El blog de Maria

Q&A below is in regards to Depositer banks. Not in regards to Guarantoor banks

Law 57/68: it is clear that banks had to control off-plan deposits paid to developer’s bank accounts, but when does that obligation start?
The Supreme Court has said in at least 2 Sentences that this obligation starts "once the bank realises the possibility of off-plan amounts being deposited in a developer’s account".

So is that once a developer opens a bank account different to the account linked to a developer’s mortgage?
Yes, in our opinion. That is enough for the bank to realise the possibility, as the Supreme Court has defined.

What is the Supreme Court saying about when a bank can realise that funds are for off-plan property purchases?

The Supreme Court is saying that a bank can realise that the funds are for off-plan property purchases when the property details and buyers names are identified in the bank transfer and when the money is paid to the developer’s bank account stated in the purchase contract.

Was that established by Law?
No, that is not part of Law 57/68.

Was it clearly warned in the contracts?
No, it was not either.

So how can the Supreme Court make those requirements a requisite for the protection to be provided to the buyers?
It should not.  That is against Law 57/68 and its protective nature, Consumers Law and Contract Law.

Does the Bank need to prove what it did to meet this duty?
The Supreme Court has affirmed that the burden of proof of active surveillance is that of the bank as it is the bank that must prove the measures taken in order to protect the amounts deposited into the developer’s accounts opened in its branches

Should the bank monitor amounts received by property developers for other reasons?
Yes, the Money Laundering act of 1993 established that financial entities are obliged to control the amounts they receive from both property developers and estate agencies, as well as amounts from abroad, in order to know who was behind each operation.