What is a Bank Guarantee
As the term ‘Bank Guarantee’ is used a lot on the site, we occasionally get asked the question, ‘What is a Bank Guarantee’? It is a document from a bank guaranteeing funds that you have transferred into a bank account for the purpose of purchasing an off-plan property. It is normally related to purchasing off-plan property in Spain. In some other instances, it can refer to off-plan property purchases in Morocco or Portugal that were sold by Spanish developers. This is the case with the sample bank guarantee below which is for a property in Alcudia Smir, in the resort of Saida in northern Morocco. The development was being sold by Spanish developer Fadesa (now Excelia). Fadesa traded as a Spanish company (even when selling in Morocco), took funds into its Spanish bank accounts and issued Spanish Bank Guarantees.
It should be noted that most banks put an end date on their guarantees, which is not legal. In court the end date of the guarantee will be ignored as the whole purpose of the guarantee was to protect the purchaser in the event that the builder failed to construct the property.