First occupation licence

I know of locales that have been converted (illegally) into apartments and rented out. That's illegal too, but it happens!

There's even an old office block in my town that's been converted into apartments by a large developer. Some of the offices are less than 30m2 and as such cannot legally be re-classified as viviendas (dwellings), but nevertheless they are being sold as studio apartments. The deeds will still show them as offices, however, and because they are therefore officially commercial premises, the VAT will be 16% instead of 7%. Illegal? Sure, so what? I wonder what our esteemed local Notary will make of it?

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hello maria,  i hope you read message and  please advise on the following comments we have recieved from our  lawyers on the 5/3/2008.   YOU CAN MOVE TO THE PROPERTY WITHOUT THE L-F-O IT IS NOT ILLEGAL AT ALL, WHO HAS ADVISED YOU?    I WOULD ALSO LIKE  ASK CAN YOU RENT OUT THE PROPERTY WITHOUT THE L-F-O.  MANY MANY THANKS ONCE AGAIN FOR ALL YOUR HELP AND  ADVICE ON ALL  MY PROBLEMS . WE WIIL BE FOR EVER GRATEFULL  . THANK YOU BILL MARSHALL. 

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Bill, I think you have many issues you want to discuss with Maria. She could easily miss seeing your posts here & there so you maybe should contact her directly. In fact change your lawyer, have Maria tie up ends. Your lawyer's telling you PORKIES. You know it, he/she knows it & we all know it !!!

I gave you Maria's details before but here they are again.

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What is forbidden by law and what actually happens are two entirely different things arent they? It is forbidden by law to take deposits from potential buyers without Licenses to clear the ground yet Aifos have been doing it (allegedly - just to cover myself) for years - just to mention one small item forbidden by law. Hypothesis and reality are sometimes worlds apart.

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Hello ,Hola everyone,

(PLEASE GET YOUR MUG OF COFFEE FOR THIS ONE! OR EVEN A GLASS OF VINO)

As  I previously mentioned  I am new to this forum,have posted already under NIE,but would like to share our story ,this is our third attempt to buy in Spain and will be our last if this goes wrong.We purchased an off-plan (I can hear gasps in the forum)back in November 2006 the land is rustic i.e pinetrees up in Murcia, very scenic we are phase 3 so the last part of the small development.There are villas on land of 5 acres so it is not an urbanisation.We saw electric pylons up on the sites ,and finshed villas and villas in construction ,we never ever felt we had to doubt the developement  it all looked legit .

We were asked if we would like the build A.S.A.P. quite unusual  I know , anyway we said that we had commitments elsewhere but was willing to except take over of the property in March 08.This is where the fun starts ,we have had an independant solicitor out of the region to look at all the paperwork,he has explained it was all legal  build licence etc ..,however there was something he did not understand that the contract states we are the purchasers and the builder is the promoter,but on the building licence it has my partners name put on it.as the auto promoter.

We were asked to go out for March this year to complete the deeds, and I decided that I needed to start asking  questions and through forums like this it has helped to create those questions,my first question to the builder was are we going to have mains water and electric this question got ignored on two occasions,finally the response was no not until approx 9 months and the reason given was the Lorca town hall are taking along time to issue the LFO.But we will be on builders electric and water and will not have to pay ,although this has not yet been agreed and  put in writing but I have read it is illegal for the builder to charge.

So this set alarm bells ringing, we agreed a contract that we were under the impression that we would be on mains electric and water it says in their brochures and we had paid enough for the build  that you expect to have the basic utilities ,we also never agreed to be the promoter on the build licence,it has been explained to our solictor that the builder can not apply for a licence in his name as the town hall do not want to see builders over developing on land of 5 acres .

