Buying from a Developer - Cornish & Co |
 When considering the purchase of a Spanish property many people are a little nervous because of "horror stories" that they have seen in the media surrounding the subject of buying a property from developers in Spain.Such stories have included:1. Builders without adequate insurance becoming insolvent while in the process of construction of a property, or before completing the infrastructure of a development. 2. Defective or non-existent planning documentation, leading to serious difficulties in obtaining connection of services such as water and electricity in the mildest of cases, to demolition orders in the most severe instances. 3. Mortgage loans secured on the land being developed and sold remaining undischarged after completion of the site coupled with insolvency of the builder. 4. Conflicting or deficient advice given by "advisers" who are often representing the interests of the other party to the transaction. Many of these situations have been and still are the subject of protracted and very expensive court cases in Spain, leading to further expense and worry for those caught up in them. These could be avoided, or at the very least any potential loss minimised with appropriate care at the outset of the transaction. There are in fact substantial safeguards embodied in Spanish legislation protecting the property purchaser.Against builder insolvency - There is a legal requirement for builders engaged in the construction and sale of properties to provide the buyer who is effecting stage payments during the building progress with an insurance policy or bankers guarantee, protecting the buyer' s payments against the risk of the builder becoming insolvent before completing the work. Contractual Matters - Under consumer protection law, developers must provide a full contract containing all the terms of the purchase, building specifications, detailed plans, copies of their title to the land on which the construction is to take place and planning consent. Planning Matters - On newly built properties the title deeds executed at the Notary's office must contain copies of planning documentation which proves that the building has been erected on the land in accordance with local planning regulations and without breaches of the building licence obtained prior to the commencement of the work by the developer. New Building Law - Finally, an important new Law ("Ordenacion de la Edificacion") has come into force in compliance with an EU directive affecting building projects in which the application for planning permission is made after 6th May 2000. This new legislation which builds upon provisions in the Spanish Civil Code provides a clearer legal framework relating to the building process establishing the different roles and respective legal responsibilities of the property developer, builder and architect etc. The builder, for instance, is now responsible in respect of defects found by the owner in the first year following delivery of the property. The property developer is responsible in respect of defects affecting habitability in the first three years and serious construction defects for a period of ten years. The builder and property developer are obliged to have suitable insurance in place to cover them in respect of their legal responsibilities. With appropriate advice and guidance, it is possible to take full advantage of the protection given to both buyers and sellers of property in Spain, thereby avoiding the difficulties which some buyers may have experienced in the past. This will in turn ensure that acquiring a Spanish holiday home will be both a profitable and pleasurable experience. |
