off plan property for sale in spain - legal article offering advice ...

[?] Subscribe To This Site

buying off plan property for sale in spain ...
the aval bancario

Those of you considering buying off plan property for sale in spain will find the following article - by lawyer María of costaluzlawyers.es - of great interest.

Over recent years, there has been a tremendous surge of property development and buying off plan spain.

Believe it or not, most Spanish builders and developers are basically honest.

However - as is a well-advertised fact - there is the odd rogue and disasters can and do occur.

Whenever spending a large amount of money, it´s always wise to gen up about facts and your legal rights.

In her article, María kindly explains about the developer´s Aval Bancario or Bank Guarantee and how it can protect you, the buyer ...

buying off plan property for sale in spain - aval bancario

The Aval Bancario (Bank Guarantee) or Insurance Contract were both established by a 1968 Law to protect buyers in off plan developments.

The developer must guarantee the devolution of the deposited amounts plus 6% of annual interests rates, through an insurance contract or by bank guarantee, for the cases when the construction doesn't start or doesn't finish in the agreed time.

They also need to open a special bank account for your amounts (different from the general one of the developer) and have it expressly written in the contract.

In those contracts where the parties agree on anticipated amounts, the developer must expressly state:

a) That the developer will give back to the buyer all the advanced
amounts plus the 6%, in cases where the construction fails to
start or end within the agreed deadline, or the certificate of
habitability is not granted.

b) Reference to the bank guarantee or insurance contract,
indicating the name of the Bank or the Insurance Company.

c) Specification of the Bank or financial institution and the
account number where the buyer's money is deposited.

At the signing of the contract, the developer will give the buyer the document that contains the guarantee (the Aval or the Insurance Contract) and the document must have a reference to the amount that is anticipated.

If the deadlines for starting or finishing are not met, the buyer can choose between cancelling the contract with the devolution of advanced amounts plus 6% annual rate, or to concede a time extension, which will be stated in an additional clause in the contract, specifying the new deadline with the date for finishing the construction and completion.

The insurance contract or the bank guarantee together with the document that fully proves that the work has not been started or that the completion deadline has not been met nor complied, will have executive power as it is stated in the Title XV of Book II of Civil Procedure Law, to demand from the insurance company or the bank, the amounts that the buyer is entitled to, without prejudice of any other given rights also applicable.