Jul 102012


Fortunately, Spanish builders do have general responsibilities imposed upon them by Spanish law when building new properties in Spain.  These are obligations that go beyond the requirement to have an insurance backed 10 year building guarantee (the Decenal).

Indeed, the Ley 38/1999 de 5 de Noviembre (‘Ordenación de la Edificación’) states that a builder has an obligation to:

  • Correct identified snagging points (normally assessed 15–30 days prior to signing the Escritura/Completion)
  • Correct just about any defect (other than normal wear and tear) during the first 12 months following completion of the build
  • Rectify functional issues that affect the enjoyment or habitability of a property for the following two years (i.e. a builder’s responsibilities run for the first three years after completion of a new build property in Spain)

Unfortunately, the devastating fall in the property market in 2008 has meant that many builders simply fail to respond to requests to correct issues. Alternatively, sometimes they buy time by purposefully botching repairs in a somewhat naive effort to get past the three-year deadline. Accordingly, you should avoid ever paying all that you owe to a builder until each and every defect on new building work has been remedied.

The trouble is that some building defects in Spain may not be obvious or easy to identify.

So, a wise buyer always will employ an independent building surveyor to conduct a pre-completion survey of a new build, particularly if they have any suspicion whatsoever that there may be problems – albeit ones that they cannot precisely define!

Without doubt, in a property market downturn it is the building industry that suffers grievously. This means that many builders go bankrupt or are left struggling with reduced manpower and a lack of skilled workers.

As a consequence, trying to get building defects in Spain rectified can be extremely difficult or, at worst, impossible. To state the obvious, if a builder goes out of business then no amount of badgering will work – and if he has no assets, then any court action is likely to be a waste of time and money.

Your builder may have had all-risks building insurance in Spain to cover defects outside the strict scope of the decenal. However, this is rare and any enforcement likely only after a court hearing. That said, it is worth noting that early presentation of a court demanda should prevent a builder from closing down his company.

If a new property does not meet its specification or is uninhabitable, then this may merit the reversal of your agreement to buy. However, doing so is far from risk free and invariably it will involve a court action. This can be slow and costly and may even go to appeal.

As always, if you think you may have construction problems in Spain with your property then quick action is required – both to obtain a qualified professional assessment of any possible defects and (if necessary) the involvement of a lawyer to enforce any required remedial work.

Time is of the essence and the small cost involved in having a pre-completion survey from a professional surveyor can be invaluable and ‘nip in the bud’ building defects that could be costly to remedy and take years to get completed.   Certainly, once you have fully paid a builder then it can be very difficult to enforce any obligations unless you are backed by a properly qualified surveyor and have an experienced building dispute lawyer to hand.

So, if you are concerned about your new build property in Spain or are becoming embroiled in a dispute with your Spanish builder then contact us.  We can help you to resolve your problems and provide you with the authoritative and experienced help that you need…

 Mark Paddon


Jul 062012


If you are the owner of a new property in Spain, now may be the time to check your home carefully for any structural defects.  I say this because any newly built home in Spain should have a Decenal Insurance policy (10 year building guarantee in Spain).

So, if you have a Decenal Insurance policy then this may be close to running out – if your home in Spain was built during the early years of the Spanish property boom.

Needless to say, once your 10 year building guarantee in Spain expires you will be liable for any structural defects and remedying these can be extremely expensive.  Indeed, if ever you need insurance then it is for remedial structural works!  Almost by definition these can be complicated and the costs of rectifying a given problem can be far greater than those incurred during the original building process.

Certainly, the last thing that you should do is to ignore anything that looks as though it may indicate a structural fault.  Whilst minor cracking in all properties is common – anything more than that should be checked by a fully qualified (and independent of the builder!) professional.  This is particularly true if you see indications of movement (see Indications of Building Defects for examples and images of potential problems).

Decenal Insurance (10 year building guarantee in Spain) was made obligatory on the 6th May 2000 when a law ( La Ley de Ordenación de la Edificación’) was passed which made it obligatory for any new build property in Spain to have an insurance-backed, 10-year guarantee (similar to the NHBC scheme in the UK). In Spain, this scheme is called the seguro decenal and is often referred to as the ‘builder’s guarantee’ or just the Decenal.

Unfortunately, the Decenal is by no means as comprehensive as its UK (NHBC) equivalent (although the NHBC has been criticised for some of its ‘get out’ clauses!). However, you must be especially wary of relying on the Spanish Decenal to resolve all your new building problems in Spain. Indeed, the very term ‘builder’s guarantee’ is misleading. The Decenal essentially only covers issues related to structural stability and resistance. This leaves many other potential issues unprotected, such as leaking roofs or damp.

Nonetheless, it is important to have a Decenal policy and you should be extremely wary of buying a new Spanish property that lacks this cover, if it was built after May 2000.  Indeed, the lack of a Decenal may indicate that your property (or intended property!) may not be legal – so beware and make sure that your Spanish conveyancing lawyer checks this detail!!

In theory, Decenal insurers are legally obliged to pay out to the owner of a new build property in Spain if there is a proven structural stability issue that needs correction. This is irrespective of whether the fault is due to the builder or architect and whether the problem is because of negligence, faulty materials or processes.

However, typically decenal insurers are extremely tardy about honouring their obligations. Indeed, usually they refuse to accept a claim unless negligence is proven in court. This is because they know full well that if, for example, an architect is proved negligent, then any remedial costs will be covered by the architect’s own professional indemnity insurance.

So, although Decenal insurers are legally obliged to act, in reality,they rarely do so until forced to do so. This is despite the fact that they can potentially recover their costs from the builder or architect responsible for the defective or negligent work.

If you think that your Spanish property may have structural problems or building defects then contact us.

We can then assess whether your suspicions are right or not.  If your worries prove to be correct then we can prepare a formal report and then help you make your claim against your Decencal insurers.  Should there be a dispute then our legal department can provide you with the help you will need to process your claim and we can then manage the remedial works required.