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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
Do you know anything about UK bank guarantee?
I am dealing with an investment company in the UK which claims to provide bank guarantee. I am looking for a lawyer to help me with the process and verify if it is legit.
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Dear Sir,
I'm sorry, we would only know about Spanish bank guarantees.
I suggest you hire a local UK solicitor to asses the legitimacy of the said BG.
Regards,
Raymundo LarraĆ*n Nesbitt
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Regarding those who do not have a BG; on another thread it was stated that 'Developers can be fined up to 25% penalty of the amounts they should have guaranteed'.
I was wondering how rigorously this is enforced? Is this up to the Judge presiding over a particular case, or up to a prosecuting lawyer to try & get this Fine enforced?
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
Dear Suzanne,
It's up to your lawyer to pursue this penalty if his client wishes so.
However, we stress this is not a means to recover your deposits only to impose a punishment on the developer whose failed to comply with Law 57/68. That's why many people choose not to follow it because it doesn't really help them.
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
I have a bank guarantee it has an expiry date upon it. But this was only the 30th of Sept 2008, this was also the completeion date for the property. The developer has staed his intention not to proceed with the property. How do i go about getting my 30% deposit back.
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Date of execution of bank guarantees
Hello Stephen,
Bank guarantees can be executed, in principle, even if the expiry date has already been met. The reason is that Courts (and some banks) are considering that the applicable laws in this matter (57/1968 and 38/1999 Acts) prescribe that guarantees will be valid until the license of first occupation has been obtained, which in this case has not happened from what you say. I suggest that you try to execute the document withthe bank and if they refuse you take legal action, via the Courts.
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
Hi, I am in a situation whereby I have bank gurantees by Caja EspaƱa however one of them is a copy and they are stalling because of this. My lawyer says this is just a stallig tactic and they cannot refuse payment. Is this correct? Are Caja EspaƱa a reputable bank?
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
My lawyer failed to obtain the original bank guarantee document though he did get a copy of it from the bank. He says the copy may not count and that only the original counts. Is this true?
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
POST EDITED as per the real Mrs Robinson request.
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
I have purchased an off plan apartment in Mojacar. The original contract was signed without a bank guarantee. I am now being asked to sign a new contract incorporating a parking space(not in the original price/contract) as the developer is claiming this is part of the planning requirement. Could this be true or could it be a way of raising more finance and selling the parking spots. If I sign the new contract presumably I should demand a bank guarantee prior to doing so.
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B Guarantees
Hello Malcolm,
A copy is not good to demand payment either a the banks premises or via the Courts but what you could do is request request from the Judge that the bank provides with an original, considering that these documents all have a serial number, and subsequently but simultaneously enforce the guarantee to obtain payment. This is definetely what I would do if I was a representing a client in your situation.
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
Hi Bernice
I am in the same development as you. Thanks for your post. I wonder if you would mind providing me with the contact details of the solicter you are using please.
Regards
Steve
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rip-off
Oh dear Bernice, Ā£338 for a power of attorney! What a rip-off! Are you sure your lawyer is not in bed with this uk notary and getting a share of that money? Perhaps the fees he charges donāt include āhidden feesā
Our lawyers in spain not only win cases against developers as Aifos, they also make sure we are not cheated. The notary they recommended us in the UK charges Ā£75 for a power of attorney. His contact details are:
Mr Robin Stephenson
Newcastle
01782 619225
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
If our conveyance lawyer was unable to obtain the promised bank guarantee should they have advised us to stop making further progress payments?
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
What happens if your solicitor fails to deliver the bank gurantees which are due at the time of the 30% deposit, stalls every time you ask, then the builder does not complete and goes into receivership and it emerges that there were never any guarantee. You then find that this has happened on a large scale, the police are investigating fraud such that the case will take several years and after police and legal costs there will be nothing left. Will the solicitors malpractice insurance provide a glimmer of hope.
I read your article but it becomes totally impossible to see bank gurantees until 30% has been handed over.
Can you advise
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Dear Sir,
In this case the best option may be to claim against the professional indemnity insurance.
If you read the article, the obligation is of the developer to hand you the bank guarantees, its not the obligation of the lawyer, the law doesn't say that. And in fact the only penalties there are for breach in delivery are imposed on the developer not on the appointed lawyer.
That is why it is very important that the lawyer/law firm you appoint is independent.
