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Spanish Off-Plan Property - Bank Guarantees - LEY 57/68

This blog is for all those Off-Plan property purchasers in Spain who have not received Bank Guarantees for their deposit funds as required by Spanish Law, in particular LEY 57/68 Article 1.1 and 1.2 and are now at risk of losing their money. In addition many purchasers who did receive Bank Guarantees are now finding that the Spanish Banks are refusing to honour them without legal action being taken by the purchaser.

19 April 2011 @ 01:06

Sr. José Blanco the Spanish Development Minister (El Ministro de Fomento) has announced that the Spanish Government Official Property 'Road Show' will commence in London on 4 May 2011.

In the official press release issued on 14 April 2011 in Madrid by the Ministerio de Fomento Sr. Blanco said:

"The Road Show will highlight the strengths of our economy, transparency and legal certainty of our planning legislation.

It is a good time to carry out this pioneering initiative because the markets that have the potential to invest in second homes are recovering and we must revive the holiday housing market ‘to speed up the digestion of stock’

In selecting the countries to be visited in this first round of Road Shows we have taken into account variables such as the volume of house purchases in Spain that its citizens have made in recent years, its investment in general in our country, the situation of their respective economies and the potential for increased investment in our second homes market.

The United Kingdom is the first international destination for this first round of Road Shows because, according to the latest data available, its citizens and investors in 2009 accounted for 31.5% of foreign buyers of property in Spain.

In subsequent weeks we will also visit France, Germany, Holland and Sweden.  In addition we will visit also Russia.

The Road Show is designed in two phases: in the first phase the Ministry of Development will transmit confidence to large investors and brokers, offering all the information regarding our market, ongoing policy reforms and greater transparency regarding the evolution of prices and stock.Subsequently we will develop a second phase, open to private sector participation, with a selection of real estate products that meet minimum standards of legality, planning and quality through an evaluation process in which agents and companies interested in participating in this round may voluntarily submit their properties and products”.

Speaking to Onda Cero radio station Sr Blanco defended the need for the Road Show by stating that "The fact is that there is a 'stock' of residential housing and it is necessary to speed up sales because it is weighing heavily on the sector financially".

He said "It seems that I have become a real estate agent but my role is to ensure greater legal certainty to potential investors following many campaigns against the Spanish property sector"

In February 2011, when previewing the upcoming Road Shows the Spanish Housing Minister, Sra. Beatriz Corredor said: “Come here calmly and trust in the system that we have and the transparency we provide”

Sr. Blanco and Sra. Corredor need to understand that for thousands of victims of the Spanish Property Sector there was and still is no ‘transparency or legal certainty’.

Despite many empty words by Spanish Government officials there still remains little evidence of any ‘ongoing policy reforms’.

Lawyers and Banks have been negligent, the court system is overloaded, judges are inconsistent and real justice is still an expensive dream for many victims.

There remains a basic lack of understanding of LEY 57/68 and in many cases the law is not applied properly.

The Supervisor of the Spanish Banking System – the Banco de España is totally ineffective and has no real power.  The result is that the Banks have been allowed to ignore their obligations according to LEY 57/68 and work together with the corrupt developers to blatantly steal purchaser’s off-plan deposit funds.

It is a serious mess and Sr. Blanco and the Spanish Government have NOTHING to put on a show about.  Before making more empty promises and embarking on a Road Show designed to entice other unsuspecting ‘victims’ into the shambles that is the Spanish Property Sector Sr. Blanco must, together with his government colleagues, rectify the serious injustices that have taken place over the past decade in their country.

Like 0


Rupert said:
19 April 2011 @ 13:42

I have never read an article that negative and misinformed, who allows you to spread such b********?

Keith said:
19 April 2011 @ 14:00

Thank you for your comment Rupert. The article may be negative, but that is how many victims of Bank Guarantee abuse feel.

But how exactly do you consider it to be misinformed? Perhaps you can explain in a little more detail.

Kind regards


goodstich44 said:
19 April 2011 @ 14:10

I hope the comment from Rupert refers to the complete rubbish spouted by S.R Blanco, the Spanish development minister. What a kick in the teeth to the huge amount of people cheated ultimately by the Spanish government for allowing corruption, lack of regulation, non implementation of law and hideous court delays to name but a few of the failures of the Spanish system that's robbed many people of huge amounts of time and money.

Until so many cheated are compensated for their losses and downright daylight robbery by the Spanish government, and the whole property industry and justice system is changed to one that can be trusted, then any roadshows promoting Spain's property industry will not be welcome, and will be dissrupted whenever possible. They are nothing but a lie and an insult in the current climate.

Sandra said:
19 April 2011 @ 14:15

Yes please Rupert, an explanation of your statement and perhaps an apology to Keith and all those victims of the abuses which you so scathingly regard as b*******.


Anne said:
20 April 2011 @ 08:56

Keith is totally justified to query the statement “Come here calmly and trust in the system that we have and the transparency we provide” .

There is no transparency, just a continual denial of the realities to the ongoing abuse that is causing untold hardship and stress to those whose trust has been shattered by the lack of justice in Spain.

In fact I would go further and suggest that we would be failing in our duty by turning a blind eye to these facts, and subject yet more innocent purchasers to these unacceptable risks.

So long as the Spanish government fails to rectify these obscene injustices the message has to remain loud and clear. BUYER BEWARE IN SPAIN.

Anne said:
20 April 2011 @ 13:50

If people think this is negative or misinformed, then to me this implies just how much ignorance exists out there to the realities of the last decade.

The realities are sadly exceptionally stark for many innocent purchasers, as they have been subjected to all manner of abusive activity, now deemed illegal:
· Developers significantly breaching contracts and /or building developments that fell far short of the required standards of workmanship or failed to meet specification as per the contract.
· Agents in league with developers, providing false promises through their marketing literature (this literature is deemed part of the contract).
· Lawyers failure to demonstrate due diligence, providing contracts with abusive clauses.
· Lawyers developers and banks failure to deliver legal Bank Guarantees and contract details as per Law 57/68, to provide consumer protection for offplan purchase.
· Lack of supervision and control of the Spanish banks to ensure Law 57/68 was adhered to.
· Lawyers in league with developers placing undue stress on clients to complete without LFO’s in place, under threat of contract cancellation.

And if that wasn’t enough, when purchasers subsequently fought for their legal rights, many were further exposed to abusive practice.
· Significant court delays, with no timescale constraints in place to ensure that successful judgements were implemented in a reasonable timeframe..
· Developers asset stripping prior to declaring insolvency.
· Justice departments failure to respond adequately to complaints.
· Inconsistent legal judgements.
· Negligent Lawyers obstructing the course of justice by failing to identify banking information relating to where purchasers deposits were placed.
· Banks reneging on bank guarantees.
· Major delays to appeal resolutions further compromising the purchaser.
· Failure to provide timely enforcements or embargoes of developer assets.
And alongside this scenario, we had yet more innocent purchasers subjected to abusive practice (those who had completed on their properties).
· Town halls issuing licences for properties subsequently (retrospectively) deemed illegal by the Junta
· Purchasers subjected to illegal demolition of properties whilst legal action remained outstanding, used as pawns in the fight between regional and local authorities.
· Spanish government’s failure to ensure compensation in place for those unfairly compromised by these internal political conflicts.

And these are just a few of the scenarios that innocent purchasers have been subjected to, as many still await recompense after several YEARS of delays, that continue to compromise the application of law as per successful legal judgements.

It’s heartbreaking stuff and certainly not misinformation.

If anyone requires further evidence then see MEP Roger Helmer’s plea to the petitions committee within the EU parliament.

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