Bank Guarantee

[Anonymous]

Hi there,

Oh dear, it’s all going pear shaped for me and I wondered if someone could shed any light on the bank guarantee fiasco.

1. What is the difference between a bank guarantee from a bank and one from an insurance company?

2. Is the money covered by a ‘Bank Guarantee’ kept in a separate account from the developer?

3. Does anyone know any details about the construction industry insurance company ASEFA, i.e are they a big company? is there any possibility of them going bust?

I have exercised my bank guarantee due to non-delivery on time and thought that everything was going through OK with the courts upholding the guarantee and ordering that the original amount plus interest plus costs be paid.

I was then told that the money had not been paid and so the courts ruled that assets be seized to repay the money above, I have now learned that ASEFA have appealed against the ruling.

I thought that once the court had ruled that the bank guarantee is to be upheld that the defendant had 20 days in which to appeal, I didn’t think that they could appeal against the seizing of assets?

This has been going on since June 2008 and I thought I would have had my money repiad by now.

I would be grateful if anyone has any comment or thoughts on any of the above.

Thanks for looking

Harry

[Anonymous]

As far as im aware a bank guarantee and insurance policy are pretty much the same thing, only one comes from a bank and one from an insurance company.

They are there to protect your money if development does not complete.

In Spain you can oppose to anything even emabargos (seizing)

They need to have a very good reason or it will be thrown out.

[abolex]

Dear Harry

1. What is the difference between a bank guarantee from a bank and one from an insurance company?

Really the difference for the buyer is who provides the guarantee (a bank or an insurance company)

2. Is the money covered by a ‘Bank Guarantee’ kept in a separate account from the developer?

Should be, as stated in Law 57/1968, although this is not the case in most of the occasions

3. Does anyone know any details about the construction industry insurance company ASEFA, i.e are they a big company? is there any possibility of them going bust?

Of course there is a possibility although this is a big company

I have exercised my bank guarantee due to non-delivery on time and thought that everything was going through OK with the courts upholding the guarantee and ordering that the original amount plus interest plus costs be paid.

I was then told that the money had not been paid and so the courts ruled that assets be seized to repay the money above, I have now learned that ASEFA have appealed against the ruling.

I thought that once the court had ruled that the bank guarantee is to be upheld that the defendant had 20 days in which to appeal, I didn’t think that they could appeal against the seizing of assets?

This has been going on since June 2008 and I thought I would have had my money repiad by now.

I would be grateful if anyone has any comment or thoughts on any of the above.

Yes, as you have learnt, they can appeal against the Court charges, but at least you know that eventually you should be paid not only the main amount and the interest and charges but also (this is if it was included in your demand) a further interest of 20% as stated in article 20 of LCS (Ley del Contrato de Seguro – Law of Insurance Contract)

Thanks for looking

Regards
Martin

[Author]

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