Aval Bancario Spain & seguro de caución
Anyone transferring money to a Spanish developer is paying for something that does not yet exist. Spanish law knows this risk — and requires protection from the very first euro.
Author & regulatory separation. Content author: Siegfried Perini. Mortgage brokerage in Spain and Portugal is carried out under the §34i GewO licence held by Olga Nikushkina — BAFA-notified for Spain, in Portugal through a locally licensed intermediary. This information does not replace legal or tax advice.
What happens to my instalments if the developer becomes insolvent?
Properly secured payments come back to you; unsecured ones generally do not. Spanish construction law requires every payment a buyer makes before completion to be covered from the first euro, either by a bank guarantee (aval bancario) or a surety insurance policy (seguro de caución). The money must also be paid into a dedicated account restricted to that development. The practical mistake happens earlier than most buyers expect: the reservation fee and the first instalment are transferred before the guarantee document exists, and precisely those amounts are then unprotected. Ask for the original document showing your name, your unit and your amount before you pay anything. If it is not available, that is not a formality being sorted out later — a development that cannot produce the cover may not have arranged it at all, and your money is then sitting in a company account rather than in a secured position.
What must be secured
The basis is the Ley de Ordenación de la Edificación (LOE 38/1999) as it stands today. It obliges the developer to secure every advance payment made by the buyer — by bank guarantee (aval bancario) or surety insurance (seguro de caución).
Protection applies from the first payment after the private contract, not from some threshold amount. The funds also belong in a dedicated account that may only be used for the construction costs of that project.
If the property is not completed, or not completed on time, the buyer can reclaim the sums paid — from the guarantor or insurer, not from the developer's insolvency estate. That is the entire point of the construction.
What must be on the table before the first instalment
- Guarantee or insurance certificate issued in your name — not to the project in general.
- Cover for the full amount of the planned instalments, not just the first.
- Building licence (licencia de obra mayor) granted and in force.
- The dedicated account named in the contract.
- Completion date with a delay clause and a right to withdraw after a defined overrun.
Missing protection is not a formality — it is the reason not to pay. A developer who cannot produce it has told you more about the project than any brochure.
The link most people miss
If the developer instalments are raised by borrowing against German property, then an unsecured project puts not only the deposit at risk but also the German property charged for it. The exposure doubles, quietly.
That is why we treat the protection check as part of the financing decision, not as a legal footnote. The legal review of the contract itself belongs with a Spanish lawyer — we do not replace legal advice.
Frequently asked questions
What is the difference between an aval and a seguro de caución?
Does protection cover the reservation fee?
How long can I reclaim?
Do you review the developer contract?
More on the construction phase
Timing: mortgage approval after 24 months of construction
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Timing: mortgage approval after 24 months of construction →New-build or resale? What actually differs
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New-build or resale? What actually differs →Checklist: what must be checked before the first instalment
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Checklist: what must be checked before the first instalment →Why Spanish banks do not finance the construction phase
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Why Spanish banks do not finance the construction phase →Financing the instalments to the developer
Go to page.
Financing the instalments to the developer →New-build in Spain — let us work through the construction phase together
I check which part of the price has to come from your own funds, what a German bank can raise against existing property, and what the Spanish bank takes on at completion — free of charge, no upfront cost.