So it has to be in my partners name ,would of been nice to have this explained  in the beginning but it has sent panic through us, as now we are told we have to sign otherwise we will be in breach of contract as they have built the house completed in February before schedule ,and kept to their side of the contract  and he has a business to run  and needs paying and it is not his fault the town hall are taking time to issue licences ,but we have explained we are not happy to sign without the LFO but we are in a catch 22 because they need us to sign to apply for the LFO because the build licence is in my partners name.

How confusing is this and what a situation to be in,all we can do is now have a written guarantee from the builder that if we do not get the licence within 9 months we get all our money back ,plus whatever we have spent on the house in that time i.e. new kitchen.They are prepared to sign this agreement at the notary,now you all might be saying thats good ,but  what happens if within that 9 months the builder goes bankrupt we only had a bank guarantee for the first stage payment  thats all they would honour, and that was hard enough getting that from them.

We cannot find anything bad about our bulider I have searched other forums and no-one else has seemed  to off  written about this problem we have ,but  us being cautious is surely  the right way to react  ,I do not understand why people have just signed in good faith believing all will be okay ,its too much money to loose.

I must also say that I have had already had GOOD advise from a couple of solicitors on here ,and it has been taken on board i.e Maria suggested too ask for the money to be returned in 30 days and also spanish solicitor quoting what he has written advsing the deeds to be changed ,but we were told it could not be put in the deeds its just a separate agreement. Maybe because its going to cost money who writes up the deeds?

we are in such a dilema  and also I need to mention the builder has got a bank to give us a mortage as the bank knows of the builder and his builds so is prepared to lend us the rest of what we have to pay without the FLO ,the notary is also the choice of the builders I wonder if that is because they will not ask to many questions ?????This situation  has made me very ill with all the worry,what should be a dream is turning out to be a nightmare.We are due to sign in April !!!!!!!!!!!!

Sorry it has taken so long- but like everything in Spain it is complicated.

 

Kind regards  which one will it be

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Personally I think it all sounds very dodgy - especially the bit about paying you all your money back if the LFO isnt forthcoming in 9 months. MY honest opinion is that you probably need to take additional legal advice as the brief you appointed previously seems to have left you in the dark over many issues. Guess its up to you but I would be treading very warily at this stage of proceedings. My view always is better to do things right than to do things quick and if it takes a little longer because you involve another lawyer - maybe Maria de C - then at least you should have peace of mind that you are not going to be left up "s?¿t creek".

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Hi Smiley,

All due respect, but do you not think the offer to repay us actually is a good point if builders are having problems obtaining the FLO because the Town hall is behind on paperwork then they have to come up with alternative solutions  to get a client to sign .Although it does sound a bit hypocritical for me to say that ,as I created another doubt  in my previous post with mentioning the builder could go bankrupt or declare he is to whatever suits him.

Also we are not rushing  in that is why the builder is getting frustrated ,because we wont just sign.It seems we have the upper hand here as the build licence is in my partners name.

However it is a catch 22  situation as neither parties can move forward without us signing,also I feel very grieved to think we will have to hire another solicitor, pay more money for what could be the same advise.Our solicitor even checked with Murcia  to see if the permissions have been given to Lorca to give these build licences , I think our solicitor would be very offended if we took the file away and seeked advise elsewhere the spanish are very honourable people,and he did save us from signing an illegal build before.

He also spoke to the town hall to confirm if there were  delays in the FLO  licences being issued  - it was confirmed this was the case.I think it would be a shame to question our solicitors integrity so late in the day and I am sure he wishes to carry on in his practice. I just felt it was a good idea to put my story on here ,so maybe if people are in the same dilema maybe it could help or that IF there is positive advise out there that we could adhere to that ,and will help our purchase go through more smoothly.

Seems to me the town halls need to get their act together then everyone can be happier in their experience of buying in Spain.

