Bank guarantee is a guarantee that a financial institution provides on behalf of a client, ensuring the fulfilment of an economic obligation to a third party. In real estate terms, this figure is particularly relevant as it allows the amounts delivered during construction to be guaranteed, avoiding any risk, in the event that the promotion does not begin or delivery is not successful for any reason within the time agreed by the parties.
How the bank guarantee works
Is a legal obligation that derives from the Law 38/1999 of Planning of Building, amended by Law 20/2015, the developers are obliged to guarantee the amounts that the buyers deliver on account during the construction of their house, thus if the construction does not start or is not completed within the agreed time, the buyer may claim a refund of the quantities delivered. In the event of default, the bank or insurer is responsible for returning the amounts delivered to the account of the buyer.
The bank guarantee can be replaced by a hedging policy, The Commission’s proposal is that the European Union should be able to provide a guarantee for the amount of money paid out in advance, not only for the amounts paid during construction as stated in the sales contract but also for taxes and legal interest from the time payment was made until the date on which delivery is due.
It remains in force until a first occupancy license or equivalent document is issued, as in our case the responsible statement issued by the Technical Director of the work, which certifies that the delivery of the home to the buyer can proceed.
Advantages of the bank guarantee in the sale of real estate
Below, we tell you the main benefits that have a bank guarantee to be able to acquire your home, or rent a space.
Security
One of the main benefits of bank collateral is the security it offers. It is a sale, the buyer ensures that will have its payment agreed, as the bank will respond if the seller fails.
Is a bank guarantee or a safety net policy always necessary?
Yes, it is a legal obligation that the new developer must comply with.
At Myramar, we are real estate experts with over 60 years of history helping people find their ideal home.
Whether you are looking to buy or rent, contact us for personalized advice and know the best options to formalize the transaction safely. We can help you find your dream home!
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departamento.inmobiliaria@myramar.com