The law obliges the Developer to arrange either a bank guarantee or surety insurance designed to protect buyers of properties under construction who advance monies to the developer before the construction is completed. This insurance protects the buyer of a property against the risk that, if the property is not built within the agreed period, they may lose the amounts they have advanced to the developer.
Developers who receive advance payments from buyers before completing and handing over the property.
- This type of insurance is compulsory for property development, so not only does it provide security and peace of mind for the developer, but it also complies with the regulations.
- This insurance comes into force from the date of signing the purchase contract between the developer and the buyer, and ends after obtaining the legal documentation to hand over the property.
- It is compulsory according to Law 38/1999 of 5 November on Building Regulations.
- It offers peace of mind and security to the buyer NOT the developer.
It consists of a surety insurance that guarantees the return of the amounts paid on account, plus the legal interest in force, in the event that the Developer does not comply with his obligation to deliver the property, with the corresponding legal documentation.
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