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
Hi.i bought off plan 2005 paid deposit then in 2007 got solicitor to check contract and get Ni number ect..long story short developer vailed to complete and is in jail,,employed spanish solicitor to take to court to get money back,,i now find that i have no bank guarantee,,should this have been brought up when contract was checked in 2007 as part of normal practice? i have asked the solicitor and as of yet had no action..seems we will win in court but as there is no bank guarantee and developer in jail no mney to be had..really angry that solicitor did not mention the so called guarantee that we were meant to have but seems we never got it..can you advise..
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Dear Sir,
I think you've opened a can of worms.
Law 57/68 establishes that it's the developer's duty to hand you a bank guarantee or insurance policy to secure your stage payments in an off plan purchase. The law doesn't mention anywhere it's the lawyers' obligation.
Furthermore in the Building Act (Law 38/99) the penalties are imposed only to developers, not the conveyance lawyer handling the matter, for failure of compliance on the issuance of bank guarantees.
That's what the Law prescribes.
Now we can start a contentious debate on whether lawyers are responsible or not to obtain these BGs from developers on behalf of their clients.
The fact is that in light of the above laws which specifically rule this matter nowhere does it mention that lawyers are obliged or its part of their duty of care to obtain them.
This is when I take the opportunity to add in a shameful plug as a disclaimer that our law firm has obtained always BGs to the entire satisfaction of all our conveyance clients in off plan properties before we ensue with the all too predictable lawyer bashing replies. Although in all honesty we've hardly done any significant conveyance at all in the past as we are specialised foremost in litigation.
We've written an article that endeavoured to wrap up neatly the matter of Spanish bank guarantees for off-plan properties. It's worth a read.
Another matter being what is our personal stance on this matter.
Our opinion is that it's obvious it's part of the integral duty of care of any conveyance lawyer towards his client to ensure that each and every stage payment, including the initial security deposit which strikes the property off the market, is secured by means of valid bank guarantees or insurance policies.
But our opinion is non consequential.
What matters really is what the Law rules and nowhere does it rule that it's the lawyers' duty, much less his responsibility, to secure them. Which is why on taking this matter up to a Bar Association it unsurprisingly fails as from a legal point of view the matter is clear in our humble opinion.
I believe one should clearly distinguish between lege ferenda and lege lata; even more so lawyers on passing legal advice and opinions in public venues.
It's always all too easy to post what the expat community wants to hear and receive the ensuing round of applauses. Albeit what's really difficult is when you write on how matters really work out in practice and receive the predictable flak for daring to be outspoken or dare to stand out-of-the-line in this politically correct World we all live in.
I am fully aware that the above statement may cause some controversy, but that's the legal exposition of how matters are currently. Which is why we always add the tag on our legal articles and advice.- make sure you hire an independent lawyer/law firm. Many of these legal pitfalls are easily avoidable having hired someone independent that cares only for your interests and has no vested interests of their own lurking away in their mind.
You can of course always follow the path of claiming against their professional indemnity insurance, providing they are registered lawyers, and see how that one works out.
If the laws need to be addressed on this grey area, so be it. But that's how things are currently and that's how we tell it.
Caveat emptor.
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
I have successfully claimed against my bank guarantees but the interest was not forthcoming, am I by law able to pursue this as the guarantee is binding? People I know have received 6% from the same bank!
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Dear Madam,
Yes you are entitled to the legal interest besides the principal insured amount. In some cases the interest may be 6% and in other cases less. It will depend on the wording of your Private Purchase Contract.
Please read our article on the matter:
Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask - 12 Nov 2008
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
We secured a property with deposit November2004. We paid 50% of the purchase price of our off-plan property in January 2005 due to be completed May 2006.
Building work on the site commenced, then stopped due to legal problems. Our property never even started.
We advised our lawyers in April 2008 to cancel and recover our money. We supplied power of litigation September 2008. We are still waiting and the lawyers never give details of procedure they are following or what is happening although I e.mail regularly. Bank guarantee expires May 2009. What can I do, how long will it take?
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Dear Madam,
Hasn't your lawyer already pulled out and litigated? Are you sure your lawyer is specialised in litigation?
Your lawyer should inform you on when the law suit has been filed. Normally we Spanish lawyers do not email regular updates nor on a weekly/monthly basis. We email only on major milestones along the legakl procedure such as:
1. Registered letter sent
2. PPC cancellation (pulling out of the contract)
3. Law suit being filed
4. Assets embargoed (if applicable)
5. Preliminary hearing
6. First Ruling
7. Second and normally Final ruling
You should really query your lawyer on wether he's filed the law suit already or not.
