Those illegal bank Guarantees

Legal tip 174. Those illegal bank Guarantees
04 November 2009 @ 08:17

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, Cantabria, Spain by Lumiago at Flickr.com

Another great piece of info, Maria.

Thanks Tish.

Maria

Hi Maria,

What does this mean for those who have already won their case against the developer for breach of contract but are awaiting the developer's appeal?

Does it mean that they can immediately take legal action against the Bank/Insurer at that point if they were provided with an illegal BG, or do they have to wait until the appeal process is concluded?

At what point would you advocate that legal action is taken using law 57/68? Is this a legal challenge that runs alongside the breach of contract process or is this a last resort legal option?

Would you still advocate that an enforcement order be applied for, following the case win?

Dear Ads:

Let me clarify. I am not talking about a new action but on how everything against Law 57/68 on a Bank Guarantee is null and void and these guarantees are implemented by the terms of this Law.

If you have already won an action for contract cancellation against a developer, you cannot execute your bank Guarantee unless the cashing of the Court decission comes impossible and in that case.... compensation of damages come  into scene:

1. Against Banks who did not secure the Guarantees for moneys being placed in special accounts.

2.Against Insurance Companies of solicitors who neglected when securing the Bank  Guarantee.

Hope this clarifies,

Best regards,

Maria

Thanks for the clarification. It's much appreciated Maria.

Hi Maria

There is no mention of law 57/68 stated on my bank guarantee, does this mean i will not be able to get my money back?

FAR

I would need to take a look on the Guarantee as even not having the terms 57/68 written on, the text can refer to guarantees granted for securing advanced amounts.