
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    Anonymous
    Participant

    I think your lawyer needs to retake his law course.

  • #64625
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    Anonymous
    Participant

    I think your lawyer needs to retake his law course.

  • #64775
    Profile photo of Anonymous
    Anonymous
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    That’s assuming that he ever took one. Hard to believe given the evidence above.

    Everything your lawyer has told you is cobblers.

    Mark

  • #64627
    Profile photo of Anonymous
    Anonymous
    Participant

    That’s assuming that he ever took one. Hard to believe given the evidence above.

    Everything your lawyer has told you is cobblers.

    Mark

  • #64779
    Profile photo of Anonymous
    Anonymous
    Participant

    More of a constructive answer now:

    A Bank Guarantee is issued by the developer, free of charge, usually within a month of paying your initial payment – in your case, three years ago.
    Issuing you a Bank Guarantee is obligatory by law.
    Your money is paid into the developer’s bank, held in a special account, and the bank issues you a BG in your name re. the amounts paid.
    Failure to issue you with a BG as per Spanish law is a criminal offence (as far as the developer is concerned), and failure to obtain one by your lawyer is gross derelict of duty re. failure to protect your interests.

    quote:
    2) The bank gurantee also covers the construction of the property, avoiding that the builders flees away without building the properties when you buy offplan. In this particular case the builder did build…..

    Well wasn’t your lawyer ‘lucky’……and what if your developer had fled? Bit late to try and get you a BG then.
    His logic is totally beyond me.

    Can your lawyer grant you some ‘adult attitiude’, and explain to you what this ‘documentary problem’ with the Junta is?
    In this day and age in Andalucia, a ‘documentary problem’ with the Junta could mean anything from a building licence obtained through bribery (hence will be deemed illegal), a property sitting on land that shouldn’t have been built on according to the Junta’s PGOU plan, and/or inabilitly to obtain a Licence of First Occupation for any or all the previous examples.

    Strongly suggest you change lawyers to one who will look after this very expensive investment of yours, and one who knows what he is talking about.
    Already, by not obtaining you a BG, and for writing such c**p, he should be reported to the Colegio de Abogados…..
    (in my opinion…..)

    Barbara

  • #64629
    Profile photo of Anonymous
    Anonymous
    Participant

    More of a constructive answer now:

    A Bank Guarantee is issued by the developer, free of charge, usually within a month of paying your initial payment – in your case, three years ago.
    Issuing you a Bank Guarantee is obligatory by law.
    Your money is paid into the developer’s bank, held in a special account, and the bank issues you a BG in your name re. the amounts paid.
    Failure to issue you with a BG as per Spanish law is a criminal offence (as far as the developer is concerned), and failure to obtain one by your lawyer is gross derelict of duty re. failure to protect your interests.

    quote:
    2) The bank gurantee also covers the construction of the property, avoiding that the builders flees away without building the properties when you buy offplan. In this particular case the builder did build…..

    Well wasn’t your lawyer ‘lucky’……and what if your developer had fled? Bit late to try and get you a BG then.
    His logic is totally beyond me.

    Can your lawyer grant you some ‘adult attitiude’, and explain to you what this ‘documentary problem’ with the Junta is?
    In this day and age in Andalucia, a ‘documentary problem’ with the Junta could mean anything from a building licence obtained through bribery (hence will be deemed illegal), a property sitting on land that shouldn’t have been built on according to the Junta’s PGOU plan, and/or inabilitly to obtain a Licence of First Occupation for any or all the previous examples.

    Strongly suggest you change lawyers to one who will look after this very expensive investment of yours, and one who knows what he is talking about.
    Already, by not obtaining you a BG, and for writing such c**p, he should be reported to the Colegio de Abogados…..
    (in my opinion…..)

    Barbara

  • #64781
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    Anonymous
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    “More of a constructive answer now” refers to my first post, Mark. Not yours 😆

  • #64630
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    Anonymous
    Participant

    “More of a constructive answer now” refers to my first post, Mark. Not yours 😆

  • #64783
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    Anonymous
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    Appreciate all the responses – makes me more comfortable sending the reply I had already drafted. And in parallel already have sent a request to one of the solictors recommended on this site as an independent lawyer, to try to make some progress.

