Bank Guarantee vs. Surety Insurance: How to Protect Your Clients’ Deposits?
What’s the Real Shield for Your Buyers?
Many developers don’t realize that the law requires deposit protection not only through a special account, but also with a guarantee. Not knowing this can lead to legal breaches, project delays, and client claims.
Three Tools Serving the Same Purpose
According to Spanish regulations (Law 57/1968 and the LOE), developers must implement three key safeguards:
- A Special Account to securely hold advance payments.
- A guarantee, which may be a bank guarantee or surety insurance.
Informing buyers in the purchase contract that their money is protected.
What Is a Special Account and What Is It For?
It’s a segregated account where only the deposits from buyers are kept.
Functions of the Special Account
- Funds are separated from the developer’s general finances.
- It’s tied to a specific real estate project.
- It’s only used for construction-related expenses.
Example: If a buyer deposits €15,000, that amount is held in the project’s special account until the construction starts.
What Is a Bank Guarantee for Developers?
It’s a formal commitment from a bank to refund the buyer’s deposits if the property is not delivered.
Bank Guarantee Features
- Requires collateral.
- Medium to slow processing time.
- Impacts the developer’s credit rating (CIRBE).
An insurance policy that guarantees the refund of advance payments if the developer fails to deliver the property.
Surety Insurance Advantages
- No CIRBE impact.
- Flexible risk and credit analysis.
- Faster issuance and more adaptable to project needs.
Key Comparison: Bank Guarantee vs. Surety Insurance
| Aspect | Bank Guarantee | Surety Insurance |
|---|---|---|
| Guarantees | Advance Refund | Advance Refund |
| Issued by | Bank | Insurance Company |
| Estimated Cost | 1 % - 3 % anuallly | 1 % - 2 % anually |
| Financing Impact | High, affects CIRBE | Low, doesn't affect CIRBE |
| Processing Time | Medium-slow | Agile |
| Flexibility | Lower | Higher |
| Conditions | Collateral Guarantees | Risk Analysis |
Note: Conditions depend on project stage, financials, and insurer review. In general, surety insurance is more flexible and cost-effective, although some banks push their own guarantees.
Why Use Both: Special Account + Bank Guarantee or Surety?
Because the law requires both elements:
The special account protects the deposit.
The guarantee (bank or insurance) secures the return of funds if the project fails.
🧠 Example: If something goes wrong, the bank or insurer returns the buyer’s money.
Costs and Considerations for Developers
- Special Account: Preferential conditions via Acreciente Capital.
- Bank Guarantee: Usually affects financing and credit capacity.
- Surety Insurance: Generally faster, more flexible, and with no CIRBE impact.
💡 The smartest strategy is to comply with both and ensure full deposit protection.
Conclusion – The Best Guarantee Strategy
The ideal combination is a Special Account + Bank Guarantee or Surety. It protects your buyers, complies with the law, and offers financing flexibility.
At Acreciente Capital, we help you:
Open your special account.
Choose and contract the right guarantee.
Comply with all legal and financial requirements.
Do you have questions about protecting your clients’ deposits?
Contact Us
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