- The legal question
- Practical consequences
- Applicable doctrine and key arguments
- Territorial application: Costa del Sol and Andalucía
- What to do if your case fits
- FAQ
The legal question
Until now it was common for guarantor banks, faced with a developer insolvency, to argue that the insolvency proceedings suspended the accrual of interest under art. 152 of the consolidated Spanish Insolvency Act. This thesis left the buyer with the principal refunded but losing, sometimes, thousands of euros in accumulated interest.
The Málaga Provincial Court consolidated in 2024 a contrary doctrine: the suspension of interest under insolvency law applies to the bankrupt debtor (the developer), not to the guarantor, who is a separate party with its own matured obligation.
Practical consequences
For a buyer with payments on account to a developer in insolvency:
- Principal: what was paid, secured by the guarantee.
- Statutory interest from each payment to effective refund, without interruption from the insolvency.
- In cases with several years of waiting, interest can represent 20-40% of the principal.
In the ruling discussed by the Málaga Court, interest accrued from the dates of payment (years before the insolvency) until the refund of the amounts was enforceable in full against the guarantor.
Applicable doctrine and key arguments
The legal arguments we use when claiming against the guarantor:
- The guarantee is an obligation independent of the principal debtor's (CC art. 1.823).
- The suspension of interest under art. 152 of the Insolvency Act applies to the insolvent party, not to jointly liable third parties.
- Spanish Supreme Court doctrine (First Chamber) on the nature of the Act 20/2015 guarantee.
- Consumer protection principle of RDLeg 1/2007.
Territorial application: Costa del Sol and Andalucía
The Málaga Court doctrine applies directly to all proceedings before Málaga courts (capital and judicial districts: Marbella, Estepona, Fuengirola, Mijas, Torremolinos). Elsewhere in Andalucía (Seville, Granada, Cádiz, Almería, etc.), the doctrine is persuasive and consistent with the majority Supreme Court line.
What to do if your case fits
If you have amounts paid to a developer in insolvency (common in paralysed Costa del Sol projects from 2008-2014 and again in some 2023-2025 cases):
- Identify the guarantor (bank or insurer).
- Demand by pre-litigation letter the principal + interest from each payment date.
- If the guarantor tries to limit to the insolvency date, sue with support from the Málaga Court doctrine.
- Claim costs: the costs award is usually objective if the entity opposes a consolidated doctrine.
Frequently asked questions
Is it applicable if the proceedings are heard outside Málaga?
Málaga Court doctrine applies directly to Málaga courts. Elsewhere, it is persuasive. Spanish Supreme Court case law (consolidated) closes the question in favour of the buyer in any Spanish court.
How much can interest represent in figures?
On a €60,000 payment made 7 years ago, statutory interest can add €12,000-€18,000 depending on the year's rate. Figures vary with current rates and specific calculation.
Source: Ley57.com / Economist Jurist (2024) — Málaga Provincial Court: bankruptcy does not suspend guarantor interest.
