Types of deposit (CC art. 1454)
The Civil Code distinguishes three types:
- Confirmatory: they reinforce performance. They do not allow withdrawal; the defaulting party also pays damages.
- Penitential (CC 1454): the buyer may withdraw losing them; the seller may withdraw returning double.
- Penal: in case of breach, the performing party keeps the deposit as a penalty.
If the contract does not specify, case law interprets them as confirmatory unless otherwise proven.
The mandatory guarantee of payments on account
Act 38/1999 AD 1 (as amended by Act 20/2015) obliges the developer to guarantee all amounts paid on account before delivery. The guarantee must be a bank guarantee or surety insurance and individually identify the buyer.
Absence of guarantee is a serious infringement (fineable up to €60,000 per unit under regional consumer rules). More importantly: it entitles the buyer to terminate the contract.
How to recover payments
Three usual routes:
- Against the developer: if delivery does not happen on time, send a pre-litigation letter and terminate for breach (CC art. 1124).
- Against the guarantor/insurer: the direct action against the guarantor does not require a prior declaration of breach by the developer; contract + expired deadline + termination notice is enough.
- Against the deposit bank: if the payments were placed in a special account, the bank is jointly liable if it failed to verify the guarantee.
Time limits
The claim for the amounts prescribes after 5 years from when it could be exercised (CC art. 1964), unless a shorter period is agreed. The action against the guarantee follows the policy's terms.
Typical cases
- Developer that does not deliver and does not return the deposit: guarantee trigger.
- Buyer who wants to withdraw before signing the deed: depends on deposit type.
- Material change of project (specs, surface): triggers termination without losing payments.
- Insolvent developer: enforcement of the guarantee against the bank.
Frequently asked questions
If I signed reservation and regret, do I lose the money?
Depends on the contract. If penitential deposit, yes (but only that). If confirmatory, you may also owe damages. Review it before notifying withdrawal.
Can the developer deny the guarantee?
No. It is mandatory. If they deny it, it's a red flag for a bigger issue. Consider terminating.
How long does the bank take to pay the guarantee?
30 to 90 days from documented claim, depending on the bank. If they delay, default interest can also be claimed.