Understanding Spanish Snagging and Completion Law

For the last 3 years InspectaHomeSpain have been inspecting new build Spanish properties and with experience of checking more than 3000 properties, we are still amazed how often buyers really don’t understand the Spanish buying process. We are never sure if it’s the sunshine, idyllic surroundings, the relaxed lifestyle, or just the cheap booze, that results in the buyers leaving their brain on the plane and not really knowing what they have bought or the idiosyncrasies of Spanish system.

With the credit crunch effecting everybody and some falling property prices, one of te most common queries we get is how can I cancel or delay my completion based on construction defects, sometimes when ceratin docucumentation is missing we can help, however the bad news is that legally you cannot refuse to complete based on snagging defects

InspectaHomeSpain are totally independent of any developer agent or lawyer and provide a professional new property inspection, SNAGGING, service which has resulted in us being involved in us helping to manage the repair process, assisting dealing with the developer on behalf the buyer.

When purchasing a property in Spain, one of the most important pieces of advice is that you employ an, INDEPENDENT LOCAL LAWYER. In Spain it still remains possible for the same lawyer to represent the buyer, developer and agent, not an ideal situation when there is any form of dispute or legal action. The lawyer should be local, based in Spain, because building regulations vary in each province of Spain. Remember that often the agent or developer only gets paid when you pay the balance for the property and we have many examples where, if there is a dispute the lawyer is really not interested, especially after completion. Even when lawyers have the best intentions, estate agents can use a close relationship to put pressure on lawyers to cut corners and lawyers sometimes pay estate agents part of the fees they receive, in return for introducing clients.

The following piece is just part of a much more detailed document, a full copy of which can be obtained by visiting our forum www.thesnaggingforum.com

Q: What should I be asking a developer prior to completion?

The call that you normally receive from the agent will simply state that the property is ready and that you need to come over, or instruct your lawyer, to complete the sale, and pay over the balance of money but there are a lot more questions you should ask, prior to making your travel arrangements. Forums help with exchange of information, but you should be well prepared when you arrive to carry out the snagging inspection, and sign at The Notary, because what you actually find on arrival can be very different to what you believe you have purchased. Asking the right questions or getting your lawyer to ask the right questions can often avoid wasted journeys and expense.

When you buy a property off plan you should get a sales contract, drawing with dimensions and a specification sheet of what’s included. The sales contract may also include what communal facilities are included; pools gardens and parking areas. Sometimes these may not be completed, especially in the early stages of the development.

When you are asked to complete you should ask the agent/developer for a written confirmation that the property meets the agreed specification and if that any white goods furniture and fittings, if included, have been installed, that the communal areas are finished and able to be used.

Remember if you are relying on rental income to fund a mortgage a property with no communal pool, where there is unfinished by building works, will be much more difficult to rent.

Will the utilities be connected when the inspection is being carried out and will the property be cleaned?

Q: What is Certificate of Habitation and why is it important

There are a number of key differences in the purchasing process in Spain, one being the regulation which requires that, once the property has been finished, an official from the planning department of the municipal authority must inspect the property to ensure that it complies with regulations for newly-built residential properties. If the property conforms to regulations it will be granted the appropriate residential-use licence by the local government Certificate of Habitation (Cédula de habitabilidad o licencia de primera ocupación). Due to the demands on the Town Halls there are backlogs and it can take months get these licenses issued. In Spain there are thousands of properties that are still waiting for these Certificates. Without the Certificate you should not be using or renting out the property and rental agencies will often ask for a copy, before they agree to rent out the property.

On a recent UK TV programme, some owners that were having major problems with water and electricity supplies were described as legally squatting in their own properties but it was ruled that they had no legal rights to demand utilities form the local suppliers.

The process requires that the developer produces a series of technical Bolletins that verify the specification and installation of the electrical, gas and plumbing, a copy of the building licenses for the properties and communal areas and are not automatically issued as, we have examples where they have been refused based on the inspectors findings.

The consequences of not having this Certificate are numerous including those national utility suppliers water; gas and electricity are not permitted to make permanent connections to the property so the developer should provide services until the Certificate is issued. The Town Hall will not recognise the property and, as you will not be paying local taxes you may not be able to register on the Padron, the local electrical role, and obtain medical registration or schooling for children.

The other issue comes when you want to sell the property as it can take years to get these Certificates and they are not automatically granted. When you but the property the developer may have a preferred mortgage arrangement with a bank that would not require The Certificate of Habitation. When you want to sell the property an independent bank may refuse to grant mortgages without a Certificate of Habitation.

The type of advice on this varies but most independent lawyer’s advice is that you should not complete on the purchase, unless the Certificate of Habitation has been issued. Your lawyer should ask the developer about the issue, prior to the snagging inspection, and provide you with a copy.

The developer may state that the Certificate has been applied for and will be granted within a set period and in this case you should ask for a copy of the application and get the lawyer to check the normal processing period at the local Town Hall.

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