CONSTRUCTION PROCESS WHEN BUILDING FOR YOUR OWN
Once you have the building permit, you must contract the services of a builder or constructor, to execute the project, and to build the house.
This builder must follow the instructions from the architect in order to execute the construction as strictly projected.
At this point, is very important to pay attention to the work of the architect. When the services of a Spanish architect are contracted to make the project of construction, he will complete his work once the project is obtained. But, you can also contract his services to “control” the works made by the builder, and to guarantee that all the steps of the construction are done as the project specifies. In Spanish, this is “Control de Obra”, or “Supervisión Técnica de la Obra”. Of course, the fees from the architect will be higher if the architect assumes this work, but the guaranties of the construction will be higher, because the works of the builder will be periodically inspected by the architect.
It is very important that the architect must be registered in the Official College of Architects of the Region.
Then you need to appoint an architect, and to agree a contract with him that specifies exactly what he is responsible for, timescales, and costs of the buildings. The architect’s fee includes the preparation of the “memoria de calidades” (Quality specification list of materials). It has to be in detailed, including for example the formula for the concrete, the type of materials, and the size of pipes, plans, etc.
The architect will instruct an aparejador, a qualified architectural engineer, who will supervise the building, carrying out on site inspections, and ensure the building is built following the required standards. He will issue the architect’s certificates which are necessary to obtain the Spanish Certificado de Fin de Obra (Completion Certificate – or Final Works License), and the Licencia de Primera Ocupación (called the First Occupation License or Certificate of Habitation).
You will need to prepare an exact specification for the building, and then find a reliable builder. Your architect may accept responsibility for this, and for supervision. You need to agree a completion date, with a penalty clause in your favour for late completion. This needs to be incorporated into a legally binding contract to be signed with the builder.
“SEGURO DECENAL” OR TEN YEARS INSURANCE:
Also, in this point is very important for you to consider what is called SEGURO DECENAL or TEN YEARS INSURANCE.
When you buy off-plan from a Spanish builder or developer, or you build a new property (which this is the case now ), the builder or developer, together with the architect, must guarantee you that the essential and most important parts of the construction will be secure at least for ten years.
In order to confirm this responsibility, the Spanish regulations forces to developers of new buildings to insurance the most important parts of the construction, as the foundations, internal structure, bines, etc. Other defects affecting the habitability of the property are covered for 3 years. Other minor defects are covered for 1 year. In the last two cases insurance cover is not required, but obviously if a builder can offer this as an additional guarantee, it will be better.
Also, it is an additional guarantee for the construction, because the same insurance company will force the builder to pass determinate quality inspections, to check the quality of the materials and the works made in the property, in order to give the proper policy.
Spanish Ten Years Insurance (or “Seguro Decenal”) is obligatory and compulsory when the promoter is a company with the activity to build houses for sale.
But, it is voluntary when the developer is a particular, usually the owner of the plot. This is called in Spain “Autopromotor”, translated as “Self-Promoter”, or “Self-Developer”. This is the case in which a particular buys a land in Spain with the intention to build a house for him, but he has not the activity of buying for sale. In these cases, Spanish laws gives the option to these particulars not to apply for this insurance, because the Spanish Government understand that, if a particular is building something to live inside, he will take the necessary care to build in a safe and secure way. So, the particular can choose whether to save costs avoiding to pay this insurance; or in instance, to contract this insurance to have a better protection against construction problems and defects.
But, if you, as self-promoter decide not to apply for this insurance, in the future, if you decided to sell the house to other buyers, Spanish Laws force you to inform the eventual buyers that the construction is not covered with this guaranty, and they must expressly accept this as an essential condition from the sale. From the point of view of an eventual buyer, it will be always a better option to buy a property with this insurance. So, they must be duly informed, and they must confirm, that the property is not with any insurance in this way.
As promoter of the construction, you must contract the services of a builder to execute the construction as per project and following the instructions made by the architect. One of the most important elements of constructing a property is the building contract with the builder. The builder will always try to protect his interests, and if you are not experienced with these type of contracts your property can end up being of a fare less quality than expected, or take twice as long as promised or even worse.
To protect yourself always make sure that your Solicitor draws up the contract or dicrectly negotiates the contract proposed by the builder.
The most important elements of the contract are to make sure that the contract considers:
- The full name and CIF number (Tax number of the company) of the constructing company, and the owner are included.
- That the construction is made with as much as detail as possible following plans and building description provided by the architect, and also including a detailed list of materials and qualities («memoria de calidades«).
