"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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Ley 57/68 in English
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Taking legal action according to LEY 57/68 against the Bank or Savings Bank who accepted your off-plan deposit
is a relatively new course of action.

Previously, in cases where the developer had defaulted on the contract Lawyers had been advising their clients without
Bank Guarantees to take legal action only against the developer.  That course of action is fine in the case of solvent developers
who have the funds to refund the purchaser. However, in many cases we find that the legal action ends with the Lawyer winning
the case against the developer only to find that due to the delays in the court process the developer has had time to either
move all the assets out of their name or have gone into Administration or Liquidation during the trial.  Therefore, the purchaser
has little chance of ever receiving a refund from the developer but is still responsible for the payment of a large legal
fee to their Lawyer.  The Lawyer justifies the fee by stating that they won the case.  Unfortunately the only real winner in this
scenario is the Lawyer.

However following a deeper study of LEY 57/68 which has taken place over the past 2 years, it is possible, under certain
circumstances, to take action against the Bank or Savings Bank who accepted the off-plan deposit.  But for a number of
reasons there are still very few Lawyers willing to take this course of action.  One explanation could be that some Lawyers
have a poor understanding of LEY 57/68 and are unwilling to carry out the required research and study of the case
law regarding LEY 57/68.

The FINCA PARCS ACTION GROUP are currently taking this course of legal action against the Savings Bank who accepted
the off-plan deposits at the Las Higuericas Finca Parcs development and failed to either issue the legally required Bank
Guarantees or to verify the existence of Bank Guarantees to protect and secure the off-plan deposit funds in their custody.
You can read more about the FINCA PARCS ACTION GROUP by clicking HERE.

If you were never provided with the legally required Bank Guarantee and wish to establish whether you have a possible
case against the Bank or Savings Bank who accepted your off-plan deposit you will first need to confirm the following information:

1.  To whom did you pay your off-plan deposit - was it to the agent, to your Lawyer or direct to the developers Bank Account?

2.  If you paid to the agent or Lawyer you will need to get a signed and stamped receipt from them detailing the name of
the developers Bank and the account number to which they sent the deposit funds on your behalf.

3.  If you paid the deposit to your Lawyer you should also ask them if they verified that the developers Bank account to which
they sent your deposit funds was a Cuenta Especial and complied with the requirements of LEY 57/68.  You should also
request copies of all letters and correspondence sent by the Lawyer to the Developer and Bank demanding that the
Bank Guarantee be issued.

4.  If you paid direct to the developers Bank Account you will need to have receipts for the payments together with a copy
of the document provided by the Agent, Developer, Lawyer or Bank giving instruction as to where the funds were to be sent.
You should also write to the Bank and ask them to confirm the status of the account into which they accepted your off-plan deposit.
Ask them if it is a Cuenta Especial or a Cuenta Corriente.

5.  It would also be useful to have information to show whether the Bank or Savings Bank who accepted your off-plan deposit
were the sole financial entity funding the project or were there other Banks or Savings Banks involved in financing the
developer and the project.

6.  You should also have a copy of your Sales Agreement and any Sales Literature from the developer, agent or Lawyer
which makes reference to the fact that Bank Guarantees would be issued by a particular Bank or Savings Bank.

7.  It would also be useful to know if the Bank or Savings Bank who accepted your off-plan deposit did in fact issue Bank
Guarantees to any other purchasers on your development.  If they did then further research on this issue can be undertaken.


If you are considering action against the Bank or Savings Bank according to LEY 57/68 then discuss this matter with your
Lawyer and see if they are willing to take this course of action.  It may also be useful to ask the Lawyer if they have other clients
in the same situation on the same development.  If they do then it would make sense to form an action group and negotiate
lower fees from the Lawyer based on the number of purchasers in the group.

If the Lawyer does not have other clients from your development then it may be possible for you to contact other buyers
who were not provided with the legally required Bank Guarantees on your development via internet forums etc and form an
action group that way.

If it is not possible to form a group action then of course you can consider taking individual legal action against the Bank or
Savings Bank who accepted your off-plan deposit.

The most important aspect is to ensure that the Lawyer you appoint has a full understanding of LEY 57/68 and that they
have experience in preparing these kind of cases against the Banks and Savings Banks.  In the last 2 years there has
been a huge increase in the number of court cases regarding Bank Guarantees and LEY 57/68.  Many of these cases can
be used as a reference to provide additional case law to support your legal action.  However it is up to your Lawyer to
carry out the relevant research in this regard.


If you currently have a Lawyer and are in the process of taking legal action solely against the developer then you should
discuss with your Lawyer the possibility of starting action according to LEY 57/68 against the Bank or Savings Bank who
accepted your off-plan deposit.


If you currently have a Lawyer and they are advising you that you are unable to claim on your Bank Guarantee because it
has an 'expiry date' and has now expired, please refer them to LEY 57/68 Article 4 which states:

"Expedida la cedula de habitabilidad por la Delegacion Provincial del Ministerio de la Vivienda y acreditada por el promotor
la entrega de la vivienda al comprador se canceleran las garantias otorgadas por la Entidad aseguradora o avalista"

Once the Certificate of Occupancy is issued by the Provincial Delegation of the Ministry of Housing and given by the
promoter of the housing to the buyer the rights guaranteed by the insurer or guarantor will be cancelled"

Therefore, according to the above article a Bank Guarantee must not have an expiry date.  It only expires when the
Certificate of Occupancy / Licence of First Occupation is issued to the developer by the Town Hall and given by the
developer to the buyer.


If you were provided with a Bank Guarantee which you are now in the process of executing with the issuing Bank or
Savings Bank and your Lawyer is advising you that the Bank will not issue a refund due to the fact that you only have a
photocopy of the Bank Guarantee and not the original, please refer your Lawyer to the following:

As stated in the 2008 Banco de Espana Claims Service report:  If the purchaser is in possession of a Photocopy of the
Bank Guarantee and renounces all legal rights attached to the original version of the Bank Guarantee, the financial entity
must honour the Bank Guarantee on production of the Photocopy.

Your Lawyer will need to make a claim to the Banks Defensor del Cliente department and if they are unwilling to issue a
refund based on the photocopy of the Bank Guarantee then your Lawyer should report the matter to the
Banco de Espana Claims Service.

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.

Please click below to visit other websites / pages that may be of interest


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