I've been asked to comment on bank guarantees, so here are my thoughts:
It’s best to view a bank guarantee as a “last resort safety valve” why? Because there are many examples whereby the banks, responsible for compensation, have done everything in their power to avoid making payment even when there’s a clear contractual breach by a developer.
This has resulted in buyers waiting several years before they are paid-out and even then they may not get all the compensation they were expecting!
So whilst it is essential to have a bank guarantee, it is also vitally important that you choose a reputable developer who has all the necessary building licences in place before you enter into a contract. And of course it’s essential to check-out the developer’s track-record, as much as possible, if you are to avoid future problems.
Warm Regards...
Alan
This message was last edited by alan ablett on 11/12/2008.