"There are obligations imposed by LEY 57/1968 on financial institutions - some banks have not acted with diligence"
Source: Banco de España Memoria del Servicio de Reclamaciones 2008 & El Pais Newspaper - August 2008
"New solutions tailored to the present-day problems must be sought"
"Good supervisors should not limit themselves to analysing the present, but should also anticipate possible scenarios
of non-viability that might arise in the future and attempt to reduce problems to a minimum before they emerge"
Source: Miguel Ángel Fernández Ordóñez - Ex-Governor of Banco de España - Speech at Fundación de Estudios Financieros, Madrid, 1 December 2011

“Come here calmly, and trust in the system that we have and the transparency we provide”
Excelentísimo Señora Beatriz Corredor Sierra - Ex-Spanish Housing Minister - February 2011

“Spain's voice must be respected again in Brussels and Frankfurt.  We will stop being part of the problem
and will be part of the solution"
November 2011
"You have before you a President of the Government who will face up to issues and not hide himself away" Interview EFE Agency January 2012
Excelentísimo Señor Mariano Rajoy Brey - Presidente del Gobierno de España - November 2011

Ex-Spanish Prime Minister Mr José Luis Rodríguez Zapatero said in THE EU PARLIAMENT ON 6 JULY 2010:
"My country is based on the rule of law and it respects and ensures that laws are respected.  The courts are responsible for the application of law. 
We stand shoulder to shoulder with those people who, maybe, have had the wool pulled over their eyes in the property sector"

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The banks clearly have a responsibility under LEY 57/68 to ensure that off-plan deposit funds are held in a
Cuenta Especial (SPECIAL ACCOUNT) separate from other funds belonging to the promotor.
The Cuenta Especial may ONLY contain funds for the construction of dwellings.

The banks are fully aware of the status of funds they are accepting in a developers account. For example if you were
buying at Roda - on your bank transfer document you would state - Mr Smith Plot 155 Roda Golf - or words to that effect,
so that the bank and developer are able to identify from which purchaser the funds are from and which plot they are for.
With even the minimum due diligence the Bank would know that the funds are for an off plan purchase and must be held
in the Cuenta Especial. The final sentence of LEY 57/68 Article 1.2 states: "For the opening of these accounts
or deposits the Banking institution or Savings bank, under its responsibility, will demand the guarantee to which the
previous condition refers"

Therefore, the bank who has received the payment, clearly referenced as a deposit for an off-plan purchase, must then demand
or verify that the Bank Guarantee is issued. If the Bank fails to demand the issuing of the Bank Guarantee or fails to
ensure/verify that the Bank Guarantee is issued they are guilty of Gross Negligence as they will be allowing their client,
the developer, to break the law. The Bank will be supporting this illegal activity, because without the Bank it could never have
happened as according to LEY 57/68 Article 1.2 all off-plan deposit funds must be paid into a Bank or Savings Bank Special Account.

Taking the above scenario of Mr Smith again, if Mr Smith was instructed to send his off-plan deposit to the developers
bank and for some reason the developer instructed him to send the funds to the normal current account held by the
developer (CUENTA CORRIENTE) then once those clearly referenced off-plan deposit funds arrive in an account which
does NOT comply with the requirements of LEY 57/68 the Bank with minimum due diligence must either instruct the developer
to transfer the funds to the CUENTA ESPECIAL, return the funds to the purchaser or freeze the funds and report the developer
to the relevant authorities for acting contrary to the requirements of LEY 57/68.

Let's face reality these Banks and Savings Banks who have received the off-plan deposits have been funding the developers
for millions of Euros. With such huge investment in the projects the Banks would be monitoring the accounts and financial
performance of the developer on a daily basis.  The banks would be fully aware of the funds arriving in the developers
accounts and what those funds were for.

However, for years the banks have turned a blind eye and allowed the developers to act illegally by failing to secure
off-plan deposits and failing to issue the legally required bank guarantees.

The Banks & Savings Banks were the 'vehicle' through which the illegal activity operated.

The Banks & Savings Banks who were funding the developers were happy to use purchasers 'unsecured deposit funds'
to lessen the Banks exposure to the various developments.

Many Banks have been grossly negligent and acted with a complete lack of due diligence. They have knowingly allowed
the developers to act contrary to the requirements of LEY 57/68. Many Banks have been complicit in the illegalities
committed by the developers.

Let us remember that without the funding and support of the Banks none of this could have happened.  Very few developers
had the financial history or ability to have raised private finance and commence building without using funds from the Banks.

Furthermore, LEY 57/68 clearly puts an obligation on the Banks.  Article 1.2 demands that the developers "Deposit the sums
advanced by purchasers through a Bank or Savings Bank". The reason the Banks have been mentioned so many times in
LEY 57/68 is to give added security to the law.

The Banks are the guardians of LEY 57/68 and they have an obligation to guard against the potential abuse of the law by
the developers.  If the Banks were not the guardians of LEY 57/68 and did not have the responsibility of ensuring the
off-plan deposit funds were secured in a Special Account, then the 'potentially dangerous' developers would be guardians
of themselves which would leave the law open to fraud and abuse.

Article 2 (c) of LEY 57/68 states that the Purchase Contract (Sales Agreement) must include the: "Name of the Banking
Institution or Savings Bank and details of the account where the deposit funds will be held as a result of the celebrated contract"

Article 5 of LEY 57/68 states: "It is a prerequisite that any propaganda and publicity material issued by the promoter
for the sale of housing containing information on the levying of amounts on account prior to the initiation of construction
or during construction must meet the requirements of this Act, and make explicit reference to the guarantor, as well as the
Bank or Savings Bank Special Account in which they will deposit the amounts advanced. The above mentioned must be specified
in the text of the advertising that takes place"

So at many points LEY 57/68 puts the Banks very much in the spotlight and even any advertising material published by the
developer must make explicit reference to the Bank or Savings Bank Special Account in which the off-plan deposits will be
held and this must also be detailed in the Purchase Contract.

The Banks are the guardians of LEY 57/68 and they have a responsibility to protect the off-plan deposits and ensure that they
and their clients (the developers) are acting in accordance with LEY 57/68 at all times.

The Bank Guarantees Website is a free voluntary service providing information regarding LEY 57/68
and Bank Guarantee Abuse.  Under no circumstances can the Bank Guarantees In Spain Website provide advice
on an individual basis or give an opinion on specific individual cases.

Before making a decision or taking any action with regards to your personal situation we must strongly advise that
you take independent legal advice.

The Bank Guarantees In Spain Website and Petition does not endorse the services of any Lawyer or Law Firm.

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