Off-plan construction guarantees in Spain

Buying new build property in Spain over the last two years has been quite the frenzy. Post-pandemic, consumers were more than willing to spend their built-up savings leading to two digit increases of property prices, particularly offplan. The soaring inflation has also greatly encouraged consumers to heavily invest in real estate (bricks) so as to protect their savings as banks were giving zero interest on saving deposits.

However, even with the best intentions in the world, some things may be overlooked by developers leading to construction flaws.

We always recommend that buyers command a snagging list prior to taking possession of the house keys at a notary. These reports carried out by independent chartered surveyors (paid for by the buyer) help property buyers to spot construction flaws, even those hidden from the naked eye. Such technical reports greatly assist us lawyers to claim on behalf of clients to have them fixed.

In today’s blog post, we briefly gloss over the three types of construction guarantees available on buying offplan property and how long you have to claim.

Construction flaws: 1 year

Both the developer and constructor will be held jointly liable for a period of one year. These flaws are apparent to the naked eye and are what one would normally pick up on doing a snagging list prior to completion. These flaws relate to the finished works.

My advice is not to complete until the snagging flaws are remedied or else practice a retention upon completion to secure the job is done within, for example, the next 6 months after closing. The reason being is that once you hand over the money at completion they may not be as “keen” to solve the flaws. Thus, a retention or delaying completion, until these minor flaws are fixed, allows you leverage on negotiating acting as an “incentive”.

Examples of this: mismatching floor tiles, missing tiles, flaked painting, faulty doorknobs, leaking faucets and in general all those related to shoddy workmanship or substandard materials (i.e. wooden carpentry, faulty window frames that let in heavy rainfall), etc.

Dwelling hazards: 3 years

The second batch of guarantees refer to flaws that directly impact on habitation. These problems are normally severe. They pose a threat to dwellers’ health, hygiene, or even the environment itself. The guarantee period is three years.

Examples of this: humidity patches in bedrooms (which may lead to aggressive mold growths if unchecked), faulty electrical appliances, leaking gas pipelines, etc.

Structural Problems: 10-year warranty

This is the famous “Seguro Decenal”, or ten-year warranty, you may have been quoted a myriad times on buying. It covers serious structural problems compromising the mechanical stability of the building which may prove life-threatening. An insurance company is hired and tasked with the role of overseeing the different stages throughout the whole construction process; from start to finish until the property is delivered legally (Acta de Recepción) and it has fully verified the materials and build comply with our laws and construction specifications. Unfortunately, the application of this ten-year insurance is fairly restrictive in practice.

Examples of this: landslides due to unstable foundations (heavy rainfall or quicksand which may cause the property to flounder) leading to the entire structure to shift and crack, retention wall boulders falling off a cliff, huge cracks (in ceilings, walls, beams or pillars) compromising people’s life, collapsing roofs due to heavy rainfall, etc.

Guarantee protection timeline

A fairly common blunder is to think the above three guarantees actually start as from the time of completion at the notary; which is when you are handed over the house keys. This is in fact wrong.

The above deadlines are to be counted as from the time the developer attains what is known as the “Acta de Recepción”, which is always pre-completion at a notary.

Conclusion

The sweet property boom Spain is living, once more, translates into thousands of new construction property sales.

Which is why it is important a culture of awareness on Consumer Rights is created so foreigners at large, and in particular fellow expatriates, know what their rights are and how to exercise them.

LNA can assist you in court and out-of-court settlements.  

At Larrain Nesbitt Abogados (LNA) we have over 20 years’ experience assisting clients buying, selling, or renting properties. We can also offer you a competitively priced accounting service to file your landlord taxes every tax quarter nationwide. We are also specialized in litigation, and immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.

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