Abusive bank guarantee - solicitor tells me to accept it!

Hi 

After threatening to cancel my purchase, I've finally been given a bank guarantee on my off-plan development - a year after making my last stage payment.  

I asked my solicitor for a copy of the original and a translation into English. The translation was refused  as my solicitor tells me they don't do translations, but had an email saying that my BG came from a responsible builder and that everything was in order. I've had a go using Google Translator to translate the BG, as far as I can see the BG stipulates an expiry date BEFORE the likely completion date and also the amount guaranteed is exactly for my payments - no 6% interest is added! 

When I've contacted my solicitor about this, I've asked to have interest added and for the BG NOT to have an expiry date - just to say that it is valid until the building is completed.

The reply from my solicitor says that it is impossible to change the BG, so NO INTEREST and to apply for another BG when this one expires next year.

I'm not happy with the service I'm getting - firstly it took a lot of badgering and threats to eventually get a BG - the solicitor put the lack of one to 'an administrative oversight' on their part. Secondly, how come I don't get a translated BG. And when it does come, it contains clauses that are prejudicial to me the purchaser. Am I really likely to get another BG when this expires in a year's time? Why don't I qualify for interest on my money that the developer has had for nearly 18 months , is this accetable?

Any comments on how I'm being treated by my solicitor and what to do about it all. I'm tempted to cancel my purchase, if I do, do I have a case for the return of my interim payments.

Thanks in advance

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I would cancel and wait a year or two, your property will be at least 50% cheaper assuming of course the Spanish goverment hasn't torn it down.

Hey why wait, here's a two for one offer

http://www.eyeonspain.com/blogs/realestate/683/desperate-spanish-developer-makes-two-for-one-house-offer.aspx

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Looking at other cases it seems you may have a claim however Maria or a good solicitor can advise.( Change Yer Solicitors by the Way)
Having a valid claim and getting paid by the Banks may prove very difficult if not impossible
Saying wait as property values will fall by 50% is not the answer
Some my very well do this but its going to be what you paid and in what location that will decide that.
At the end of the day do you like the location/can you afford and are you willing to walk away loosing the deposit which may be the outcome.

Just Dan

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Just Dan
 I was wondering if you had your contract reversed by the builder / developer  before trying to claim from the bank.The developer I was buying with has agreed to do this and assures me that once this is done the bank will pay the amount on the BG no interest, however by doing this  will mean I have no future claim against the developer only the bank  what do you think. Will the bank pay or will I have to take them to court anyway.  welcome any thoughts anyone has Ceers JA

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Julieanne, you will have to go to Court to execute your BG. The Banks will not just "pay up" as you would "rightly" expect. It is costly and can take years. You also need to get an independant Lawyer ( not recommended by the developer) to check that the BG is valid and bone fide.(sp?)  and to check that the developer is not just fobbing you off just so that you have no further claim against him. 
The BGt should have your name, passport number, the address of the property that you were buying and the amount written (words) that you have paid. It will be called an AVAL.

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Julieanne
The reply from Tish is perfect.
Claiming on a Bank guarantee is not just walking in and saying I want my money back as indeed she will tell you.
Banks are simply not paying out even with court orders against them they ignore the law,
The most important thing is to get that advice regarding your case with a different solicitor.
Never believe the developer or from what I have read in your postings your solicitor either.
DO NOT SIGN OR AGREE TO ANYTHING UNTIL YOU HAVE GOOD INDEPENDENT LEGAL ADVICE. which is both Tish (Hi Tish) and my advice.
This is the best advice you will get on any forum by anyone that knows what their about.
That developer reverse of contract seems very dodgy.
Just cant tell you how important this is and know Tish who also has much experience in claiming on B.Gs would agree.
Put it this way. I have blatent straight foward claim that the Banks should have paid out on 5 years ago and I am not even near the front of the queue.
Reality is that when the court date comes all I need is a bent judge and thats game over.

Just Dan
Wish you well and please take into account this could be an expensive and time consuming event sadly to say.

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Hi all 
thanks for the replies just to clarify a few points .I am now on lawyer number 2 and choose very carefully this time and I do think he is good but how do we ever know that for sure with any lawyer in any country. He has met with the administrators of the developers and seems to think the reversal/resolution of the contracts is the first step to being able to claim on the BG if I don't want to do a deal with the developer to reverse the contract I can do this through the courts .The condition the developer has put on this is that purchasers forgo any claim of Interest on the amount. It feels a bit like blackmail and like you all say I don't think the bank will pay however the admin of the developer are insisting they will . The trouble with all of this is I don't think the lawyers really know what to do either as we are all in uncharted territory .The Lawyer has asked us to think about it and let him know what we want to do. I really don't know what to do anymore and certainly don't trust the developer or the court appointed administrators as far as I could throw them. The interest doesn't bother me I would be happy to walk away with anything .I have spoken to 3 Spanish lawyers about this and they all have different opinions . I don't know how we are supposed to make good decisions in all of this when they don't seem to know what is best. I just wish I could get out of this mess but no one seems to know what to do not even the lawyers and I never seem to get a straight answer to my questions from any of them.I wish I could just walk away but then corruption wins  again and it will just happen to others in the future.Thanks for the replys anyway but  I am damned if I know what to do.JA

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Hi Juileanne
Ditto from thousands of others.
Luv the bit about the admin were confident that the banks would pay out  Yeh right

Wish you all the best and seems that the only person that can make this decision is yourself .
Wouldnt sign the bloody thing myself as it just dosent seem to stack up but like other forum members thats only my opinion.


