In the property buying and selling process, it is very important to take into account the responsibilities assumed by sellers and builders in the sale of property to buyers.
It is very normal to find properties in the market that are sold with defects, in which the buyer does not know very well how to act, nor what are the rights as per law when they find problems or constructive defects that have not been detected before the sale.
It is important to establish what are the rights and obligations from the sellers, and from the builders, as well as from the buyers who acquire properties in Spain. That is why we have created this report to clarify concepts and procedures when confirming a visual or hidden defects.
DEFECTS:First, let’s identify what we understand by “defects”. We understand defects or constructive defects any type of deficiency that we find in a construction and that reduces its quality. This this defect, must result in such a way that the owner cannot enjoy and use the property in a normal way.
In addition, we can identify that a defect, or a constructive defect can be considered as “serious” or “grave” in the event that, if the buyer had discovered it before the sale, he would have rejected the purchase, or would have been the result of negotiating the price with the seller.
TWO TYPES OF DEFECTS: Visuals and Hidden
Visible defects are those that are easily detectable by means of a visual inspection, either in the construction process of the building, or through a visual inspection by the buyer. That is, they are easily detectable by anyone without building knowledge or preparation.
These visible defects are not the responsibility of the seller. Therefore, the seller has no responsibility for visible defects that could have been discovered in this way by the buyer, especially if they do not affect or vary the price of the property.
Hidden defects, in instance, are those that have not been possible to detect by the construction process, because they are not easily visible. In the case of new constructions, these defects have not been detected by the different professionals, such as architects, inspectors, etc. during the construction process.
Not all defects can derive in responsibilities. For this to be the case, the effect must meet these conditions:
- That it was not easily detectable
- That the buyer did not know about it
- That it existed before finalizing the purchase
As an example, we are going to list which are the most repeated hidden defects in the casuistry:
- Damages that affect the structure of the building. These are work defects that substantially affect the stability and structure of the building.
- Problems of leaks, waterproofing, which cause leaks in the house.
- Problems of settlement of buildings. Once a building is constructed, it can present some cracks, fissures, etc that appear due to a bad settlement of the building, and produced by a bad basement.
When considering responsibility for hidden defects, it is necessary to distinguish between houses built of new construction, and sale homes.
In new homes, the guarantee and the right of the buyer to claim for hidden defects is divided into three types:
- ONE YEAR: Problems in finishing as interior pavements, exteriors, carpentry, new appliances, etc. ONE YEAR from the date of construction, or SIX MONTHS from the date of purchase/completion.
- THREE YEARS: For defects produced at the property and that directly affect and degrade their habitability. In this case, it is a matter of problems that affect hygiene, health, water tightness, healthiness, etc. These case of defects must leave the property in such a way that is impossible to live inside. So, Please, note that “secondary defects” which do not prevent to use the property to live in, will not be covered.
- And for problems that affect the structure of the building such as the foundation, pillars, beams, floors, etc., TEN YEARS. These defects must be such that they must compromise the stability of the building.
In newly built properties, it is mandatory in Spain to submit a DECENIAL INSURANCE (or TEN YEAR’S INSURANCE) that covers the structural damage of the building for 10 years. These defects are covered in such a way that, if some of these defects appear, the buyer must inform his insurance, so that they may claim and use the ten-year insurance previously provided by the promoter or constructor of the building. In this way, buyers are guaranteed, as consumers of new construction homes, which are duly covered during TEN YEARS for these defects.
Here it is necessary to say that in the case of the houses in “AUTOPROMOCIÓN” (Self-promoter), contracting the decennial insurance is not obligatory, but voluntary. A construction is in self-promotion when the final consumer of the building is the same owner of the plot, and hires the builder only for the purpose of building the house. In this way, the owner of the plot assumes the position of “promoter” of the works, and he is the one that performs the hiring of different professionals such as architects, builders, etc.
In these cases, given that the home is not going to be sold in the market in search of buyers, but will be used only by the same owner, the Spanish law allows the promoter to hire ten-year insurance or not. In case the owner chooses not to contract said insurance, if he decides to sell the property during the guarantee period of 10 years, he must inform the eventual buyers that the house does not have such insurance, and the buyers must expressly accept this situation.
This in terms of the NEW properties…., but, what happens in RESALES? Do sellers have any responsibility for hidden defects?
The answer is affirmative. Sellers who sell resale homes are also responsible for hidden defects that these properties may have. This responsibility is about the hidden defects that exist in the property and that, during SIX MONTHS, the seller will be responsible for any type of the defects mentioned above, and that could be detected before six months from the completion of the sale.
To exercise the right of the buyer to claim responsibility for hidden defects, the following is necessary:
1.- The defect must be detected.
2.- Seller must be notified in writing, usually by certified mail, making him aware of the defects, explaining what the causes may be, and what is the means to repair the problem.
3.- In the event that the seller does not recognise his responsibility, buyer must obtain a written report from an independent professional, if possible an expert, who determines the problem, the defect, and which are the repair costs in an official report.
If the seller, received the report of an independent professional that establishes the causes of the problem, its repair, and the costs that this entails, and does not take charge of its repair, then the buyer must be advised by a lawyer in order to see what are the legal ways that exist to solve the problem.
Normally, it must be said that Tribunal claims derived from hidden defects of small consideration are usually expensive and long. Therefore, always advisable to try to reach an out-of-court settlement with the seller.
For serious cases, in which there is a real problem that affects the habitability, or the structure of the building, it will be necessary to defend the position of the buyer in the best possible way, always considering the possibility of going to Courts if not finding an agreement with the seller.