  • #64631
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    Appreciate all the responses – makes me more comfortable sending the reply I had already drafted. And in parallel already have sent a request to one of the solictors recommended on this site as an independent lawyer, to try to make some progress.

  • #65092
    Profile photo of mariadecastro
    mariadecastro
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  • #65101
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    Anonymous
    Participant

    Thanks.

    Does the builder have to always offer the bank guarantee for any off plan development? Our solicitor is saying we should have asked for it … we did not ask, so he did not request … so not included in the contract, now we are left sitting …

  • #65108
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    Anonymous
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    dermo99 wrote:
    Thanks.

    Does the builder have to always offer the bank guarantee for any off plan development?
    He is obliged BY LAW to give you one (yes, even without being asked to) -it is a ‘criminal offense’ not to give you one.

    Our solicitor is saying we should have asked for it …
    That is ‘bull’. It was your solicitor’s job/responsibility to ensure you got one – it is the only way your money is protected.

    we did not ask, so he did not request … so not included in the contract, now we are left sitting …[/quote]

    It is irrelevant if it is not mentioned in your contract. No contract is above the law.
    Your lawyer is trying now to cover his ‘bottom’ (am keeping it polite, Mark 😀 ) by putting the onus on you, and blaming you for not having asked for one.

    He can be (rightfully) reported to the Colegio de Abogados for derelict of duty.

    You
    must find yourself a new lawyer in my opinion, because you are going nowhere with this one. And any fees paid to him upfront should be returned under threat of reporting him.
    HE IS NOT LOOKING AFTER YOUR INTERESTS AT ALL – AND IS FOBBING YOU OFF WITH TOTAL COBBLERS (to quote Mark).

    Barbara

  • #65117
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    Anonymous
    Participant

    Thanks – as noted in PM, we have a message outstanding with one of the independent solictors as recommended on this site, waiting for return from holidays.

  • #65128
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    Anonymous
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    Having read Drakan’s advice on Bank Guarantees (thanks Drakan).

    Decided to investigate mine which is in Spanish.

    Purchased from Ocean View Properties at Manilva Beach 200,000 euros of which to date 94,000 euros has been paid (including all 14,000 euros IVA).

    My copy of the Bank Gurantee has no mention of my names, apartment number purchased or monies paid.

    The only names, companies on the Bank Guarantee are

    Cajamar Bank

    Jet Plus Oil SL Developer

    Ocean View Properties SL Agents

    It appears that the Bank Guarantee covers the whole of the urbanisation all 132 apartments. Without any itemisation of individual purchasers.

    Is this normal practice.

  • #65134
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    Anonymous
    Participant

    I suggest, as our uk solicitor did, that you contact the bank that is named on your guarantee and ask if they have a record of a guarantee in your name and ask them to respond in writing or by email.
    Even though we had a contract that stated a guarantee was in place and with reassurance from our Spanish lawyers that we were covered, no such guarantee existed. It took one phone call by our uk solicitor (fluent in Spanish) to find this out.
    Jon

  • #65135
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    Anonymous
    Participant

    Hi Edgecliff,

    No way is it normal practice you should have yours as I posted. You’re not guaranteed (=your stage payments) at all from what you’ve posted. You’re at the edge of a cliff … From what you post, it’s Ocean View Properties who are ensured/guaranteed, not yourself.

    Hi Dermo 99,

    You’re solicitor is a jerk. How are you supossed to know that a BG exists ? It’s your lawyers duty to ask for it ALWAYS and it’s free and compulsory under law. Your lawyer is either very lazy or in cahoots with the developer.

    People, a recession is creeping in, Developers always go broke in recessions and BGs are what guarantee your stage payments. No BG, no guarantees on your stage payments.

    DEMAND THOSE BGs, have a copy yourselfs and accept no less, don’t take the word of your lawyers, demand to have it faxed over to you, it is much too important !!!!

