Law 12/2023, of May 24, para el derecho de la Vivienda . Click here to see the law 

Enhanced Overview of the New Property Transaction Law

This law marks a significant advancement in the protection of the rights of buyers and tenants of residential properties by imposing stricter obligations on builders, property owners, and real estate professionals. The law mandates transparency and full disclosure of all relevant information that could impact the purchase, sale, or rental of residential properties, ensuring that transactions are conducted with a higher degree of accountability and clarity.

Key Provisions of the Law

The law introduces mandatory transparency in the provision of all information affecting a property, making it an essential requirement in the processes of buying, selling, and renting real estate. Article 30 outlines the fundamental rights of property buyers, tenants, and acquirers, emphasizing their right to receive information about the property’s characteristics, services, facilities, and the legal and economic conditions of its acquisition, lease, or use. This information must be:

– Complete
– Objective
– Truthful
– Clear, understandable, and accessible

Obligations for Real Estate Agents and Property Professionals

The “duty of information” is established as a binding obligation for all parties involved in the housing construction, rehabilitation, and real estate service sectors. This includes:

– Promoters and Builders: Those responsible for developing residential properties.
– Property Owners and Sellers: Individuals or entities holding property rights who intend to sell or lease their properties.
– Real Estate Agents: Professionals engaged in the intermediation of real estate transactions.
– Property Administrators: Individuals or companies managing properties on behalf of owners.

These professionals are legally obligated to provide complete, objective, truthful, clear, and accessible information to buyers and tenants, as stipulated by the law. They must also comply with consumer protection legislation, ensuring that all advertising and promotional activities adhere to the highest standards of honesty and transparency. Misleading, insufficient, or deficient information is expressly prohibited.

Detailed Information Requirements

Owners, developers, real estate agents, and property managers must provide buyers and tenants with comprehensive information, including:

– Identification

Clear identification of the seller, lessor, and any intermediary involved in the transaction.

– Price and Economic Conditions

A detailed breakdown of the total price, including any additional costs (e.g., furnishings, fixtures) and the terms of payment or financing options.

– Property Characteristics

1. Certificate of Habitation/Occupation License: Verification that the property meets the minimum standards for habitation.
2. Area Specifications: Accurate measurement of the property’s usable and built area, distinguishing between private and common spaces, excluding non-habitable areas.
3. Building Age and Renovation History: Detailed history of the building’s age and any significant renovations.
4. Services and Facilities: Description of available utilities and services, such as water, electricity, and sanitation.
5. Energy Efficiency Certificate: An assessment of the property’s energy efficiency.
6. Accessibility: Information on the property’s accessibility features for individuals with limited mobility.
7. Occupancy Status: Clarification of whether the property is currently occupied or vacant.

– Legal Information

Detailed registry information, including any charges, encumbrances, and the property’s legal status.

– Protected Status

Indication of any legal protection or restrictions applicable to the property, particularly if it is located in protected areas or has architectural significance.

– Asbestos and Hazardous Materials

Buyers and tenants have the right to request information on the presence of asbestos or other harmful substances in the property.

– Stress Zone Notification

If the property is located in a “stressed area” with high demand and low supply, this must be disclosed, along with information on past rental prices.

 Timing of Information Disclosure

The law mandates that all required information must be provided “before” the formalization of the transaction and the exchange of any payments.

This requirement represents a significant shift from previous practices in the Spanish real estate market, where such information was often disclosed after a deposit or payment had been made. This change aims to protect buyers and tenants from entering into transactions without full knowledge of the property’s condition and legal status.

Certificate of Habitability/Occupation License (CH)

The law emphasizes the obligation of property owners to provide a valid Certificate of Habitability or Occupation License “before” any transaction-related payment is made. This ensures that the property meets legal habitation standards. If a property lacks this certificate, the owner must take necessary steps to obtain it, involving technical and legal experts if required.

The law also clarifies that properties not meeting the minimum conditions of habitability cannot be considered legitimate dwellings.

Legal Obligations of Property Owners

Owners are now legally required to conduct a comprehensive legal analysis of their properties before putting them on the market. This includes verifying whether the property is subject to any protection regime, public domain conditions, urban limitations, or other legal restrictions. This measure is intended to enhance security in real estate transactions and prevent legal disputes arising from incomplete or misleading property information.

Special Provisions for Property Administrators

The law explicitly recognizes the responsibility of property administrators to protect consumer rights by ensuring transparency and honesty in the management and disclosure of property information. This includes providing potential buyers and tenants with essential details about the property’s legal status and any community agreements that may affect the transaction. The new regulations aim to eliminate the previous practice of withholding information, which often led to legal uncertainties and conflicts in real estate deals.

IBI Surcharge for Unoccupied Properties

The law introduces a surcharge on the Real Estate Tax (IBI) for properties that remain unoccupied for extended periods. This measure is designed to discourage property speculation and increase the availability of housing in the market. Properties owned by individuals with multiple residential properties in the same municipality may face a surcharge of up to 100% if they remain unoccupied for more than three years.

Impact on Real Estate Agencies

While the law enhances consumer protection, it also poses challenges for real estate agents, who must now disclose owner information to potential buyers and tenants before concluding transactions. This could lead to direct negotiations between buyers and sellers, bypassing the agency and potentially depriving agents of their fees. Real estate agencies are encouraged to revise their contracts to protect their commissions and ensure compliance with data protection laws when sharing private information.

Conclusion

This new law represents a significant shift in the Spanish real estate market, mandating a higher level of transparency and accountability from property owners, developers, and real estate professionals.

By enforcing these rigorous disclosure requirements, the law seeks to protect consumers, reduce legal disputes, and foster a more secure and trustworthy real estate market in Spain. Real estate professionals must adapt to these changes by enhancing their legal knowledge and ensuring full compliance with the new regulations, thereby contributing to a more ethical and professional industry.

TLACORP 2023