Bangin head against wall

Has anyone else had the problem of their bank guarantee running out before their building is complete - Im sure I cant be the only one since building in spain is so slow.  The developer states they will issue another after its expired but my concern is that if they dont keep their word then I havent got a leg to stand on. Any advice please cheers - sue

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Hi  Sue. How do you know that your bank guarantee has run out? Is there an expiry date on it?

Bob. 

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Hi Sue,

From my experience as an Estate Agent here in Spain, it is important the agent has a system to inform clients 6 weeks before the expiration date on the Bank Guarantee.  I keep a copy of all clients purchase contracts and bank guarantees and as a matter of process arrange with the builder/developer by letter to issue a new guarantee.

It is illegal for a builder/developer not to issue a bank guarantee, i think off the top of my head they can be fined 25% of the amount to be guaranteed!

I would advise you write to the builder ASAP and request a new one, and if there is an agent involved tell them they have been remiss!

If you are unable to write in Spanish your lawyer should be able to do this for you.

Don´t panic yet but get that letter off today!

Incidently, I added this after the edit, you can always invoke the bank guarantee to get your money back if the builder has gone over the build time.

Good luck.

This message was last edited by Gillespie on 5/30/2007.

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Hi Gillespie.

I got my bank guarantee some 3 years ago when i put my deposit down and there is NOT an expiry date on mine, so i presumed it was open ended and did not need renewing. It also does not say that it is only valid for a particular time, like say 12 months. Do you think this is correct?

Bob. 

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I´m sure if there is no expiry date Bob then it is an open ended one. However I have known the English translation on bank guarantees to miss out whole passages of text. If you have the Spanish version, check it out for a date. If you are refering to your Spanish origional then it sounds OK but get a lawyer to check it out anyway. It is quite common for them to expire beyond 12 to 24 months.

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I believe bank guarantees do have an expiry date and you should get issued with a replacement one if the build has not completed by the time the guarantee expires.

I assume it's the lawyer's responsibility to ensure that you do actually get the replacement guarantees.

Justin

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That´s if the client has a lawyer Justin, most (in my experience)  don´t want to bother until completion (I insist with all my clients that they do have a lawyer at the begining)

There are many who are told by the agent that they don´t need a lawyer (on new-build) until Notary time , they are the agents to avoid.

Regarding lawyers ensuring bank guarantees don´t "run out" - I can´t imagine a lawyer with the nounce or processes in place to do this.  That would be expecting too much.!!!

However a professional agent will  There is more to being an agent than just driving people around until they say "yes".  We have a form in every client file  with 47 individual processes from airport to one year after completion.  If an agent is to receive a commission for selling a property, they must expect to earn it Tthere is nothing for free in this world!

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Hi Gillespie and Justin.

Thank you for your responses. I have once again looked at my bank guarantee which is in spanish only and it is from the bank itself and not San Jose the developer, and is called an AVALA which i think means guarantee. It has the banks stamp on it and is dated 6th. October 2004, which was the date of issue. but there is no expiry date. It looks like you are correct Gillespie in saying that it is not uncommon for guarantees to go beyond 12-24 months and mine looks open ended, but i will show it to my lawyer when i am on holiday there the first week in july. Thanks for your comments.   

                     Bob. 

This message was last edited by HAWKINGS111 on 5/30/2007.

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Good luck Bob. I´m sure in your case you have no worries but I´m pleased you are checking it out anyway.

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Thanks Gillespie, as you say it is better to be safe than sorry and i do agree with you that you should get a lawyer as soon as you start the ball rolling. We got ours approximately 2 months after paying our deposit.

     Bob.

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Quote: "If an agent is to receive a commission for selling a property, they must expect to earn it Tthere is nothing for free in this world!"

God bless you , Gillespie. You are now officially my favourite estate agent.

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Thanks Roberto, from someone as discerning and shrewed as you that is indeed a compliment. Do you think I can put that on the testimonials page of my website, it has to be worth at least a dozen client letters ;+)

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Thanks for your replies. I did take an independent solicitor out from day 1 thankfully who is the one who informed me it is due to expire the end of July. The estate agents - Interlink didnt bother. My solicitor has wrote to the builder Calas del Pinar and they have stated that they will issue another one when that runs out. My concern and my solicitors (whether we are being cynical i dont know) is that we dont want to wait until the end of July for this new document after the warranty has run out we want something in writing sooner from the bank to say one will be issued by them.  As if we wait until the end of july and one isnt produced then we havent any comeback. The builder tells us this is the first time he has been asked to do this and we are still awaitng a reply from him. I find this strange that we are the only ones questioning the timing of the issuing of the new guarantees. Anyone else come across this?  thanks sue

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Gillespie, please feel free to quote me any way you like. You can even include my avatar with it if you like!

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Copying Justin: I believe bank guarantees do have an expiry date and you should get issued with a replacement one if the build has not completed by the time the guarantee expires.

I assume it's the lawyer's responsibility to ensure that you do actually get the replacement guarantees.

Justin

CORRECT JUSTIN. THAT IS PART OF THE GOOD WORK OF A DILIGENT LAWYER.  AND IT IS NOT BIG DEAL AS THERE IS A FINE IN THE GENERAL BUILDING ACT OF 1999 TO BE IMPOSED ON DEVELOPERS REFUSING TO ISSUE THE PROPER GUARANTEES OF 25% OF THE AMOUNTS THAT HAVE  TO BE GUARANTEED

first additional provision of General Building Act 38/1999

La percepción de cantidades anticipadas en la edificación por los promotores o gestores se cubrirá mediante un seguro que indemnice el incumplimiento del contrato en forma análoga a lo dispuesto en la Ley 57/1968, de 27 de julio, sobre percepción de cantidades anticipadas en la construcción y venta de viviendas. Dicha Ley, y sus disposiciones complementarias, se aplicarán en el caso de viviendas con las siguientes modificaciones: An insurance must cover any deposited amount.

1. La expresada normativa será de aplicación a la promoción de toda clase de viviendas, incluso a las que se realicen en régimen de comunidad de propietarios o sociedad cooperativa. Applicable to any kind of houses.

2. La garantía que se establece en la citada Ley 57/1968 se extenderá a las cantidades entregadas en efectivo o mediante cualquier efecto cambiario, cuyo pago se domiciliará en la cuenta especial prevista en la referida Ley. All the amounts need to be covered, including cash amounts and amounts paid by effects ( which will be deposited in the special account stablished in law 57/68)

3. La devolución garantizada comprenderá las cantidades entregadas más los intereses legales del dinero, vigentes hasta el momento en que se haga efectiva la devolución. Guaranteed devolution is of all the amounts plus legal interests.

4. Las multas por incumplimiento a que se refiere el párrafo primero del artículo 6 de la citada Ley, se impondrán por las Comunidades Autónomas, en cuantía, por cada infracción, de hasta el 25 por 100 de las cantidades cuya devolución deba ser asegurada o por lo dispuesto en la normativa propia de las Comunidades Autónomas. Fines can be up to 25% of the amounts that had to be guaranteed.

This message was last edited by mariadecastro on 6/2/2007.

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