  • #65136
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    Anonymous
    Participant

    Thanks Drakan and others.
    Unfortunately I did not have the foresight to come across forums like this before I engaged in the Spanish property market, only after – but I am certainly making clear to anyone else I talk to, of the pitfalls we have encountered through accepting people on good faith.

    Regards,

    Dermot – now a lot more cynical …

  • #65324
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    Anonymous
    Participant

    Re Drakan’s response to Edgecliff, can action be taken against lawyer where the bank guarantee does not include individual purchasers?

    Barney

  • #65325
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    Anonymous
    Participant

    It is very strange. If what Edgecliff has posted is right, he is not included in the BG.

    What I fail to understand is why the REA (Ocean Views) are protected by the BG.

    Certainly the lawyer hasn’t done his job properly. What’s the use of a BG that doesn’t insure the purchaser ? This is the first time I’ve heard of something like this.

  • #65373
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Drakan

    Can confirm the Bank Guarantee I have names only the developer Jet Plus Oil SL and the agents Ocean View Properties.
    My names, apartment and monies paid are not specifically mentioned.

    Solicilors response to me as follows

    The Bank Guarantee issued on your development does secure the clients position in the event that the developer goes bankrupt.
    There is no legal requirement for an individual Bank Guarantee to be issued for each purchaser.This is an option. However, this would be at a cost to the purchaser (several thousand euros.

    More advice please.

    Thanks Drakan

    Thanks Barbara.

  • #65375
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    Anonymous
    Participant

    @edgecliff wrote:

    Hi Drakan

    My names, apartment and monies paid are not specifically mentioned.

    Solicilors response to me as follows

    The Bank Guarantee issued on your development does secure the clients position in the event that the developer goes bankrupt.
    .

    And just exactly how are you protected, may I ask ?

    Is your name, surname, passport number on that BG ?


    No
    Are your stage payments mentioned in that BG ?


    No

    Ahhh, albeit Ocean View Properties are protected, the REA…just brilliant ! Well blimey that really makes me feel safer, doesn’t it ? Phew ! 🙄

    Do you mind PM me who your law firm is and specifically the name of your lawyer ?

    I’ll repeat it only once more: you are N-O-T ensured no matter what your lawyer is telling you, “¿ comprendes amigo ?” Use your logic, please. Is it Ocean View Properties who are paying all the stage payments or is it you ?

    Incidentally, weren’t those the REAs that “allegedly”another member in another thread claimed that were asking for ALL the purchase VAT upfront ? ( legal disclaimer: This is not my personal opinion nor am I claiming this is a fact, I’m just pointing out what someone else has posted in another thread in this website.)

    linK:

    http://www.spanishpropertyinsight.com/forums/viewtopic.php?t=1246&start=0

    Just who appears as the purchaser in the purchase contract (exchanges): Ocean View or yourself ? FGS !!

    Sometimes I’m at a loss with you British. Look, you really don’t need a Spanish lawyer to tell you that is incorrect, it is only blatant.

    The BG should be under your name, surname, passport number, mention the money guaranteed, the property you are purchasing etc… it’s you who is paying, no ? It’s free and there is no extra cost of thousands of euros, that’s just cheap talking of your “lawyer”.

    I suggest you keep ALL written email/fax from your lawyer as future evidence. I would seriously confront him and mention that you are willing to take this case to the Bar Council of where ever that lawyer is registered in.

    I can say it louder but not clearer: YOU ARE EXPOSED IN THE EVENT OF THE DEVELOPER DEFAULTING.

    Please don’t ask this question again, it really gets on my nerves.

    Or you either confront them challenging them that you’ll take this case to the Bar Association if they don’t provide you with a proper BG as stated under Law 57/68 or else change lawyers, and this time round find yourself one that is truly independant. Ask Mark, forum administrator, for recommended lawyers.

  • #65403
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    Anonymous
    Participant

    Drakan

    I can now take the necessary action. Sorry to have been pedantic.

    Yes these are the agents that have received all the IVA upfront.