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
Is there such a thing as a partial Licence of first occupation? If yes what is it have how does it work?
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Dear Mr Smith,
You should really be asking this question in this thread:
The Licence of First Occupation Explained - 29 Jan 2009
A LFO parcial is normal and there's nothing to worry about.
You have probably purchased on a large off-plan development with various phases such as the one I give as an example in the above article. For each of one of those phases a LFO is issued by the Town Hall, and they add the word "parcial" because it it is granted only for a given number of dwellings, not for all, i.e. for 80 dwellings out of 300 which are divided in 4 phases.
Yours faithfully,
Raymundo LarraĆ*n Nesbitt
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bank guarantees
We have deposits paid on 2 apartments which were not finised on time. A few months have passed and our lawyer is advising that we sue the developer as the bank has refused to honour the bank guarantee. The lawyer is asking for an up front payment but cant say how much the entire court case would cost. We appreciate that an exact figure would be difficult to give but we want an approximate amount. We have a lot invested already and would like to have an idea how much more would be involved. this is important as we would lose this on top of the rest if the case were lost. How would we get an idea of the costs involved?
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Dear Sir/Madam,
In our case clients on hiring us do know how much they will be charged so as to avoid unpleasant misunderstandments. A full breakdown of fees is worded in our Letter of Engagement on being retained.
It is very important you receive a written quotation otherwise legal fees may turn out to be exorbitant.
Legal fees will vary depending on the work involved on litigating. Normally our legal fees are split between an initial up front retainer fee and a contingent fee dependant on the result achieved.
Please contact us if you wish us to provide you a quote free of compromise so you have an approximate idea of what to expect.
You can read our litigation blog on some of the cases we've won recently.
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Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask
I purchased an off plan development in Arenal Golf, Benalmadena in 2005. We cancelled via our soliciter in 2008 but are still waiting. The solicitor offered us to join in litigation but for an additional 7000 euros and to be honest they have been that bad and never kept us upto date I don't want to give them anymore of my money. We have a bank guarantee but this seems to make no difference they are refusing to pay. We are at our wits end what can we do? We are owed Ā£50,000
Mark & Chris
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Dear Mr Smith,
Please contact us on your matter and we'll be glad to assist yuu, thank you.
Yours faithfully,
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Bank Guarantees in Spain: All That You Ever Wanted to Know but Were Afraid to Ask
Hi, we have just received 77,000 euro's banc guaranteed from banc of popular but no interest or our 1st intial deposit,3,000 as per our contract with peinsa? we have had such a bad year with all what they have put our two families through, can you give advise ref; 1st deposit and interest as the interest over 2 years and 4 months is 14,200 which is a lot of money for our families who sold family homes to secure these properties and was living in rented properties for over 2 years. Peinsa builders have cost our two familes a fortune.
HOPE YOU CAN HELP,
many thanks kind regards
Msr Jackie Hearn
Fot The Hearn & Hunter families
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Dear Mrs Hearn,
Under Spanish law, law 57/68, banks or insurance companies have to pay you the accrued legal interest, besides the principal, whether the bank guarantee or insurance policy mentions it or not.
Please contact us and we will gladly deal with your matter.
Yours faithfully,
Raymundo LarraĆ*n Nesbitt
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Bank Guarantees in Spain: All That You Ever Wanted to Know but Were Afraid to Ask
I am acting as a broker and have investors interested to purchase bank guarantees from Portugal. I am looking a binding contract to secure my commission in case I successfuly cause the transaction between the buyer and the seller.
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Bank Guarantees in Spain: All That You Ever Wanted to Know but Were Afraid to Ask
the lawyer i had in spain failed to get my bank
guarantee, and now is asking for a lot of money for there services, the builder is going out of buisness, can i sue the lawyer for not getting my guarantee as i will loos a lot of money could take years to get my money back through the courts, i am a pensioner an cant afford to loos that money
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Dear Mr Brewer,
Please read the detailed reply we have written in post number 19 of this thread:
http://www.marbella-lawyers.com/foru...t=78&page=2#19
A lawyer may have requested from a developer a BG but the developer may not have issued it. If your lawyer is able to prove he sent registered letters or faxes requesting a Bank Guarantee your case against him will most likely fail.
The obligation to issue BG's following our laws is only of the developer, not of the lawyer.
Moreover, laws sanction only the developer, not the lawyer, on failing to provide an off-plan buyer with one.
