What is Bank Guarantee?

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02 Apr 2009 00:00 by supa Star rating. 2 posts Send private message

 Hi All, 

I want to rent a business and the landlord (a company) asks for the rent 6 months bank guarantee except of the 2 months security deposit. I never dealt with bank guarantee and what I have found on the internet it is usually for very big amounts for big companies. I do not really know if it means that I have to close on my account 6 months’ rent  (than why they do not ask more security deposit?) - or what is the way to get bank guarantee to start a business. It is quite serious business with small risk. Is it enough to the Spanish bank if the business project is good? 

What a Spanish bank ask for give this guarantee for a starting business and is it possible to get it? 

If somebody can help me to explain I will be very thankful. 

Supa





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03 Apr 2009 10:07 by mariadecastro Star rating in Algeciras (Cadiz). 8121 posts Send private message

mariadecastro´s avatar

Those Bank Guarantees are obviously a safety against rent default. My opinion is that they are old-fashioned and that the best way to protect payments and respect to the contract is to hire an Insurance for unpaid rents and to submitt the contract to arbitrationi rather than Courts.

This company is quite good, provide information in English and have special rates for EOS members: you can ask Justin about this:

www.arrenta.es    ( in association with Paragon Advance. Spain)

 



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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03 Apr 2009 10:59 by Lawbird Star rating. 59 posts Send private message

Lawbird´s avatar

Dear Supa,

They are very common, particularly on letting commercial premises. They are known as rental bank guarantees.

As María has explained, they act as a safety net for landlords on non-paying tenants.

Rental bank guarantees are explained in detail in our article on Landlord: Keys to Successful Rental Income.

 



_______________________
Lawbird Spanish Lawyers http://www.lawbird.com



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