- August 24, 2006 at 5:20 pm #52158
Drakan (a lawyer who regularly contributes on the forum) posted very wise words below on another thread.
In case it got missed by the ‘newies’ to the forum (and the Spanish property purchase process), I feel it deserves re-posting on its own thread – as the Bank Guarantee issue has caused a lot of heartache to a lot of people.
It’s your lawyers duty to ask for it [Bank Guarantee] ALWAYS and it’s free and compulsory under law.
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 !!!!
Hope you don’t mind, Drakan 😉
- August 24, 2006 at 6:09 pm #65164
Yes completely agree
I have now been advised my are missing/ not available/ don’t have as I bought off an investor
Please get docs and BGs have translated into English also have contract translated
dont take anything at face value
if in doubt don’t sign
there is no pressure literally thousands of property for sale and there will be another
use a solicitor recommended one who has got bank guarantees and given correct advise
all said certainly think that things will have to get better as no one will buy with bad publicity
- August 24, 2006 at 7:38 pm #65165
Our developer is a very well-known one on the CDS with several prestigious developments under its belt. Yet have had two pm’s now re. hearing they are in financial trouble.
Not sure how much is simply because their building licences have got caught up in the recent investigations/CDS scandals going on – therefore no LFO’s, therefore no completed sales, therefore big cashflow problems – or whether it is the market generally.
Re. your Bank Guarantee, Karen – what happened to the original purchaser’s BG? – can’t it be re-issued by the developer in your name?
I thought a BG has to be in force on an off-plan until the final day of completion, regardless who is purchasing……as long as it is the name on the contract.
Is your contract with the developer – or with the person you bought from?
Would be interested to hear Drakan’s view on whether it is assumed you can not have a Bank Guarantee as you bought your off-plan from another purchaser.
- August 24, 2006 at 7:58 pm #65166
Last week I read on the newspaper that one developer had confessed to the magistrate in charge of Malaya Operation paying a backhander of three million euros (approx 2 million GBP) to obtain a licence (didn’t specify which type) by administrative silence from Juan Antonio Roca.
That just shows how important it is to developers obtaining those licences from the town halls so as to sell on their properties and not run into serious cashflow problems. After all they work with bank loans that finance the developments and are paying hefty interests until they sell every unit.
Regarding Karen’s case, it’s more or less irrelevant if she bought from someone else because before the developer she is the one that now appears in the private contract and she is entitled to those BGs providing the LFO hasn’t been issued yet. Even if you have to pay for a BG, which you shouldn’t under law they are free, it is worth every cent. You are completely exposed financially without them and your chances to recover your stage payments should the developer go broke would be very very dim.
- August 24, 2006 at 8:50 pm #65169
Drakan – you’re a gem 😉
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