If you have appointed no lawyer then it will be up to yourself to request it from the developer.

The developer in turn will arrange with the bank underwriting the whole development or with an insurance company the set-up of these bank guarantees.

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A bank guarantee should be individualised for each particular purchaser.

It should include the following: Law 57/1968 rules the protection of stage payments in off-plan properties.

Not long ago it was normal to obtain a significant discount (premium) on buying off-plan as you assumed a risk (mainly the uncertainty of the property ever being delivered and the time elapsed until completion) until the unit was ready to be delivered legally (with a Licence of First Occupation).

Many took advantage in the boom selling on these properties for a sizeable profit prior to completion (also known as flipping) as it was basically a leveraged investment which only required a fraction of the funds paid up front.

In other words, a bank guarantee cannot be issued prior to handing over the stage payment to a developer as some people are advocating publicly.

This just shows a lack of understanding, however wishful, on how the system works. In this particular case in which a person has bought a plot of land and they are building their own detached villa the Building Act regards them as self-developers.

Bank guarantees are issued normally 30 or 40 days after you have made the down payment they are securing.

Naturally a bank cannot issue a bank guarantee if you have yet not paid the stage payment.

Regrettably we have witnessed over the last months how some financial institutions are in fact refusing to honour bank guarantees.