Bank Guarantee

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    • #54557

      I would like some advice on what to do.
      The certificate of habitation has not been issued by the builder and it is 18 months overdue. I have asked my solicitor to use the bank guarantee to get my money back. He has requested 2900 euro upfront and then on a no win no fee basis 2% of the sum recovered. He said that there are two parts to this:
      1) resolve the contract with the builder
      2) legally chase the bank for the money
      The ‘no win no fee’ bit worries me. The guarantee is with CAM bank. Does this seem right and what are the chances of getting my money back?
      Thank you

    • #88506

      The fees seem very high. I’d get a second & third quote. If you need another lawyer, Mark has some names of Lawyers, depending on what region you are buying in.
      IF you win your money back under the BG, your lawyer should claim interest + all legal fees.

    • #88508

      Thanks Clare for your info.
      We are in the Murcia area – Costa Blanca.

    • #88515

      For simply applying to the bank to instigate payment on your Bank Guarantee, your lawyer just needs to send a burofax (registered letter).
      This is a minimal cost of under a hundred euros, therefore a request of 2,900 euros upfront is totally disproportionate.

      If the bank refuses on whatever grounds and you want to pursue this via the courts, then a discussion re. lawyer’s fees can be discussed.
      If you paid the total fee to your lawyer re. purchase, considering he hasn’t had to complete up to now – some kind of financial readjustment should be agreed (50%?).

      You should note that most recent cases re. pursuing the Banks to honour Bank Guarantees have failed, or at best won – then the bank appeals which not only stretches the case for years but often gets a judge that then overturns the original judgement. It has been shown that some judges are not making the right calls despite the law being very clear.

      Another point to consider: was your lawyer recommended by your agent? If so, there is a good chance the agent/lawyer/developer triangle is operating where they are only looking after their interests – not yours. Remember, these three professions have been feeding each other business for a long time.
      I know of cases where the lawyers presented flawed cases for the clients on purpose, tying the judges’ hands where he could only find for the developer.

      Not to depress you too much – some cases are won!
      It would help if you posted your development/developer, someone here may know of previous cases with info. as to how they went.

    • #88517


      just to agree with the very good advice from charlie and Claire. It can’t be stressed enough how important a good independant lawyer can be.
      I would try Lawbird amongst others.

    • #88518

      Thanks folks for all the sound advice.
      It sounds as if there is a mine field out there.
      50% of the total cost has been paid to the builder – Nava Saez
      and the development is Vista Azul in Villamartin.
      I opted to hire an independent lawyer from the start but I
      am not convinced that he has shown 100% in my interests.
      Some hard thinking about it all is now called for!
      Thanks again

    • #88519

      manus – I am sad to see that despite you asking the forum for advice back in September 2006 (before you went on your inspection trip), you ignored it and bowed to the pressure we warned you about and signed up regardless.

      I know saying this doesn’t help you at the moment, but perhaps it may be a warning to others re. inspection trips.

      Inspection Trips: Leave your cheque book at home!!!!!!
      Months of research should be undertaken before signing anything.

    • #88520

      Advice given and Manus’ response after inspection trip:
      (Potential Inspection Trip participants, please note…..)

      – too much pressure to buy (you have to be really hard-nosed to resist)
      – we must say that there was huge underlying pressure on us from day one to buy.
      YES we did commit to a 3000 euro deposit

      – you only see a limited amount of properties that they deal with
      – no chance to see ANYthing else, they collect you from the hotel and drop you back after a long day – and often the hotel they chose is remote!
      – We were housed up in a remote hotel – 40 miles from where we set our sights on and were unable to get a feel for the intended area.

      – don’t be fooled by the cheap tour price – they will get it back from you when they load on their huge commissions.
      – The most shocking revelation was that the agents take up to 18% in commission on any sale.

      Inspection Trips: Leave your cheque book at home
      Months of research should be undertaken before signing anything.

    • #88521

      I totally agree and what a fool I am!!!!
      As you say, if it gives others a better insight into what really goes
      on in Spain then all is not lost.
      Will mostly likely have to proceed with purchase
      Thanks again

    • #88524

      manus – please understand that my posts were purely to highlight problems to others who may be considering an Inspection Trip.

      I strongly suggest you take Claire’s advice and seek another lawyer’s opinion before proceeding any further.

      Going by your current lawyer’s enthusiasm for quoting all his fees at you at this early stage which is not appropriate until (and if) it reaches court stage, I would get advice on your situation with this particular development from another lawyer before going any further.
      You may be throwing good money after bad.

      Find out how many are sold for example – this could impact greatly on maintenance charges/future community problems.

    • #88526


      we were in a similar position to you, though you at least have a BG, so you have a better chance (in theory at least) of getting something back than us. Short of a small miracle, i will lose everything we put in to our fiasco, BUT!, if we had completed, the ongoing community charges, insurance, furniture etc, and the drop in prices, along with the contiuing reluctance of Spain to put it’s house in order, with regards justice and regulation, would have also meant a substantial loss, if we had needed to sell for whatever reason. And for how long?, what would the losses add up to over the next few years?
      Much to consider, that’s not nice to face up sometimes, but better now than later i feel.

    • #88527

      @manus1234 wrote:

      The certificate of habitation has not been issued by the builder….

      This certificate (Licence of First Occupation – LFO) by the way is not issued by the builder, it is issued by the local Town Hall.
      It is issued after their own building inspectors have inspected the development and are satisfied that
      a) everything has been built to a satisfactory standard/within all building regulations and
      b) the structure adheres to the building licence ……sneakily adding an extra floor here or there has been known.

      Without the LFO, the property is not deemed legally habitable yet in the eyes of the local council and to complete is at the new owner’s risk.
      Often, water and electricity are only on the builder’s supply until the LFO is issued, with utility companies including telephone co. requiring a LFO before connection, though exceptions have been known when it comes to large ‘powerful’ developers.

      If there is a delay in the Town Hall issuing the LFO it could be a) the development doesn’t fulfil one/some of these points or b) they are just too busy to send an inspector.

      It’s important for your lawyer to find out from the Town Hall what the reason for the delay is. Then double-check his answer!
      Better still, get a new (independantly recommended) lawyer to do this on your behalf. Shouldn’t cost a lot and will be money well spent.

      Just my opinion, good luck!

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