Enforcing a 10 year building guarentee ?

Hi

I have a property that I bought off plan from a large developer. We completed in uly 2008.  Since that time, we have had continual problems with the property flooding whenever we get heavy rain.   We contacted the developer about it 12 monthsago  and they said that we need to make a claim on our  buildings insurance..

We contacted the insurer who sent an assessor - who immediately said the problem was caused by a building defect and provided a report with details.  We went back to the developer with that report, and they made some minor changes to the property (took up some tiles) which hasn't stopped the problem happening, and nor have they fixed the effects of tehe flood - such as replacing the front door which has been water damaged.

All attempts over the past 4-6 months to contact the developer to request more action have failed - we've sent over 30 emails, tried calling, faxing and sending "fault reports" on their website - and we get no response at all.

We understand that other owners on the development have had the ame issues with flooding and have also been unable to get a response.

Does anyone know how we can legally enforce the guarentee and get the developer to addres both the building defect AND repair the damages?  We are concerned that the property will continue to flood whenever we get rain..

Thanks

Russ

 

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Russ

You would have more chance of walking into your local pub and finding Osama Bin Laden celebrating the birth of Nadias new baby with Elvis singing karaoke

 

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Hi Russ,

First I would contact the builder by fax give them 1 month to address the defect and repairs, should he not respond  then send another fax to let them know that yourself and the other owners will be to go to the police station and he will have a denuncia placed against him.

Have you and other owners taken any photographs of the defects and damage?

 

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Russ:

Do you have the 10 years guarantee policy available? Do you have a survey report of the defects?

These two elements will be enoiugh for the claim against the Insurance Company covering building deffects for 10 years.

Best regards,

MAria

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Maria

Thanks for the response. We have a surveyors report (from our own Building Insurance company) which states that the problem was caused by a building defect that they have seen on other properties on the resort was a well.  I've also read (on this and other forums) that other owners have the same problem.

I don't have details of the 10 year guarentee for the buildings though - as we have been trying to get that information from the developer (but can never get hold of them)

I'd read elsewhere that that the 10 yr guarentee has to be underwritten by a insurance company, but it would only activate if the developer went bankrupt (which they haven't) - so would we still be able to make a claim in this situation?  Do you have any advice on how we could find out the detail of the company that underwrite the guarentee?

Muchas gracias por su asitance

Russ

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Dear Russ:

Of course not, the 10 year guarantee is activated if any of the events covered by the Insurance arises. If your President or administrator doe snot provide this information to you, you can access the land registry as they have this information available.

Some related articles and blogposts:

http://www.eyeonspain.com/spain-magazine/building-defects.aspx

http://www.eyeonspain.com/spain-magazine/community-horizontal-4.aspx

http://www.eyeonspain.com/spain-magazine/building-defects.aspx

http://www.eyeonspain.com/blogs/costaluz/3031/legal-tip-238-building-defects-part-iv-compulsory-insurances-for-building-defects.aspx

http://www.eyeonspain.com/blogs/costaluz/3006/legal-tip-237-warranty-period-and-claims-deadline-for-building-defects.aspx

http://www.eyeonspain.com/blogs/costaluz/2983/legal-tip-232-building-defects-part-ii.aspx

http://www.eyeonspain.com/blogs/costaluz/2974/legal-tip-231-building-defects-part-i.aspx

http://www.eyeonspain.com/blogs/costaluz/2479/legal-tip-172--103-and-1-years-to-claim-against-insurance-company-for-building-deffects.aspx

http://www.eyeonspain.com/blogs/costaluz/2486/legal-tip-173-guarantees-for-building-deffects-part-ii.aspx

http://www.eyeonspain.com/blogs/costaluz/2080/legal-tip-125-community-problems-solved-in-25-days.aspx

http://www.eyeonspain.com/blogs/costaluz/1571/legal-tip-88-ten-years-insurance-to-cover-your-building-deffects.aspx

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In many cases despite the legal requirement to do so developers do not insure the risk.

So before you waste any money instructing professionals I would ensure the policy exists first or that the developer has funds to meet any claim etc

But this is all very procedural stuff and the chances of ever getting a payout or the defects remedied (if not done by builder/developer) are very slim. Instructing architects and engineers to prepare structural reports on buildings is also incredibly expensive.

But you could always consider sueing the architect under his professional indemnity insurance because they also have a responsibility.

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Faro:

Once you find if the Guarantee exist, if exists, it is possible that the Insurance refuses the payment amicably but, this type of actions, called " decenales" , if the damages are among those covered by Law/Insurance Policy are quite clear cut.

Maria

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I have sat through many an AGM and listened whilst lawyers, engineers and architects debated these issues and the cost of pursueing these claims particularly if the damage is structural. This is where gaps in walls are big enough to fit your hand into the gap but still the game must be played! or streams flowing through when it rains etc

You know the cost of the expert reports will be somewhere in the region of EUR5k to EUR10k and then legals cost and so on ...... and no guaranteed outcome.

