The Spanish Supreme Court, in its Rulings 491/2024 and 492/2024, both dated 12 April, of the Plenary Session of the First Chamber, has changed its position on the liability of banks when buyers have made advanced payments for off-plan homes that were not built, and the developer has not guaranteed the repayment of these advances as legally required.

According to the new criterion, banks that receive advanced payments from off-plan homebuyers into the accounts of developers, when they have not required the developer to guarantee these advances by bank guarantee or insurance, are held liable towards the buyers. This is, provided that the financial institution knew, or could have known, that the money was intended for the purchase of off-plan housing for residential purposes.

In this way, the buyer is guaranteed the return of the advanced amounts even when the developer becomes insolvent, since the failure of the developer to comply with the appropriate legal guarantees, and the bank’s failure to investigate whether or not these guarantees existed and to demand them from the developer, cannot be to the detriment of the buyer.