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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche.

Legal tip 174. Those illegal bank Guarantees
04 November 2009 @ 09:17

It is a very simple and obvious observation, there is no need of much legal rethoric or argumentation: the conditions of Bank Guarantees 57/68 were established by Law as inalienable and once the Bank or the Insurance company freely decides to issue these guarantees ( as part of a business relationship with the developer) ,they are issuing them according to the requisites, characteristics and imperatives of Law 57/68.

So if you find a Bank Guarantee or an Insurance Policy which in its main statements affirm that is issued according to the obligations of Law 57/68... you can stop reading the rest because regardless what they say, guarantee, limit.... they are actually, by force of the Law, obeying Law 57/68 which is above developers or guarantoors´ wills.

"Public Interest" is called in political and legal jargon. And rights created by legislator for the protection of public interests are inalienable, cannot be waived... whatever interests operate for the supression of them in a 57/68 Bank Guarantees... they are there... you cannot kill them.

In clear and practical terms: your Bank Guarantee:

- Do not expire till First Occupation License is granted AND the house is handed over to buyer

- Include full  legal interests accrued from the moment  buyer pay to developer  to when the amounts are effectively refunded.

- Once the Guarantee is duly executed or the contract is cancelled, the judicial action is open for 15 years.

- Any wording of the Guarantee is valid, according to Bank of Spain.

- Original copy of the Guarantee is not necessary: also according to Bank of Spain.

Hope these are good news for many of you.

Maria L. de Castro

Ermita  de los Remedios  (Luena) por Lumiago.

Ermita de los Remedios, Luena, Cantabria, Spain by Lumiago at



Like 0


declan said:
04 November 2009 @ 12:15

Hi Maria

does this mean im due all my deposit back and not the 50% im been offered i have no bank guarantee in place with developer

Maria said:
04 November 2009 @ 12:25

If there is a cancellatory breach of contract by developer, he is obligued to pay back to you all deposit plus legal interests ( 4-5%) annual.

tracy barnes said:
05 November 2009 @ 09:17

Thanks maria
I'm just bringing myself up to date with regard to my M7 el pinet investment with san jose - thanks to you I have more confidence to work out what documentation I have in place. Joy oh Joy - among all the paperwork I found a bank guarantee and further joy it does include the 57/68 statement. Should I make direct application to the bank for return of my funds. I have my original San Jose Contract and it clearly states that completion would be May 2006 or three months later. Thus the contract has been broken and if I am reading this right then I am entitle to my full depost plus interest from when paid - October 2004!
Look forward to your response - Tracy

Maria said:
05 November 2009 @ 11:17

Dear Tracy:

Correct and Congratulations.

Regardless the unsolvency proceeding San Jose is under right now, YOU HAVE GOT FULL RIGHTS for the execution of that Guarantee and return of your money plus legal interests.

I would advise you to use a good solicitor with expertise in this type of cases.

Best regards,


Stephen Rynberk said:
17 November 2009 @ 09:31


I would be obliged for your opinion over an issue I have with Corvera Golf & Country Club.
Back in 2005/06 we decided to place a deposit for a Magnolia Villa with the understanding that the projected time for the villa to be completed was by June 2009. Obviously with the crash in properties all building work was effectively put on hold, which I understood and had great patience with.

However, the particular section we are in they have no plans to start building, so much so they have not applied for the licence either. This, in my opinion, is so they can try and get out of breach of contract by trying to cling to the 18 months after licence is granted are they obligated to build the villa clause.

I would suggest that this is a deliberate ploy to keep my deposit monies without have any intention to build until many years in the future.

My question is this, do I have a legal right to reclaim the deposit monies back as I feel they are in breach of contract since they cannot or will not give any definitive start time for this phase of the site.

If I do have to go legal and pursue the matter through the courts are there any no win, no fee type schemes out there?

Your comments would be appreciated


Maria said:
17 November 2009 @ 09:39

Dear Steve:
Yes, you have a case for contract cancellation due to several reasons: undefiniation of starting and completion deadline, lack of Work License after 3 years...
ANyhow, I would need t make a more caerful analysis on your documentation.
Please feel free to email me if you need that valuation.
You can find our contact details in the website:

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