Off-Plan Property Buyers vs. Guarantor Banks: Málaga Court Reinforces Law 57/1968 Seventeen Years After the AIFOS Insolvency
The Málaga Provincial Court (5th Section) confirms the conviction of the guarantor bank and orders the refund of the amounts advanced for the off-plan purchase, plus statutory interest from each payment. We analyse the settled case-law on residential purpose, collective guarantee policies and interest accrual after the developer's insolvency (Supreme Court Judgment 1526/2025).
1. Introduction
Seventeen years after the insolvency declaration of AIFOS Arquitectura y Promociones Inmobiliarias, the Málaga Provincial Court (5th Section) has once again reminded banks that [Law 57/1968](https://www.boe.es/buscar/act.php?id=BOE-A-1968-889) —now replaced by Additional Provision 1 of the [Building Regulation Act (Law 38/1999, LOE)](https://www.boe.es/buscar/act.php?id=BOE-A-1999-21567)— remains fully applicable to contracts signed during Spain's property bubble.
The judgment dismisses the guarantor bank's appeal and orders it to refund the amounts advanced by the buyer, plus statutory interest from the date of each payment, and costs.
At [Bufete Padilla](https://bufetepadillatorrevieja.com/en/contact) we have defended domestic and foreign off-plan buyers on the Costa Blanca and across Spain since 1976.
2. The Law 57/1968 framework
Law 57/1968 required developers to guarantee by means of a bank guarantee or surety insurance the amounts paid on account by buyers before the delivery of the property. Its protective purpose is to shield the buyer against the developer's insolvency.
Although formally repealed by Law 20/2015, it still applies to contracts prior to its entry into force, and its case-law has been carried over into the current AP 1 LOE.
3. Doctrine consolidated by the Málaga Court
3.1 Residential purpose vs. speculative investment
The appellant bank claimed the purchase had speculative purpose, which would exclude legal protection. The Court rejects this and recalls that:
> "Speculative purpose must be evidenced by objective data; it cannot be presumed from the buyer's economic profile or from the existence of other real estate transactions."
This confirms the line of the [Supreme Court](https://www.poderjudicial.es) (STS 420/2016, 675/2016 and 636/2017), which draws a clear line between professional investment and acquisition for personal, family or holiday use.