[Anonymous]

If Drakan (or anyone else who knows for sure) is still participating in the forum could you please advise:

What is the current legal interest for a bank guarantee?

The 54/1968 law talked about 6%. However, I have been informed that this is no longer the case! Can you please let me know the new law and what is the current interest rate?

Thanks

[Anonymous]

There was an addition to the law 54/1968 (which did state 6% legal interest),
This addition, made in 1999, changed that to legal interest now being the Bank rate of 4%.

So anybody sitting on a Bank Guarantee that says repayment plus legal interest, that legal interest is 4%.

[Anonymous]

Every year the BOE (Spain’s official Law Gazette) comes up with the official legal interests which are in force for that timeline.

It changes from year to year.

Drakan

[Anonymous]

The legal interest set by law by the Spanish Government for the year 2005 is 4%.

Regards and Happy Christmas

Jose María Sánchez Alfonso
Abogado / Lawyer
Málaga / Costa del Sol
jmsalfonso@inicia.es

[Anonymous]

a) Does anyone know what the legal rate was last year in 2004?

b) If one signed a contract in Summer 2003, but only managed to get the bank guarantee finally from the developer in May 2005, are we only going to get the interest from the date of the issue of the Guarantee.?

c)Whose pocket does the interest come out of (i.e. who pays us this legal interest) – the bank or the developer?

[Anonymous]

The legal interst for the year 2004 was 3,75 %, all amounts covered by the “aval bancario” have to be paid to you by the bank or the insurance company, the interests start counting when you start paying to the developer, obviously.

Regards

Jose Maria Sanchez Alfonso
Abogado / Lawyer
Málaga, Costa del Sol
jmsalfonso@inicia.es

[Anonymous]

Thank you for your reply, Jose……
and many thanks for all your help/advice to the forum during 2005.
Your (and Drakan’s) time and contributions so appreciated.
All best wishes for Christmas and 2006.
Sofia

[Anonymous]

It is my understanding that the rate of interest at the banks maybe as quoted above, but the developers have to pay us 6% interest as stated in our contracts, which were signed in 2003.

[Author]

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