Buying a new home in a development in SPain
If you just want to purchase a new home can be two possibilities, that the house is still under construction or is already built:
When buying a property in Spain under construction the developer must provide the following information:
- Registration data of the developer in the Commercial Register.
- General and detailed plans of the property.
- Instructions on the use and maintenance of the property facilities.
- Building specifications.
- The total price and payment calender.
The deposit and payments in advance
Purchasing the property, is usual pay a sum of money as a deposit to reserve it until the purchase contract is signed.
If you finally decide not to purchase the property, generally will lose the amount paid as a deposit, so it is advisable to be sure and completely informed about all the aspects around that property before going ahead.
If you decide to purchase the property, the usual way to proceed is to agree a payment schedule while the building is being constructed. In this period the amount paid, normally, is between de 20-30% of the total price.
Payments in advance must have the bank guarantee
The amounts that paid in advance periodically must be guarantee by the developer through an insurance or bank guarantee.
In cases where construction is not finished or is not even started, the developer will be required to return the quantities.
So make sure when signing the purchase contract that such insurance or guarantee exists. The developer must give the individual policy of this insurance or a document proving the existence of the guarantee. This information may also be obtained directly from the insurance company or the bank. This way you will know the amount covered, the duration of the policy ... etc.
VERY IMPORTANT CHANGE!!!!! Buying property off plan in Spain
The last amendment of the Spanish Building Act (Ley de Ordenación de la Edificación) made on July 2015 threatens to have a great significance for those who decide to buy an off plan property in Spain since the beginning of 2016. The new rule says any amount that a home buyer pays before the house developer or the cooperative have obtained the building license will not be guaranteed by law. (Read more about the subject here)
The purchase contract
The private purchase contract is between you (the buyer) and the developer (seller) and it must contain at least the following:
- Counterparties data.
- Property identification: surface boundaries, possible annexes (garage, storage ..)
- The plane of the housing and building specifications.
- The price and terms of the acquisition:
- The periodic installments to be paid
- the insurance policy that is hired to ensure the quantities paid in advance
- the current account has been opened for the payment of such amounts
- the purchase taxes to be satisfied
- the date of termination of The construction and the penalty for the constructor to satisfy the buyer in case of delay.
The contract will need to be attached with the following documentation:
- Description of the property and the building in which it is located as well as the common areas and services.
- Location map
- Materials used in the construction of the building
- Copies of building permits and Urban Certificate
First Occupation License
Once the building is ready, the developer finally must provide the First Occupation License.
It is an administrative document issued by the municipality in which it is noted that the property meets all the requirements to be inhabited. This document is needed to hire the different house supplies.
The warranty for construction defects
Received the keys, it is advisable to check the property to detect possible defects.
To make complaints and request the repair these shortcomings, the buyer has the following deadlines:
1 year for defects affecting the finishes (problems with painting, adjusting ... etc..)
3 years for defects affecting the habitability (dampness, isolations,...)
10 years for defects affecting the building structure.
Is mandatory that the developer hire a ten years insurance policy to cover the defects affecting the building structure.
Book of the building
The developer shall prepare and deliver to buyers a document called book of the building (Libro del Edificio). This file is a detailed description of the works, including technical projects and materials used. Also the instructions manuals and the facilities maintenance instructions. Evacuation plans of the building in case of emergency are included.
Also a list of all those involved in the construction of the building, technical staff and companies of different crafts.
The Public deeds
Once all these steps are achieved is the time to sign the public deeds. The document must contain, besides of the terms of the purchase contract, the Book of the building, the First Occupation License and a copy of the structural damage insurance policy.
In this case you can check for yourself the characteristics and qualities of property.
About the damages, to make any claim, you will have the same warranty terms than in cases of homes being under construction.
As in any purchase, it is advisable to check at the Land Registry that the property is properly registered, the person (company) who is going to sell the house is listed as owner and whether there is any charge on the property that you were not previously reported (eg, a mortgage, a lease, etc..).
The contents of the purchase deed and documents to be attached are exactly the same as for the under construction ones.
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