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Guess its up to you Pinetree but the impression I had from your first post was that your lawyer hadnt explained things to a level that was understandable to you at the outset - if I have got the wrong end of the stick then please forgive me but my view is that everything should have been made clear to you from day 1 as to exactly what you were doing and that your partner would be the promoter etc.If there was something in the contract that he didnt understand if he had been my brief then I would have wanted him to establish exactly what it was and the risks and possible consequences to me. You made the very good point yourself and you are quite right in what you say that you complete on the purchase and the builder could go bust if there are problems getting the LFO - how good would the money back offer be then? The fact that it is in your mind would indicate at least a degree if concern that it could happen. Even if you have something in writing you would be added to the list of creditors. If you think its worth the risk then ignore my comments.

Ultimately if there is no LFO issued then the property will prove nigh on impossible to sell on and it will prove extremely difficult to contract utilities in your own name.If he has a connection with a bank that will provide a mortgage without the LFO then it is a rare bird indeed - the mainstream lenders now require to see the LFO before signing Title Deeds to ensure there is no impairment to their security - this is even more the case where land is considered rustic. I guess if you think your lawyer is giving you best advice then be guided by them but at the end of the day only you can decide whether to trust their judgment and advice that is being given - i dont know who your lawyer and I am not for one moment suggesting your lawyer is not acting in your best interests but it is but it is important that you know it is not considered necessary here to be qualified to act in that capacity and for my money there seem to be a lot of grey areas that I would want clarified.

I had a client in similar situation about 3 years ago who had paid a 50% deposit - eventually moved into the house about 18 months ago but as of 6 months ago there was still no Escritura - the lawyer had confirmed to him that everything was legal and it looked a lovely house. He did manage to get a mortgage on the property from a smaller local bank but 5 mainstream lenders would not advance on the property as the Land registry documents did not stack up (perhaps those lenders were being too cautious - but then for me I would want the peace of mind) and the last time we spoke which was about 6 months ago he was still on the developers water and electric but the developer threatening to cut off the supply - at that time he could not contract his own as there was no LFO.

Dont forget there has been much recent publicity about a dwelling that was demolished where the owners believed they had a legal dwelling house so the more thorough one can be the better in my honest opinion.

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Hi Smiley,

Appreciate your comments ,you know I am convinced the only way we will know is to go and  physically get it from  the horses mouth, pay a visit to the town hall and look at the- I think its called the PGOAU and get proof that this is allocated land for building ,it has not been registered as rustic on the licence we were also told murcia are more relaxed about builds on rural as long as its not over developed.

Maybe  we need to get from the builder copies of the licence where clients  have already purchased on  phase 1   they should have their licence as their builds were done over a year ago and  it has been said they are on mains now so we can find out whos telling the truth im sure clients have not been paid to stay quite(lol).when we go out in April if all is not appearing to be right, believe me there will be no signing.

Also as I previously mentioned cannot find any bad remarks about our builder and they have done a few developments in Murcia so would he jeopardize his good reputation for one dodgy deal.I am sure there are clients of his who have used lots of different solicitors they all cant be wrong can they? emmmmm really  trying to convince myself arent I ? there must be some good stories to tell in the end, hopefully one of them will be mine.

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Bottom line, if you are following  the law then what have you got to lose in waiting for the LFO?
If I was in your position then I'd certainly want to check the existing legal situation as the law stands at present,  i.e. whether the developer can sue you for breach of contract if the LFO is still outstanding. ......perhaps Maria de Castro can comment on this, given your circumstance re the build being brought forward.
If they can't sue then doesn't it it make sense to hang on until the licence is made available? You should not be compromised legally on this as you have done nothing wrong. (I understand your concern that neither has the builder done wrong, but you can't be made scapegoat for a delay which could compromise you in the longer term.) Why follow an illegal route forward which could well prove highly risky?

