You build. You sell off-plan. Guarantees make it possible.
The developer needs a buyer deposit guarantee to collect advance payments from purchasers. The contractor needs a bond that opens doors to private contracts without blocking credit. Both can be achieved with a surety bond in 72 hours. No bank guarantees. No credit risk register impact.
Issuance of any sector guarantee
valid for off-plan sales
impact on credit risk register or capital
European countries covered
Bonding for Real Estate Developers
Companies whose activity involves residential development are required to provide guarantees to their buyers in order to carry out their sales activity.
A surety bond or bank guarantee is mandatory by law for any individual or legal entity undertaking a residential development.
By opting for a surety bond, developers can guarantee the advance payments made by purchasers in the event that the development is not completed or fails to meet the agreed construction deadlines.
This requirement is governed by national legislation transposing the principles of consumer protection established under the EU Consumer Rights Directive (2011/83/EU). In Spain, the applicable legislation is the Building Regulation Act (Ley de Ordenación de la Edificación — LOE, 5 November 1999) and related provisions.
Decennial Insurance
The LOE establishes the individual civil liability of each party involved in the construction process for material defects in the building. For residential developments, Article 19 of the LOE requires the developer to take out decennial insurance, covering material defects in the building for ten years from the date of practical completion.
In the broader European context, developer liability for construction defects is further supported by the Construction Products Regulation (EU) 305/2011, which sets common standards for the performance and safety of construction works across all member states.
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Which sectors use Surety Bonds?
Surety bonds are multi-sector instruments that can be used across all industries.
It is an alternative to the bank guarantee, offering greater advantages and enhanced flexibility.These are the sectors we commonly work with
Administrative Concessions
Guarantees for the management of long-term administrative concessions of public services.
Renewable Energy
Grid connection bonds and decommissioning guarantees for any renewable energy installation.
Mining
Environmental restoration, waste, exploitation and concession guarantees for mining operations.
Environment
Environmental restoration guarantees required by law.
Construction & Real Estate
Buyer deposit guarantees and decennial insurance.
Private Security
Guarantees required by national competent authorities without affecting banking exposure.
Customs & Import/Export
Guarantees on payment of tariffs and VAT before the Customs and Special Taxes Department.
Gambling
Administrative bonds for gaming licences.
Advantages: Surety bond
Your liquidity, intact
No financial resources are tied up. The money stays in your account doing what it should: financing your business.
Off the Bank Risk Report
The surety bond does not count as bank risk. Your rating and your financing capacity are not affected.
Response in 48-72h
We operate in 30 countries. A single signature for all your markets. We do not miss deadlines. When the specifications require 5 days, we deliver in 3. Study, response and issuance.
Coverage in 30 countries
A single relationship with Sammy Free covers you in any country of the European Economic Area. Without looking for a local broker every time.
Specialists, not generalists
We only do surety bonds. Not car insurance, not life, not home. Only surety bonds. This focus makes the difference.
Plafond: issue without waiting
With your pre-approved line you can issue new guarantees in a matter of hours. One analysis a year, unlimited tenders.
What documentation is required to apply for a surety bond?
The documentation required varies depending on the insurer and the type of operation, but generally includes information on the company’s financial, fiscal and legal situation, together with documentation related to the contract or tender (specifications, award notice, etc.).
How Much Does a Surety Bond Cost?
The cost of a surety bond depends on several factors that determine the level of risk involved:
- The company’s financial strength
- The type of bond required (bid bond, performance bond, advance payment bond, etc.)
- The amount and duration of the bond
- The company’s track record
- The country where the bond will be issued
- The company’s technical and operational capacity
- Market conditions
If you would like to learn more, read our article on the factors that influence surety bond pricing.
Can a surety bond replace a bank guarantee?
Yes. Both surety bonds and bank guarantees are valid instruments for securing a contract, and either can be used.
The key difference lies in the financial impact on your business:
- Bank guarantee: uses part of your banking capacity and ties up liquidity or assets as collateral.
- Surety bond: does not affect your banking capacity and does not tie up capital.
Discover all the advantages of surety bonds compared with traditional bank guarantees.
How long does it take to issue a surety bond?
It depends on whether you already have a Plafond (pre-approved bonding facility) in place with the insurer or not:
- With a Plafond line: issuance is same-day, as the company has already been assessed and approved.
- Without a Plafond line: the required documentation must be submitted (financial statements, legal documentation, tender documents, etc.). Once received, you will normally receive a quotation within 48 hours.
Do you also arrange guarantees between private companies?
Yes. Surety bonds can be used both in contracts required by public authorities and in agreements between private companies.
- With public authorities: they are required by law to accept a surety bond as a valid form of guarantee, unless the tender documents state otherwise.
- Between private companies: both parties must agree on the type of guarantee accepted. Both a surety bond and a bank guarantee are acceptable where there is mutual agreement.
What types of guarantees do you arrange?
We arrange all types of surety bonds. The most common are:
- Bid Bond: to participate in public tenders and procurement processes.
- Performance Bond: to guarantee performance of the contract once awarded.
- Advance Payment Bond: when a company receives an advance payment and must guarantee its repayment if contractual obligations are not met.
- Maintenance Bond: provides cover during a defined period after completion, ensuring that the works have been carried out correctly and covering potential defects in materials, workmanship or design that may arise at a later stage.
- Retention Bond: replaces amounts retained by the contracting authority until completion of the contract. It avoids the retention of funds from certified interim payments due to potential defects.
If your situation does not fit exactly into any of these categories, contact us with no obligation and we will find the most suitable solution for you.