- That extras (such as garage or pool, etc) are included the price
- That a start and termination date is included in the contract, considering also penalties for late completion.
- Payment terms (new properties pay more than 20-30% before the starting date of the construction and fix all the rest of the payments to different stages of the construction. It can also be recommended to retain 5-10% of the price to repair any defects after the building is finished).
- That certificates from the architect, electricians and the town hall have to be given on the last payment.
- Taxes involved in the transaction, explaining and detailing how much is for IVA (VAT), and Stamp Duty («Actos Jurídicos Documentados«), Notary, Land Registry fees, etc.
Other aspect we recommend to agree with the builder:
- To ensure that the builder will organize the final steps of the process regarding documentation. It means that the builder itself will obtain the Certificate of Final Works (Certificado Final de Obras), or the Declaration of New Building, or Horizontal Division (Declaración de Obra Nueva o de División Horizontal), and, the most important, the License of Occupation – Certificate of Habitation (Cédula de Habitabilidad). These items are extremely important in rustic land, in which is not common to find enough electric or water points of connection mains supply.
- To guarantee that, once you have paid the final payment for the price of the construction you will have the water and the electric meter connected, and with the contracts signed on your private names.
Why ask these things to the builder?
Because it is very common that the builder leaves the case once he has completed the construction, or once he obtains the Final Works License – CFO (Certificado Final de Obra), and the New Building Declaration-DON (Declaración de Obra Nueva).
With these certifications, the builder declares that the new building is finished (with the CFO), and that the construction is complete and already declared in the land registry the (DON).
But, at this stage, the final administrative declaration of the building is not complete. It rests to obtain the Certificate of Habitation – CH (Cédula de Habitabilidad o Licencia de Primera Ocupación). This document is very important because, you need it to pass the supply of the water and the electric contracts from “Works” supply to “Home” use.
We are going to explain this concept in a better way :
With a strict interpretation of the Contract with the builder, he finishes his service in the moment in which the property is physically finished, and appears as a «house» in the land registry (Registro de la Propiedad). This is obtained with the two documents named above:
- Final Works License (Certificado Final de Obra), which is a document in which the architect who projected the construction certifies that the building is already finished, with the compliance of both, project and Building License;
- New Building Declaration-DON (Declaración de Obra Nueva), which is the process of inscription of the new building in the land registry (Registro de la Propiedad) over the existing plot.
In this moment, you, as promoter, have the house complete, and duly inscribed in the land registry. Also, in the property, there is electricity and water. So, you can think that the property is ready to live inside….. BUT… NOT. For your information, the property is not ready yet , for you to live there, the property is not a “house” yet, it is a “construction” because, to be a “house” you need the following items:
- CERTIFICATE OF HABITATION /OCCUPATION LICENSE («CÉDULA DE HABITABILIDAD or LICENCIA DE OCUPACIÓN: This is the confirmation from the Town Hall that the property is ready for habitation, and it is applied once the property is finished with the Final Works License (Certificado Final de Obra), and inscribed in the land registry with the New Building Declaration-DON (Declaración de Obra Nueva).You need this document to obtain the permission of the Town Hall to live live in the house. Before you get it, what you have a is a construction, but not a “house”.This document will be necessary to obtain the individual supply of the main utilities on your name, and with the consumption use for a “house” .
- CERTIFICATE OF ELECTRIC CONNECTION (Boletín de Electricidad) : Before the builder obtains the certificate of habitation, there could be water and electricity supply in the construction, because, it is normal that the builder obtains this supply to make the works of the house (for the tolls, machinery, etc.). But the supply obtained from the builder is a supply for “works”, but not for “house” use consumption. Sometimes, buyers or promoters are left in their properties with electricity and water «supply for works use» for many years, because the builder did not obtained the proper CH (Certificate of Habitation). They have water and electricity, but in a very poor conditions, and expensiver than the normal supply for a house. So, in order to ensure that you, as buyer or promoter, will obtain the proper CH from the part of te builder, it will be recommendable to leave a part of the payment of the price agreed with the buidler to be paid when the CH is obtained. In this way, this will force the builder to work right and to do his best to get this document asap.
So, as explained above, we highly recommend you, as promoter or buyer, to be obtain guaranties that the builder will hand over the property to you being habitable with the CH, with the proper water and electric supply (as a «house»), and with the security that you will not have any problems in the future with this.
The builder knows the area, he knows the architect, also the Town Hall, and he will obtain these documents three times faster and cheaper than you. And, if he wants to be contracted by you, he must just obtain these items. If he refuses to do it, it will be a reasonable argument to look to another.