23 Jun 2009 1:24 PM:
Dear Maria.
Regarding Bank guarantees.
We have cashed in many bank guarantees.
I am surprised when you say that the norm is fo rthe banks not to pay out on a bank guarantee forcing you to go to court. (this could lead peple not to attempt to cash their BG. putting them inj danger of loosing their money)
If the bank guarantee is correctly written, and their is a clear breach of contract by the builder , the banks DO PAY .
We have presentd exectuion of bank guaranteed amongt others against Bankinter, Banco Popular, Banco de Andalucia, Cajamurcia ,Banco de Valencia, CAM bank CAJA MADRID etc. THEY ALL PAID.
All these banks mentioned above have paid out on bank guarantees executed by us (wihtought going to court)
They do need to be pushed , and the correct point of pressure needs to be aplied, but if the builder is in clear breach of contract the bank guarantee is correctly written, and is not out of date (many bank guarantee state they are not valid after a certain date/the legalitie of this clause is not clear, but banks will not pay out if exectured after this date) the BG can be cashed.
It is very possible that if a buyer tries to do it on his own, he mignt be messed around, but a bank will not unlawfully refuse pay out on a bang guarantee (which is a binding document for them ) unless they have at least one legal leg to stand on (i.e. BG out of date, the breach of contract by the builder is not serious enough ).
We have come across one bank (the exception to the rule) that will not pay if the Builder is allready in concurso de acreedores , as they feel it could cause them problem with the administrador concursal. This particular case was sorted out joining the concurso and prsenting an incidente judicial.
IF PEOPLE HAVE BANK GUARANTEES THEY MUST BE CAREFULL THAT THEY DO NOT ELAPSE.
If the BG does not mention their obligation to pay interest, in a couple of cases they have refused to pay this interest.
I am convinced that if I whent to court I would win in relation to teh interest, but in both cases my clients did not wish to persue it further.
I am sure you must have examples of cases in which the bank has not paid, but their refusal to pay I am sure will have a reason atttached. i.e They consider their is not a breach of the builder contract yet, the BG. has elapsed etc. If the BG is correct , the breach is clear (for example non completion 6 months after the completion date), and the execution has been presented in form I find it difficult to understand how the bank can not pay.
We have executed no less than 70 BG.s and all but one where paid . I only have one case at the monent in which the bank has not paid when I consider they should , which is with BANCO de VALENCIA, who has refused to pay the bank guarantee while the building company is in concurso until the judge handling the concurso tells him to do so. I could achieve this with an incidente judicial at the CONCURSO, but up to now we have not done this. But thi is just the exception to the rule.
Havingn said all the above, I can agree that most of the buyers out thier do not have BG. and that many who have have let them elapse. The bank will also normally play games and call the builder , so that he in turn can call the client to try and convince him/her to pull back the request of payment of the BG. (they do this, because the bank knows that if all is presented correctly they will not be able to escapte payment , and that they in turn will then have to turn to the builder to get theri money back after paying th client.
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portabello by proindal introduced by Mri
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