In case you have decided to buy or to sell a property in Spain, please pay attention to the following information:
1.- CHECK THE PROPERTY DESCRIPTION THE PROPERTY DOCUMENTS
HOW IS THE PROPERTY REGISTERED AND DESCRIBED ON TITLE DEEDS: Check in the property deeds that the property is properly described and registered. Property deeds must detail a perfect description of the size, borders, and the rest of construction elements existing on the property.
It is quite to common to find that properties which have been owned by different owners for many years, have been modified/extended in their sizes and/or dependences (new rooms, closing the porch or terrace, garage, pools, etc.).
If the current surface of the existing constructions do not make coincide with the description in the deeds, then, we need to know the reason of this discrepancy! . In many occassions there are processes that can be taken in order to correct those discrepancies, and ways to sort them out. But, in other cases, those differences shows a legal problem affecting the property that you need to know in order to be confirmed from the earliest steps of the purchase/sale process.
An example: A house with a 120 m2 with a 50 m2 pool and a garage converted into a “guest house”. In the deeds the house only appears as 120 m2, but not the pool, and the garage is a “garage” not a “guest house”.
Consequence: Deeds must be updated and the buyer must be informed that the “guest house” is legally considered as a “garage”.
NOTE: We are not considering about the “internal description” of the house (number of rooms, toilette, etc), what we are considering is the “built size” (in Spanish, “superficie construída”). It is not necessary deeds to show the exact description or distribution of each internal dependences inside the house. If you have modified the interior of the property by changing inside walls, then it will not be necessary to update the deeds, it is enough just to “declare” the new internal distribution upon completion of the sale.
i.e: Deeds shows that there are “4” bedrooms and you converted them into “2”. In this case it is not necessary to update the deeds. As owner, you are free to modify/reform internal dependences inside the property (always obtaining the proper Reform License).
PROPERTY IN CATASTRO (also known as “SUMA” or “IBI”, or “COUNCIL TAX”): In the same way as in the deeds, the property must be registered in “Catastro” with the exact and current size and surface.
Every year Catastro bills – “Council Tax” (IBI- Impuesto sobre Bienes Inmuebles) show the size of the property using Catastro records. The size of the constructions considered in this bill is very important, as it is used to make the calculation of the yearly “IBI” or “Council Tax”. So, it is essential to check if the Catastro records show the proper and updted size of the existing construction on the property, including whatever modifications or extensions which have been done.
So, please, note that “Catastro office” calculates the Council Tax in relation to the size of the constructions, taking into account every construction components like the house, pool, garage, etc.
So, in case the property has been modified with extensions, etc, this must be considered and verified as an essential part of the property transaction process.
An example: When property was acquired existing constructions made a total of 120 m2, for a house. This is what was also shown in the deeds and in the Catastro bill (IBI) . For this reason the Catastro bills (IBI) was 300 EUR.
Some years later, the owner built a 50 m2 pool and a 40 m2 garage. In case the owner did not declare these new construction elements to Catastro, Catastro bills -IBI are underpaid. The reason of this is, as explained in this section, Catastro bills are calculated considering the size of the constructions (in terms of “bigger built size” = “higher tax”). So, probably, if the owner had declared these elements, the IBI bill would be higher than 300 EUR. So, in case the buyer does not attend to this point, and sort while the purchase process, he could be responsible to Catastro of this undeclared constructions in case of Catastro inspections.
2.- OTHER DOCUMENTS TO CONFIRM THE LEGALITY OF THE PROPERTY:
Usually, in order to confirm the legal situation of a property, it is necessary to obtain the following documents:
- Title deeds of the property: To confirm how the property has been bought, legal borders, and legal charges/debts which might affect the propertty
- Catastro (IBI-Council Tax bill)
- Utility bills: Water, electric, gas
- Energy Performance Certificate: To confirm the level of energy consumption from the building
- Community of owners certificate: To proof that current owners are up to date on community charges
The study of the above documents is standarized in Spain by agents and lawyers.
But, as especisalised in construction and in real estate, our company makes special emphasys in the study and consideration of other documents, which are not always taken into consideration by other proffessionals not so specialized in construction as TLA.
- Certificate of Habitation/License of Occupation/Occupation License (CH/LO): This document is obtained from the Town Hall when construction works are finished, in order to confirm that the property fulfills with the legal conditions of habitation. This document is also needed to connect water and electricity to the property and to make the changes of the water and electric contracts into your name.
To obtain this Certificate is “obligatory” when selling/buying properties in Spain?:
It depends on the type of the property: In “New” properties, the builder has the obligation to supply this document to the buyer on completion of the selling process.
But, please, note that in “Resales”, there is no law which forces the vendor to supply this document on completion of the sale. Spanish laws say that, it is the “buyer” who must obtain this document after completion, in order to proceed with the changes of the water and electric names.
At this point we have to say that the administration might refuse to give the CH to the buyer after completion in case the property has been suffered unathorised works, etc from the previous owner. So, if the property is not in perfect legal conditions, there could be a risk to not to get the approval of this document after completion. And this could leave the buyer in a very complicated situation, as he could have then problems to get the utility contracts on his name.
A very important point here is that the existence or validity of the CH it is not shown in the deeds!. So, your lawyer must inspect this matter carefully using his expertise, and experience to confirm a so important document as this one.
From as conclusion , this certificate is ESSENTIAL to the sale the property, and its confirmation must be inspected from the very beginning of the purchase/sale process.
- Non Infraction Certificate (CNUI): This is a certificate issued by the Town Hall confirming that there are not any fines for construction, neither other infractions nor orders of demolitions affecting the property.This certificate confirms if the property is subjected to any kind of construction penalties like orders of demolitions, etc. If the property was built, or extended, without the proper building license, the Spanish administration may have rights to act against that building. But these rights of the administration have a limit in time. These rights expires in 15 years after the finish of works from the property or from any of the eventual extensions carried out there.To obtain this document is specially recommandable when buying “villas”, or “semi-detached” properties, or when buying properties in rustic land.
- Cedula Urbanistica: This is a document obtained from the Town Hall which confirms different aspects from the property, as:
- The “urbanistic” consideration of the plot and the area. For example, if the plot is considered as “rustic”, or “urbanizable”, or “protected”, or affected by public domain, etc.
- If the urbanisation of the area has been completed, or if there are some other areas or urbanisation infrastructure to complete
- The exact “building rights” of the plot (maximum building/construction allowed in the plot) etc..
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PROCESS OF BUILDING A PROPERTY IN SPAIN – URBAN
PROCESS OF BUILDING A PROPERTY IN SPAIN – RUSTIC LAND
LEGALIZATION, REFORM, AND COMMON PROBLEMS