Apr 052013

Decenal insurance policy Spain

Do you have a Decenal insurance policy on your new (under 10 years old) property in Spain?

Of course, this may seem a silly question – as all new Spanish houses should have a 10 year ‘Builder’s Guarantee’ (Decenal Insurance policy).  Indeed, a Decenal insurance policy (similar to a NHBC insurance policy in the UK) is obligatory, by Spanish law, for any new property constructed by a builder in Spain.

However, there is a loophole in the Spanish law relating to the imposition of Decenal policies for new build Spanish properties – that (whilst, perhaps, sensible for people building a house for their own long term use) has been taken advantage of by unscrupulous builders and colluding conveyancing lawyers.

The loophole states that a self-build project (auto-promoción) in Spain does not have to have a Decenal policy.  This is when the owner of the property chooses to be designated as the builder of the property concerned, in which case he can ‘decide’ whether to have a Decenal policy or not.

Obviously, having a Decenal policy is an additional expense for any builder.  Worse still (for the builder) is the fact that the providers of Decenal insurance policies inspect the construction of the building to be insured (during various stages of the building work) and also analyse concrete samples etc. for their structural integrity.

In short, if a builder in Spain can get away with not providing a Decenal insurance policy then it is very much in his interest.  He avoids paying for the Decenal insurance policy and does not have to comply with any of the obligatory inspections undertaken by the Decenal insurer’s experts.

Well, as you can imagine, over the past few years, a significant number of Spanish property owners have unwittingly been designated as ‘auto-promoters’ or the builders of their own properties.  This is irrespective of the fact that a ‘professional’ builder or developer (backed by an architect etc.) has actually undertaken all the work.

Spanish houses and the 10 year Builder’s Guarantee (Decenal)

–          Vital insurance backed protection against structural movement

–          Obligatory for all new builds (since 2002)

–          Exemption for self-builders

–          Not all new properties (built within the last ten years) have a Decenal policy

–          Retrospective Decenal policies can be obtained

The end result is that many people have had a house built and yet lack a Decenal policy, the insurance backed guarantee that expressly provides cover for structural instability – one of the most potentially expensive problems any property can suffer.

So – what happens if you do not have a Decenal insurance policy?

Well, firstly you cannot sell your new Spanish house until ten years have elapsed.  Or, at least, you can – but only if the new buyer expressly agrees to buy the property understanding that there is no insurance backed guarantee relating to the structural integrity of the property concerned.  Frankly, only a mad or ill-advised buyer would do this (obviously!). So, selling your property before ten years have passed is very difficult and could result, at best, in you significantly reducing your property price to take into account that you are selling something is perceived as being unsound.

Secondly, needless to say, you will have no insurance backed cover should your property suffer from structural defects.  This, as I have written before, is a reasonably common problem with property in Spain due to (amongst other things) the often poor standard of building that occurred during the boom years for Spanish property.  This was made worse by construction of properties that were built on unsuitable land or with inadequate foundations.

Obviously, if you have a property that is less than 10 years old then you should check to see if you have a valid Decenal insurance policy.  If you have – then fine.  However, if you do not have a Decenal then you should seriously consider your position!

Fortunately, you can get retrospective Decenal insurance, subject to an inspection of your property.

So, all is not lost!

If you do not have a Decenal insurance policy and want to know how to obtain one or how to get a retrospective Decenal insurance policy then do contact us.  We can provide you with all the details that you need – and an excellent Decenal insurance provider who is based in the UK and who can provide you with comprehensive cover (all in English).

Oct 082012
Building defect insurance claims in Spain


Making insurance claims against a builder in Spain is not always as simple as it may appear and certainly ensuring that you are successful in any building defect claim – can be fraught!

Sadly, our experience has been that Spanish property owners making a claim against their builders can be faced with a number of complexities.  Firstly, of course, you have to be able to prove that your property has a defect and that it is the responsibility of your builder.   To do this, you will almost certainly need an independent report from a specialist building surveyor able to analyse the building defect and to assess why and how it has occurred – and who is to blame.

It is unwise to rely upon your builder’s assessment, and reporting from the project architect is also often unreliable (typically playing issues down) and a report from an unqualified professional will be completely unpersuasive to an insurance company, let alone a Spanish court.

Of course, you may be covered by your ‘builder’s guarantee’ or Decenal in Spain, if you own a property built within the last ten years.  However, Decenal insurance companies in Spain can be very tardy at paying out for property construction related claims and will often also attempt to downplay the extent of the repairs needed; possibly leaving you with future problems or remedial work that is inadequate.

Indeed, forcing Decenal insurance companies to act properly and to honour their commitments is not for the faint hearted and invariably requires the employment of a specialist surveyor backed up by a litigation lawyer (separate from the insurance company!).

Obviously, in Spain, many foreigners have difficulty asserting themselves properly because of their lack of Spanish and poor knowledge of the Spanish legal system.  This can make processing a claim for defective construction in Spain very difficult and it can prolong the process considerably.

The answer, of course, is to use a bi-lingual building surveyor and bi-lingual lawyer both of whom specialise in insurance claims against builders in Spain.  This is a service that we can provide, backed up by years of experience of tackling construction problems throughout Spain and the islands of Spain.

In fact, we have attended Spanish courts many times on behalf of clients and have successfully prosecuted actions where properties have suffered from a range of defects – from those that have been relatively minor to complete structural failures.

Interestingly, we have also undertaken a lot of work for insurance loss adjusters and so we know how they work, how to present our reports to best effect and where appropriate how to place effective pressure upon insurance companies – so that they take your claim seriously.

If you are concerned about your Spanish property and think that you have a building defect or construction problem then do contact me.  We can make sure that your justified insurance claims against a builder in Spain are processed to maximise your chances of success, providing a one-stop service for you that will remove much of the worry and stress you may feel.

Mark Paddon