    I am sending you a PM as requested with the name of the law firm and the name of the lawyer.

    Thank you.

  • #65411
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    Anonymous
    Participant

    I apologise Edgecliff if I’ve been somewhat harsh but a recession is about to hit the global real estate market with ever increasing interest rates and those purchasers caught without a BG will be in very deep trouble. I have seen it before.

    Read these links regarding how house prices are actually falling in the US:

    http://money.uk.msn.com/Investing/Insight/Special_Features/Moneyweek/article.aspx?cp-documentid=856854

    http://www.dailymail.co.uk/pages/dmstandard/frame.html?in_bottom=http:%2F%2Fwww.thisismoney.co.uk%2Fnews%2Findex.html%3Fin_page_id%3D2&in_page_id=1804

    In spanish we have a wise saying that goes:

    “cuando las barbas de tu vecino veas cortar pon las tuyas a remojar”

    Which more or less means that when you see something bad happenning to your neighbour, be ready because you are next in line.

  • #65768
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    Anonymous
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    Just registerd three years too late. Sorry if I am going over old ground or if my questions appear stupid!
    Q1.What does a BG cover – is it for the completion of the building itself or completion of the complex – the services of which were reflected in the price of the building. Told at outset we would have a BG as it was required by law – hence reason we paid over 50% deposit. Now being forced to complete immediately albeit 12 months overdue because lawyers and agent saying builder is “in economical difficulties” and property is finished but with none of the “elite resort” facilities . Now told there was no BG cos we did not ask for it and anyway the building is finished.
    Q2 As we cannot get over immediately are we mad to give the lawyers a power of Attorney to complete for us even though we feel they are only intersted in the builder? Everything I have read tells me that I am mad to grant this but I am scared of losing my Euro 90k. Have sent e-mail to another lawyer from list on this website for advice but I cannot believe what is being said about the lawyers. Am I jumping from the frying pan into the fire? Who do I trust?
    Q3. I keep reading here about an LFO. What is an LFO? Who gets it? We have been told that the property is on the builders electricity and water – I gather that this is not good. Any thoughts much appreciated – we are desperate!

  • #65771
    Profile photo of Anonymous
    Anonymous
    Participant

    Q1.What does a BG cover – is it for the completion of the building itself or completion of the complex – the services of which were reflected in the price of the building. Told at outset we would have a BG as it was required by law – hence reason we paid over 50% deposit. Now being forced to complete immediately albeit 12 months overdue because lawyers and agent saying builder is “in economical difficulties” and property is finished but with none of the “elite resort” facilities . Now told there was no BG cos we did not ask for it and anyway the building is finished.

    The BG covers your payments if the developer defaults before completion.
    ( Definition of completion may depend on your contract but should only be after grant of LFO).
    The developer must provide a guarantee but in Spain this law is frequently ignored. Some lawyers seem to think this is a normal state of affairs and regard their responsibility in the matter as of little or no consequence.

    Q2 As we cannot get over immediately are we mad to give the lawyers a power of Attorney to complete for us even though we feel they are only intersted in the builder? Everything I have read tells me that I am mad to grant this but I am scared of losing my Euro 90k. Have sent e-mail to another lawyer from list on this website for advice but I cannot believe what is being said about the lawyers. Am I jumping from the frying pan into the fire? Who do I trust?

    Only give your lawyer powers if YOU are confident that you have been given all the information to enable you to make the decision.

    Q3. I keep reading here about an LFO. What is an LFO? Who gets it? We have been told that the property is on the builders electricity and water – I gather that this is not good. Any thoughts much appreciated – we are desperate!

    LFO is the License of First Occupation. This is applied for by the developer and has to be granted by the local authority BEFORE you can get your own connections for water and electricity. It is a license saying, amongst other things, that the property is fit for human occupation.

    Please research all the postings about guarantees, completion problems and try to make your Spanish lawyer respond.

    Good luck, because from my experience, you will need it.

  • #65775
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    Anonymous
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    HPMD,

    All your queries have been replied before by lawyers. Browse through the threads.

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