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Thread: Bank Guarantees: All That You Ever Wanted to Know but Were Afraid to Ask

  1. #11
    Kevin
    Guest

    Default 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.

  2. #12
    Unregistered
    Guest

    Default 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.

  3. #13
    Junior Member
    Join Date
    Jan 2009
    Posts
    1

    Default 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

  4. #14
    Unregistered
    Guest

    Default rip-off

    Oh dear Bernice, £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 don’t include “hidden fees”

    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 £75 for a power of attorney. His contact details are:

    Mr Robin Stephenson
    Newcastle
    01782 619225

  5. #15
    A Morcom
    Guest

    Default 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?

  6. #16
    geoff.hackett@virgin.net
    Guest

    Default 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

  7. #17
    Senior Member
    Join Date
    Oct 2008
    Location
    Marbella
    Posts
    1,095

    Default

    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.

  8. #18
    kevin Sung
    Guest

    Default 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..

  9. #19
    Senior Member
    Join Date
    Oct 2008
    Location
    Marbella
    Posts
    1,095

    Default

    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.
    Last edited by Lawbird Lawyer; 03-25-2009 at 07:45 PM.

  10. #20
    elaine
    Guest

    Default 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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