Regards
Just Dan

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Cheers Just Dan I guess I will have to take lessons on how to fight corruption with corruption .

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Julieann, we had 3 lawyers before we found the right one!! I don't see why you need to "reverse the contract". If the builder is in administration, then a BG is precisely what it is there for, to protect you against such cicumstances. You are entitled to interest + your costs.(Your lawyer has to apply for these). I also wouldn't sign ANYTHING , just exercise your Bank Guarantee. A decent LITIGATION lawyer should know how to do this. If your Lawyer just deals in CONVEYANCING, change to a litigation lawyer who is knowledgeable about Court procedure
Good Luck. As Dan  (Hi Dan ) says, The banks appear to be reneging on paying out on justifiable claims lately.


This message was last edited by Tish on 10/19/2008.

This message was last edited by Tish on 10/19/2008.

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Hi Julieann
Reply from Tish perfect again
Just seems that yer solicitor is  a bit out of his/her depth and as Tish say appears to be a conveyancing solicitor and while you may like them they appear to not to be able to give you the anwers you need,

Bit like a conveyance lawyer in the U.K  that would not carry out litigation in courts.

Think yer getting pretty good advice here gal and the stakes are high so get your bloody  legal  questions answers answered somewhere as to the situation you face before signing anything
Use 10 lawyers if you have to.

Regards
Just Dan

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Thanks Just Dan 
I don't want to say who I am using but it is a litigation lawyer .I am speaking to him tommorrow and have a list of Qs as long as my arm .I only managed to speak breifly last week which is why I have so many Qs I need answered .I think alot of this is new territory for the lawyers as well .Thanks for all the advice I will  get some answers tomorrow before I decide which way to go .

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Make no mistake Julie Ann there are a lot of lawyers that have been down this path already - if the answers you are getting are fuzzy from the lawyer you have appointed then you should perhaps trawl around - there are litigators and there are litigators. As to the point about differences of opinion - essentially that is what law is - Maria de Castro on this forum in my opinion seems to have a strong view on consumer rights and a good knowledge of consumer law so it could be an idea to contact her. 

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We are buying with San Jose, and we too have had an email from the Lawyer highly recommending to "reverse the contract" and claim via the Bnak Guarantee, even though our BG is only a copy, and expired in April 2008.  

This is our second Lawyer, went with one on here that everyone was recommending. 

What the hell do we do for the best, this situation is a nightmare

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Every Bank Guarantees/ Insurance Policy under Law 57/68 (on  guaranteesof handed deposits) have ALWAYS the obligation of payment of interests legally included. Rights out of that Law ( and accruing of legal interests in your favour is one of them) cannot be waived.

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Maria who pays the interest the bank or the developer ? I f the the law states it is the so why are developers and our lawyers suggesting we for go .I am confused.

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Could be any one of a number of reasons. Your lawyer may not be overly assertive and would prefer to favour the developer rather than act in your best interests - unless of course he knows something that we dont. Many lawyers here in Spain (I am sure Maria will agree) would prefer not to ruffle a developers feathers as they derive a great deal of business from developers - they are also aware that litigation can take an awful lot of time here owing to the failings of many of the courts in running efficiently - additionally many of them are quick to say they can do something when they are not best qualified to do it - i.e. a conveyancing specialist that takes a litigation case - many of them simply dont like it as often hearings are adjourned and much time can be wasted - thus it is easier for them to find the easiest solution that they think keeps everybody a little happy and they still get paid - instead of one outright winner and one outright loser. As the saying goes "the right way, the wrong way and the Spanish way"

Please dont think that I am saying this should be the correct procedure, but it is what it is

I guess if you dont like what your lawyer is recommending and advising then you always have a choice - it would be the same in any judicial system - if you want a second opinion and dont think you afre getting the correct representation find someone else

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Interests will be paid by guarantoors ( Banks or Insurers).
Also take into account that guarantoors have an action aganst developer to recover the guaranteed and repaid money.

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Julieann
Look at the bright side, all of this free expert advice for nuffin.
Think you should have more confidence to ask questions and Smilies last posting was a gem an SOOOooo true

Kind Regards
Just Dan

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Thank you Maria for all your advice


And everyone else - 

They say though that San Jose will only reverse the contract if we agree not to claim the interest, so if it is the Bank that pays the interest, why is it being written into the reversal of the contract??   Which is the best, to wait for the decision of the court or claim  on the Bank guarantee, bearing in mind, I only have a copy, which is dated for 2008 (although some are saying the date is irrelevant - its still a worry when its all you've got!)

Would love to know what others in the same position as us are doing!

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