I have visited sites with architects and listened to arguments that when they designed everything all was fine BUT they say the problem is the adjacent development which altered the natural flow so NOT their problem. These are environmental issues and I can't recall when the law changed regarding the need to undertake environmental studies during the design phase etc.

Let's not give false hope that you fill in claim form and 2 weeks later cheque is in the post.

This is Spain we are talking about and any policy whether it exists or not is sometimes found not to be worth the paper it's written on .....

Many developments this year had water penetration problems and most just got on with the repairs or rectifications rather than enter a 10 year battle.

If there are still unsold units then maybe developer might carry out repairs otherwise I would not be hopeful.

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Hi to all,

If the deeds were signed in 2008 and the build licence was granted after 2000 (which probably is), then the 10 year insurance must exist and should be incorporated to the deeds. Otherwise the Notary would not have authorised the deeds.

Kind regards,

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We too have had problem with flooding , water etc.   A claim was made to the Insurer who stated  that the developer had

in validated his insurnace as  he failed to paint the external walls of the propery when he was supposed to ( after 3 or 4 years I think ) .  We have been after the  deveoper to paint the property for ages now but he has always refused - he painted his own flats that he still owns  but not the rest . So what on earh do we do now. These b..... developers get their own way all time and now his insurnace is invalidated , although what on earth the painting has got to do with the flooding I do not know - just another Insurnace company trtying to avoid payment.

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We too  like most deveopments have had and still have problems with water , flooding etc so the community applied to the Insurance company who declared  our claim invalid as the developer had not painted the external walls of our property at the specified dates ( in fact he has not done it at all except for the apartments he still owns ) .   This was to be carried out as part of his maintenance contract .   What in earth do we do now as on top of not painting the walls , not sorting the water problem that we had prior to this  year's heavy rains but he owes us over 90,000 Euors in maintenance  costs.    What on earth has painting walls got to do  with internal flooding - good old insurnace comapnies  trying to  weedle themselves out of  a paypout .   Where on earthj do we the owners stand?   At least in the UK we have Watchdog - did anyone see it last night , in Spain as far a I can see there is no justice for the comon man when developers get away with sheer murder - and his sister had the ordacity to have a flat on the premises .

I get mad but what can we do .

 

 

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Hi again It is not an excuse to say the developer should paint if your problem is to do with land flooding (underground). In any case, even if the insurance does not want to take over, you should be filing a claim against the developer and it is for him to counter sue the insurance, the architect, or whoever he finds responsible for the floods. First step has to be to get a survey done to assess where is the cause of the damages and then start action soon (whilst the developer still owns properties on site he is still solvent). Feel free to send us a p.m. With further details if you wish and I will come back to you. Kind regards Martin

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Abolex

Part of the problem is many of these "problem developments" have no money because developer won't pay on unsold units so you are asking owners to commit to expenditure when the community is struggling as it is?

Is the developer solvent - probably not!!!!!

He already owes community and I would guess the mortgage on unsold units may well exceed market value so even if they win where will the money come from to meet the claim?

Insurance companies always deny claim and then the burden is on owners to hire experts to prove claim is within scope of limited 10 year policy etc

Certainly need to carefully consider if developer could meet a claim.

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Dear Faro You are probably right with regards to the solvency of the developer, but each case is different and it would be somethingg to look at. Also the responsibility could be transferred to the administrators. The Law allows it, although not many people know how it works and that it actually works. We have had several cases that confirm it works. But as said before, each case is different. What I never recommend is to sit and wait. Regards

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 Welcome back Abolex!

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Abolex

As this is a discussion forum would you please elaborate on such scenarios bearing in mind the majority on this site have more knowledge of UK legal matter than Spanish legal matters.

In the UK we would talk about lifting the veil of incorporation and/or trying to prove fraudulent or reckless trading and therefore making the directors personally liable. But even in the UK such courses of action are incredibly difficult to prove and also prohibitely expensive as these type of cases tend only to be heard in the high courts.

To be successful do you not have to prove the company was not properly managed but if the company is in genuine financial difficulties as a result of the current economic crisis as many companies are then that's just bad luck?

 

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Dear Faro, In Spain, the Law that regulates the companies (SLs or SAs) specifically refers to the responsability for the debts of the companies to be that of its administrators (personally liable) in some circumstances, which include abandoning the company, not filing bankruptcy proceedings when necessary or not complying with the Mercantile Registry obligations (such as filing annual accounts, etc). The procedure is not particularly complex, provided that there are legal grounds to go for the personal liability of the company administrators. Lifting the veil or fraudulent trading (which you mention in your post) refer to criminal responsibility of the administrators and what I am talking about is not criminal charges, but civil responsibility (economic at the end of the day). Kind regards

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