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Your Spanish Property Questions Answered

Hola! I represent Livingstone Estates, an estate agency based in Estepona on the Costa del Sol. I have started this blog to help people out with any real estate questions they may have. The idea is to answer questions here so that others can benefit from our advice. So if you have any questions that you need answering please fire away.

Q: Is my money safe with Polaris World?
Tuesday, May 12, 2009 @ 2:11 AM

 In my original blog post Craig Thomson asked:

"I have bought property from Polaris World but the builder is not going to complete the development or even start it. I am looking to terminate the contract and recover my instalment of over 40K Euros with interest. Please can you confirm my chances of doing so ?"

Dear Craig

When you handed over your original deposit your lawyer should have ensured that you were given a valid bank guarantee which is a legal requirement of all developers in Spain.

The bank guarantee, of which there is much information about on this website, is supposed to safeguard your money in the event that the development is not completed or it is completed late.

It is important to note too that some developers have sometimes put an expiry date on bank guarantees.  A court ruling recently overruled this so expiry dates don't mean anything anymore.  

In terms of executing your bank guarantee it depends on the date stated in your contract regarding completion.  Has this date now passed?  If it has then you need to get your lawyer on the case ASAP to start the process of claiming your money back.

Normally you should be able to claim back around 6% interest but most people are just greateful to get their deposit back alone.  If you get the interest back too consider it a bonus.

To sum it up, if you have your bank guarantee then yes, it's very possible you will get your money back although unfortunately you may need the assistance of a good lawyer to get it as some developers are really struggling financially.

I hope this information helps.


If you would like me to answer a question for you then please leave a comment below.

This post was made in association with Livingstone Estates who apart from other locations, have property for sale in Nueva Andalucia and property for sale in Mijas.



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3 Comments


BRAD HURLEY said:
Tuesday, May 12, 2009 @ 12:08 PM

Hi Livingstone Estates ,
Thanks for the info on Bank Guarantees, please can you tell me when and where I can see details of the recent Court rulings that BG dont have any expirey dates anymore and therefor dont actualy expire even when given an expiry date ?


Livingstone Estates said:
Thursday, May 14, 2009 @ 11:21 PM

Brad, I believe it is somewhere on the Eye on Spain website. If you ask Maria de Castro, the lawyer that posts on the forum, she will be able to give you more information about this.


Graydale said:
Saturday, June 20, 2009 @ 10:33 AM

Livingstone Estates' observations regarding the bank guarantees are correct so if you have bank guarantees your money is safe.

However, Polaris World's purchase contracts allow them to hand over the property no later than 18 months after they start to build it.

What they are doing when they decide not to build parts of their projects in the current climate (e.g. Condado El Mirador and Golf Suites) is to offer buyers an alternative similar property either on the same development or on another Polaris development.

From a developers point of view this seems utterly reasonable but buyers are seeing this as a reason to pull out of their purchase. Are they pulling out simply because they can't get what they originally wanted or is it a good excuse to get out of the financial commitment in these troubled times? I believe that, in most cases, it is the latter.

Polaris appear to be saying that, if you don't want any of the alternatives offered, they will leave the exisiting contract in place and you will have to wait until they build it; which they eventually no doubt will.

That would mean going to court to get your money back and the questions the court would consider will be (1) What is a reasonable period for Polaris to build your original property? (2) Have they been reasonable in the circumstances offering you alternatives? (3) You wanted to buy a property in Spain. Why do you now want to pull out when Polaris have offered you reasonable alternatives? (4)Have you been unreasonable not choosing one of the alternatives offered?

I'm not sure that this scenario has been tested in the courts. It might take a brave man to do so !!




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