All downpayments made to developers prior to completion are secured either by bank guarantees or insurance policies. Non-compliance by the developer may result in hefty fines. The bank guarantee will be handed over in exchange for the cheque paid to them.
Alternatively, they should provide you with a copy of the general insurance policy that should include a specific bank account where to pay in these monies. Insurance companies decline responsibility if this requirement is not met. With regards to the mortgage, a bank will not ask for as much documentation as they do when you apply directly. There is a higher degree of flexibility given that you have proven you capability by paying 50% of the purchase price of the property, and also the developer will press on the bank to allow clients to take over the existing mortgage (otherwise, the developer will have to cancel the mortgage incurring in extra costs).
In fact, on behalf of many of my clients, a simple notification to the bank that we wish to take over the existingdebt on the property sufficed. Normally, the developer´s contract, if well worded, should leave this possibility at the discretion of the bank. If not, loopholes in the contract may allow you to withdraw from the deal if the subrogation is not approved.
