Reply To: Recession and Bank Guarantees


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.