What is Ley 20/15
Essentially the answer to ‘What is Ley 20/15?’ is that it an upgrade to a law (Ley 57/68) which is currently being used to spark the refund of property deposits placed on uncompleted properties in Spain. These refunds can be claimed from the financial institution with which you deposited your funds for the purchase.
This law has been the scourge of the banking and insurance industry for the past year or so, because it has sparked widespread claims for refunds of deposits around the country, particularly from the period from 2002 to 2008 when a lot of property companies ran into financial problems. The cynical among you will no doubt conclude this is swift introduction of a new law which largely protects the financial and insurance industries is no coincidence. We cannot really say, but it does look very convenient.
The big thing to note here is that the new law is not retrospective. In other words, if you signed a contract for a property and paid a deposit before this new law was introduced in January 2016, you can still apply for a reclaim of your property deposit in Spain.
In the main the new law is largely similar to its predecessor, but quite a few changes have been made to the bank guarantee section – which will also raise suspicions with the conspiracy theorists among you.
The main differences are in relation to the sections governing bank guarantees (which were always a legal necessity, although very often not provided in the past). The new law now differs in the following areas:
- Bank guarantees will now be tailored to the specific client
- Bank guarantees will only be valid from the time a Building Licence is obtained from the town hall
- Once the date of completion has passed a buyer can now request a full repayment within 30 days
- A bank guarantee will expire two years from when a developer is in breach of contract
- A purchaser is entitled to a bank guarantee at no extra charge at time of signing a contract
- A refund is limited to the amount actually paid (an attempt to avoid claims on currency fluctuations for foreign buyers)
- Developers must now state compliance with Ley 20/15 on all documentation. Non complinace will lead to fines.
- Cancellation of a bank guarantee can only occur when a Licence of First Occupation is issued and the property is available for physical occupation or if the buyer fails to complete when legally bound to do so.