The bank guarantee, a (false) security?

Does your bank not pay out the amount of the bank guarantee? It has recently come to my attention that there are banks in the Netherlands, which, despite the fact that a landlord makes a request for payment of an amount under a bank guarantee, do not immediately and upon first request pay it out.

There is a bank guarantee which states that, at the first call of the lessor or his assignee, payment will be made. Nevertheless, there are banks that apparently find this text unclear and do not immediately proceed with payment.

Bank guarantee returned

In two cases I was recently faced with, it was argued by the bank that the bank guarantee had been returned and that for that reason the bank guarantee could not (no longer) be invoked. The bank ignored the fact that the bank guarantee had not been returned by the landlord or assignee, but by the tenant himself. A standard bank guarantee does not stipulate that the return of a bank guarantee by a tenant would result in the landlord no longer being able to claim payment of the bank guarantee. Thus, the bank must simply pay the landlord if the landlord requests it.

Submit original bank guarantee

In both cases, it was also argued by the bank that an original bank guarantee had to be shown in order to claim payment under the bank guarantee. This argument by the bank is also incorrect. In both cases, the bank eventually realized that it was "an entitlement" and that it was not necessary to show an original bank guarantee. What matters most is that the bank checks that the person claiming payment under the bank guarantee is at that time the lessor or assignee and therefore can and may claim payment. Nothing more and nothing less.

In one of the two cases, it was even necessary to issue a subpoena in order to obtain payment of the amount under the bank guarantee. Only then was payment made by the bank.

Conclusion

If your bank also refuses to make immediate payment when you as landlord request payment under the bank guarantee, do not let the bank fool you. Take timely action so that you still receive the amount to which you are entitled as lessor.