Bank Guarantee

This topic contains 4 replies, has 4 voices, and was last updated by  Anonymous 9 years, 9 months ago.

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  • #55113


    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


  • #93575



    Sorry to read that things are going wrong for you. It’s a familiar story around here.

    I’ll do what I can to answer your questions.

    1. A bank guarantee is a contractual promise by a bank to refund your money in the event of certain conditions being met. It’s a way of insuring your stage payments. Another way is taking out an insurance policy. They are different in format, but the purpose is exactly the same.

    2. By law your payments should be kept in a special account separate from the developer’s ordinary business accounts. To the best of my knowledge, the developer is only allowed to use those funds to pay expenses directly related to the construction of the client’s property. Difficult to police.

    3. Never heard of ASEFA. But from their website it looks like they are a well established construction insurance company, with big multi-national parent companies in France.

    Hope you get there in the end.


  • #93583


    In, France the stage payments are requested via a notary. The developer will write to you along with a copy from the Notary confirming that he/she is satisfied that amounts demanded represents works that has been carried out.

    In Spain would you trust a confirmation letter from Notary ?????

  • #93604


    Hi Harry – I might be in the same position – I’ve sent you a pm.

  • #93606


    Mark, thanks for the reply that has cleared things up for me.


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