Surety & Housing

Housing Bonds

Housing bonds are used for money put down as deposits on dwelling purchases, whether paid to private building developers or to housing cooperatives.

HCC Europe has tailored its bonds to respond to the insurance needs of the housing sector and now offers Generic Risk Control services.

Private Building Developers:
Deposit bond insurance is mandatory for all private Spanish building developers, under Act 57/68, of July 27, 1968, the Building Act (or L.O.E.), of November 5, 1999, as well as additional legislation. This type of bond guarantees the refund of the advance payments to the individual purchasers, in case the dwelling is not handed over on time.

This includes the appropriate annual interest stated by law up to the maximum amount for the insured capital laid down in each individual certificate.

Housing Cooperatives:
This type of policy is designed for use in the promotion of housing built in 36 months or less. This is from the time the cooperative is set up to the time the keys are handed over to the new homeowners, allowing for 20 months for construction.

Assuming that the cooperative project is submitted to HCC Europe at the onset, our company first issues a renewable annual policy, guaranteeing the performance of legal and contractual obligations. This remains in force until all technical requirements of the project have been met. With this policy, we ensure that the money the members of the cooperative relinquish to the cooperative will be used fully and solely to pay the costs of the housing project at hand. The benefits of this type of policy are:
• Boosts the level of consumer trust.
• Lays the groundwork for future bonds required by legislation.
• Improves marketing initiatives for the project.

This premium compensation system allows us to reach these objectives without additional costs.

Policy Specifics:
• The cooperative that owns the planned housing development project is the policyholder, and the purchaser named on the individual guaranty certificate is the insuree.

• The special bank account is first audited, and after the mortgage loan has been issued, the account is monitored in order to supervise the cooperative operating account’s money outflow.  Each payment has to be authorized by HCC Europe.

• Once the remaining technical requirements for each case, as well as those required by the Legal and Contractual Obligations Policy, have been met, the policy is canceled and a second policy, with a fixed expiration date, is issued.

• In this second policy, governed by Act 57/68 (Collective Home Deposit Bond Policy), the bond guarantees the deposits submitted by cooperative members, concurrent with the initial estimates of the selling price, as well as their legal interest. The premium payable for each individual certificate is calculated by taking into consideration the actual dates of the payments performed by each cooperative member.

• Once the premium for the new policy and its certificates has been calculated, the net premium (net of surcharges and taxes) charged for the original policy is subtracted in full.

• The deposits paid by the insurees will be placed in a special bank account opened precisely for this purpose, to keep the deposits separate from any other funds held by the same client.

• To provide the insurees with further security, these funds cannot be touched unless bills or certificates approved by the insurance company and signed by its authorized representative before the depositary (depository?) bank are submitted.

Our all-inclusive service means that Experts at HCC Europe’s Technical Housing Department monitor and supervise a project’s progress and audit the account, as required.