Editorial transparency and use of artificial intelligence
This article forms part of the CostaLuz Lawyers blog and is published for general informational and educational purposes only. It was prepared with the assistance of artificial intelligence tools and, before publication, was substantively reviewed and editorially approved by Maria de Castro, a Spanish-qualified lawyer registered with the Cádiz Bar Association under number 2745, founder of CostaLuz Lawyers and the person responsible for the editorial review of the published content.
This article does not constitute legal, tax, immigration, employment, estate-planning or investment advice and does not replace an individual assessment and the professional work of the appropriate CostaLuz Lawyers specialist. No action or omission should be based solely on this information.
Law 57/1968 / Law 20/2015 – Bank & Insurance Claims Explained
An established legal practice, not a recent service
We are not a new law firm or service created following the Supreme Court rulings on Law 57/1968.
Our work in this area began in 2008, when we started researching the liability of banks involved in off-plan property developments. In 2011, we filed our first lawsuit against a developer’s bank, which resulted in a landmark judgment in 2012, well before the Supreme Court doctrine was consolidated.
Since then, we have handled hundreds of off-plan deposit recovery claims. We are recommended by the UK and Irish Embassies and by multiple professional legal bodies within Spain.
Important legal update (2026): Law 57/1968 and Law 20/2015
The consumer protections traditionally referred to as “Law 57/1968” are no longer applied today as a standalone statute in the same form as when originally enacted.
Those protections were integrated into the current legal framework, particularly through Law 20/2015, which reorganised the system of insurance policies and bank guarantees required to protect off-plan buyer funds.
However, the extensive Supreme Court doctrine developed under Law 57/1968 remains fully relevant, and courts continue to rely on that jurisprudence when assessing the liability of banks and insurers. For this reason, both professionals and courts still commonly refer to these matters as “Law 57/1968 claims”, even though they now sit within the Law 20/2015 framework.
⚠️ ALERT 2026: Buyers increasingly left unprotected by payment structures
Critical warning for off-plan buyers in 2026
We are currently seeing off-plan payment structures that can leave buyers effectively unprotected.
In a growing number of cases, reservation fees and stage payments are structured in such a way that, if a development fails, no clear legal liability attaches to the developer, the receiving bank, the buyer’s lawyer, or the intermediary or agent involved. Buyers may find themselves in a legal vacuum, having paid substantial sums with no effective recourse.
This risk most commonly arises when:
- payments are made before a valid building licence is granted,
- no individual bank guarantee or insurance policy is issued, and
- funds are routed through opaque or fragmented payment structures that dilute responsibility.
Practical rule (2026):
Do not pay any reservation fee, deposit, or stage payment unless the building licence is verified, the payment route is transparent and traceable, and individual legal guarantees or insurance (or equivalent protection) are confirmed before funds are released.
Frequently Asked Questions – Off-Plan Deposit Recovery (2026)
What is the deadline for off-plan claims against banks and insurance companies?
The applicable limitation period depends on the type of protection in place and who the claim is brought against.
- Individual insurance policy:
The limitation period is generally two years, counted from the expiry of the policy. - Individual bank guarantee:
Normally expires after two years, unless a claim is brought against the developer within that period.
If action is taken against the seller in time, the expiry no longer applies and the limitation period becomes five years. - No individual guarantee or insurance:
Where no individual protection exists, the applicable time limit depends on the circumstances and case law.
As a prudent legal strategy, we generally recommend:- action against the developer within two years of breach of the delivery date, and
- action against the bank that received the off-plan payments within five years, where the bank failed to ensure legally required guarantees.
Important clarification:
If there is no building licence and no individual insurance policy or bank guarantee, liability of a guarantor or insurer may not arise, even if a general guarantee exists. Each case must therefore be analysed individually.
What am I entitled to claim back?
In successful claims, buyers may recover:
- 100% of all off-plan amounts paid,
- statutory legal interest, usually calculated from the dates payments were made to the developer’s bank account, and
- legal costs, in many cases, depending on the court’s decision.
Are banks actually paying this money back?
Yes.
Spanish banks are solvent entities and are legally obliged to comply with final court judgments. All banks with firm decisions against them are refunding claimants.
Where the original developer’s bank has merged, been absorbed, or ceased to exist, claims may still be pursued against the successor bank.
How safe is this type of legal action in 2026?
The Spanish Supreme Court has consistently interpreted consumer protection rules originating under Law 57/1968 (now applied within the Law 20/2015 framework) in favour of buyers.
When cases are correctly structured and supported by evidence, the success rate remains very high.
How liable are Spanish banks under this legal framework?
A key Supreme Court ruling in September 2016 confirmed that banks receiving off-plan payments have a duty of oversight and control.
Banks may be liable where they:
- accepted off-plan deposits,
- knew or should have known the payments related to an off-plan development, and
- failed to ensure that legally required guarantees or insurance were in place.
This doctrine has since been reaffirmed consistently.
Does this apply if I bought more than one off-plan property?
Yes, provided that:
- the purchases were not part of a professional or commercial activity, and
- the guarantees were intended to secure the development rather than speculative trading.
Courts assess cases based on economic reality, not merely the number of properties purchased.
Final legal note (2026)
Off-plan deposit recovery in Spain remains a highly technical and fact-sensitive area of law.
Given the payment structures now being used, early legal review before transferring funds is more important than ever.
Independent legal review before payment can prevent irreversible losses.
Contact us to assess your off-plan contract and buyer protections.
About CostaLuz Lawyers and María de Castro
You can read testimonials from hundreds of satisfied clients, going back to 2006, on our website, on Google Reviews and on EyeonSpain.
Reviewed by María de Castro, Abogado no. 2745, Ilustre Colegio de Abogados de Cádiz. CostaLuz Lawyers has supported international buyers since 2006 on EyeonSpain with guidance and advice on the legal aspects of life in Spain. Included in the lawyers lists of the UK and Ireland embassies. Updated 22 Nov 2025.
María Luisa de Castro’s work, founder of CostaLuz Lawyers, is backed by a strong presence in specialist media and professional directories. Her track record as a Property Law and Consumer Real Estate Law (Derecho de Consumo Inmobiliario) specialist can be seen in her guides for international audiences on Expatra, in her long-running blogs on Spanish off-plan protection and Ley 57/1968 on EyeOnSpain , in her legal analysis for Confilegal and Legal Today, and in her contributions for the Spanish Bar Council (Consejo General de la Abogacía Española) and the Centre for Consumer Studies at the University of Castilla-La Mancha.
Her work is also profiled on international retirement and expat platforms such as Retirement Abroad, and has been highlighted by expat media including The Olive Press News Spain and The Local Spain among other specialist expat and legal forums.
Her legal work has also been featured or referenced in respected international and Spanish media, including The Telegraph, The Times, the BBC, El País and El País English, The Local Spain, The Olive Press and other reputable outlets, particularly in connection with landmark court rulings on Ley 57/1968 and Spanish consumer protection.
CostaLuz Lawyers is also included in the official lists of English-speaking legal professionals for British and Irish nationals in Spain, as compiled by the UK government’s “Spain: list of lawyers” and by the Embassy of Ireland in Spain and its honorary consular network.
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Legal Notice: The content on this page is provided for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. No action should be taken based solely on this content without first seeking independent professional legal counsel. Each case requires individual assessment based on its specific circumstances. CostaLuz Lawyers accepts no liability for actions taken or not taken based on this content.
Off-plan purchase gone wrong?
We recover deposits on delayed or failed off-plan purchases under Ley 57/1968. Bilingual help across southern Spain since 2006.