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hello pinetree, we have been advised by two spanish lawyers that if the builder has not got the l f o licence he cannot force you to sign , this is spanish law , our builder  tried it on with us , but was told point blank no  L F O NO PEN TO PAPER, you cannot live in the building without it because  it may  have problems with safety etc, hope this helps and good luck for the future, bill marshall. ps if at first , second , third , you dont succeed try , try , try , again,

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Hello ,

Its good to see people responding,maybe someone can advise then that if we do not need to sign the deeds  then how do they apply for the  FLO as I explained in my previous post the building licence is in our name which means they cannot apply for the FLO until we sign.

Unless there is a way we can sign to go ahead for applying just  for the FLO without us signing the rest of the paperwork at the notary ,surely they must of realized that putting my partners name on the licence it would create problems.

I suppose I should also mention the builder said he would even sign for the mortgage and we would have to pay for the transfer into our name as the mortgage was arranged for this month we were meant to be signing at the notary on the 12th march but I was unwell and did not make the trip out.

The builder  also said we will have to pay for another valuation, but I have found out that should not be the case as the valuation was done end of Feb and it will last for 3 months.

I do feel as clients who are spending alot of money we are being treated badly like we are the bad guys here all we want is a legal house.They should be getting the Town council to sort out this problem why should we have to pay legal costs to sort out protection against something we were told was legal and  that they are loyal and trustworthy .Now we are just being bullied., because they want the final  payment of the house we have already paid cash for the first half ,its us loosing out investing so much without anything to show for it. Bill this is our 3rd attempt to buy in Spain and we are not going to try again.

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The FOL is granted to the same person or company to whom the Work license was issued. How is that you are going to appear as the petitioners ?

I am just curious.

Best regards,

Maria L. de Castro

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And really this is the type of thing that your lawyer should be helping you with to ensure that you do not get fleeced or involved in something against your best interests. Hence the reason for saying that if you do not think you are getting good representation then perhaps you should consider a second opinion but you will need to make that choice for yourself.

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Hola Maria and felix,

The contract has the construction company as the promoters but has us as the purchasers,-re the following of contract

1.that the promoter owns several plots of land located in the municipal boundary of Lorca (murcia)with surfaces of more than 20,000m2 each one and he has projected the construction detached houses with the necessary permission from the town hall.

2 that the purchasing party is interested in acquiring the following property it goes on to say a plot no and finca number

 3 that both parties agree to formalise the present contract of purchase which is carried out in the conformity with the following

First the company -------------- is selling the above mentioned dwelling and is clear of any incumbrances freehold and updated in the payment of local rates also clear of ibi and uptodate with payment of local rates we are paying the vat 7 % the commencment of the building will take place may 07 and the finalisation will take place in may 08 in case of earlier finalisation the public deeds have to be signed earlier.

As soon as the project is proofed the promoter will present the insurance papers.

The town hall of lorca needs approx 4-6 months time to grant the building licence .

Then it goes on about stage payemts and all running costs such as expenses and taxes which are derived from the granting of the public title deeds shall be satisfied by the purchaser .The declaration of the new building and plus valia tax will be paid by the promoter.

In the event of failure by the purchaser he will loose all the payments done upto this date .In the event that the promoter opts to cancel in realtion to the above he will refund the purchaser the double amount paid on the grounds of compensation for loss ad damages for breach of contract.Case of breach of the finalisation of the house the promoter will pay to the buyers the rent during the delay of the construction.

If any disagreemnt or difference arises in connection with the present agreement the parties submit to the courts and tribunals  of lorca and its superior.

 

This is why I do not understand the licence was put in my partners name?

 

Gracias pinetree

 

 

 

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How do you know that the licence was put in your partners name?

Have you ever  seen your Licence ?

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Hi

Two points that may be a consideration.

Many developers may go Bankrupt while many consder they have the upper hand on the L.F.O issue and loose their deposit.

If people are using the L.F.O issue to delay or avoid completing will the developers sue for breach of contract.when it arrives..

Dan

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Hola felix,

It was a scanned copy with a blue stamp on it from the town hall .

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Just Dan:

To consider too : the option to complete is always open all along the claiming procedure.
Best,
Maria

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