Which is why when lawyers are sued over the issue of Bank Guarantees most of these actions fail because of the above two reasons. If in addition the lawyer can prove he actually did request them the case is bound to be turned down,
Yours sincerely,
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Bank Guarantees in Spain: All That You Ever Wanted to Know but Were Afraid to Ask
I purchased a property on the Almanzora country Club in Mazzaron in May 2005. The development has since been abandoned due to planning problems. And I subsequently cancelled the contract. I recieved a bank guarantee for my first stage payment after much harrassment.I have had this money paid back. However I could not get a guarantee for my 2nd payment of 30,000 euros despite numerous e-mails to the builder Huma Medditteraneo SL. Have I any legal recourse on the bank directly to pay back the monies deposited in there bank.
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To be honest it's difficult but not impossible. It will depend on your risk threshold to assume more or less risk litigating.
We've recovered client deposits with only photocopies of bank guarantee and at times with not even with a copy at all and at others even executing collective bank guarantees. But it's fairly difficult and lengthy. If you take this path you must be fully aware of the risk you take.
It boils down to the wording of the purchase contract, to whether the bank did open a special escrow account to deposit off-plan payments as per Law 57/68 and if the money is still being held there etc. It's not an exact science.
Yours faithfully,
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Bank Guarantees in Spain: All That You Ever Wanted to Know but Were Afraid to Ask
We also purchased on Almanzora Country Club but never received any BG's for any of our stage payments. We won our legal action against the builder but are still waiting for our money. We bought through an agent and they were supposed to apply for the BG's but again we never received them, despite constant promises from the agent that they were on their way. The agent ignores all our correspondence and has refused to help us, so we are completely on our own apart from our solicitor, who we appointed when we cancelled our plot. What can we do now as we are due to retire in only 3 years time and are now living in a rented property, so we will not be able to survive once we retire, as we sold our family home to purchase this doomed property? Do we have any recompense against the agent? Thanks
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Dear Mr and Mrs Mayne,
I'm sorry to hear your case.
Regarding your legal query, an estate agent cannot be held liable on failing to provide Bank Guarantees securing your off-the-plan stage payments.
No estate agent does this, nor is it their professional duty.
Our laws clearly state that it's the developer's duty to hand them over as explained in the article which starts off this thread.
As a sidenote, only because you lack a BG does not mean you will never be refunded or your money is lost. Many off-plan buyers retrieve their deposits litigating and they were never issued a bank guarantee in the first place.
You can read further:
Is Litigation Against Spanish Developers Worthwhile? - 23rd May 2008
Lawbird's Blog
Yours faithfully,
Raymundo LarraĆ*n Nesbitt
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Bank Guarantees in Spain: All That You Ever Wanted to Know but Were Afraid to Ask
Dear Lawbirds,
If first occupation licence is granted on the only complete phase of a site that is having major subsidance problems on another phase and the third phase will not be completed in the forseable future, should the bank guarantee still be valid?
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Dear Madam,
As per law 57/68 a BG is only valid until a Town Hall issues a LFO.
The moment the developer attains a LFO, the BG securing the stage payments for those properties included in the LFO ceases to be valid (Art 4 of the said law).
Quoting my article on Licence of First Occupation:
The Licence of First Occupation Explained - 29th January 2009
Quote:
Is Every Off-plan Development Issued a Habitation Licence?
Yes. As previously written, each dwelling has its own individual LFO granted, although in large developments they are normally grouped for simplicities sake. A detached villa will have its own individual LFO whereas large developments consisting of various phases will have grouped LFOs issued. Each of these phases normally has its own LFO. So for example in a huge development of 300 units grouped in 4 phases there could be four different building licences and you would have one all-inclusive LFO granted for each individual phase grouping 75 dwellings at a time. This could well mean that even within the same finished development some properties may be legal (with a LFO granted) yet others are not legally deemed as habitable yet. You could only tell which are which by means of thorough legal analysis. Another matter being if the local authorities actually pursue those who live in, or let properties which lack the mandatory LFO, but I’ll reserve that for another occasion.
As I explain above, a development normally comprises three or more phases. Normally a LFO is issued for each of these phases as each one will have its own Building Licence. So if in your case you have three separate phases and only the first one is finished BG's for phases two and three should still be enforceable as no LFO has been attained.
In any case to make sure I would need to review the documents.
I hope the above clarifies your query.
Yours faithfully,
Raymundo LarraĆ*n Nesbitt