Certificate of habitation

We are due to complete on our new property in the next few months. we have asked our solicitor to ensure that the certificate of habitation is in place before completion this is their reply:

this seems to indicate that we should complete without it. we are concerned is this standard practice? and does this affect the builder's guarantee?

http://www.eyeonspain.com/Secure/articles/article.aspx?article=/licence-first-occupation.aspx

After the recent Ground Act is not possible to sign without FOL ( First Occupation License)

Hola Maria,

I have a question for you please can you explain ,so on item 3 . How would we go about getting our money back ,are you saying this can be done if there is only a bank guarantee in place? if not what process do we  need to obtain  to get all monies back from the builder and surely this will take ages through the courts.

Also will the builder still have to pay our rent as you say we could not live in the house ,so we would have to find other accomodation,and in our contract it says if he goes over the build schedule he has to pay a daily rent ,is that still applicable where the FOL is not in place?

Regards pinetree

Hola Maria,

Just also wanted to add if you cannot move into the house, seems a worthless task to sign the deeds as all we are doing is handing over money to the builder and getting nothing in return.

Logic says we should hang onto our money and we earn the interest while waiting for the FLO ,and what happens if you are signed up for a mortgage your paying monthly for a house that you cannot live in ,and where do we legally stand in payments for community services if the deeds are signed are we not liable for those costs ? paying for having your rubbish removed (em what rubbish ) this really does not seem a wise move to me ,especially as the Euro is so bad ,it seems like a no win situation for the purchaser,I seem to be using that phrase quite a bit in this forum.

Dear Pinetree:

Please find answers below in bold green ( same text of your email):

Hola Maria,

Just also wanted to add if you cannot move into the house, seems a worthless task to sign the deeds as all we are doing is handing over money to the builder and getting nothing in return. Correct.

Logic says we should hang onto our money and we earn the interest while waiting for the FLO ,and what happens if you are signed up for a mortgage your paying monthly for a house that you cannot live in , have you already signed for the mortgage?  Banks are not granting mortgages to not licensed houses generally anymore. and where do we legally stand in payments for community services if the deeds are signed are we not liable for those costs ? No, you are not as far as you are legally not completing on the house.  paying for having your  your? rubbish removed (em what rubbish ) this really does not seem a wise move to me ,especially as the Euro is so bad ,it seems like a no win situation for the purchaser,I seem to be using that phrase quite a bit in this forum.

Hola Maria,

I have a question for you please can you explain ,so on item 3 . How would we go about getting our money back ,are you saying this can be done if there is only a bank guarantee in place? if not what process do we  need to obtain  to get all monies back from the builder and surely this will take ages through the courts. Do you mean your guarantee does not cover all your moneys?

Also will the builder still have to pay our rent as you say we could not live in the house ,so we would have to find other accomodation,and in our contract it says if he goes over the build schedule he has to pay a daily rent ,is that still applicable where the FOL is not in place? Of course it is. Start counting.

Regards pinetree

  Hoa Maria,

I am building a house on a plot in Costa Esuri Ayamonte and have put together the following list of documents that I will need to have at the end to show that my house is legal.

Along with my "Escritura de compra-venta" for the official purchase of the plot, signed at the notary's office and registered in the property register to show ownership of my property, this is a list of documents that are required before I can be certain that my occupation of my property at Esuri is legal.

1. “Copia simple” of my title deeds (to show there are no outstanding charges on the property that I do not know about).

2. “Licencia de Primera Ocupacion” (The most important this allows me to move in and get the utilities connected etc. I will not get this without the next 3 being available).

3. “Boletin de Instalaciones de Agua” (You need this to get my water connected).

4. “Certificado de Instalacion Electrica de baja tension” (To get my electricity connected).

5. “Certifcado de Instalacion individual de Gas” (To get my gas connected).

6. “Estatuto de comunidad de propietarios” statutes of the Community of Owners as the plot is situated on an urbanisation and some paperwork from the administrator of the urbanisation so I start to pay community fees by direct debit.

7. The manuals etc of the oven, vitro, hob and gas boiler.

8. The remote control (Fob) for the gates/barriers.

It should also be noted that with all the troubles with property purchase in Spain if I am selling a property the law now says that the key documents above should be available to the estate agent before he markets my property.

In addition I will need these documents to build on the plot.

"Informe urbanístico" from the town hall telling me what I can build on a the plot.

“Licencia de obra mayor” planning/building licence from the town hall.

"Certificado de fin de obra" from the architect when work is finished

"Cédula de habitabilidad" from the town hall or regional government declaring that the house is fit to live in.

"Declaración de obra nueva" in the form of a notarial escritura, whereby I inscribe the house on my plot.

My question is do all ayuntamiento issue both documents “Licencia de Primera Ocupacion” and the "Cédula de habitabilidad" or will I only get the Licencia

Regards,  John.

Hola Maria,

Thankyou for your replies we do not have the bank guarantee to cover all the money, and originally was only covered for half of the payment we made and that was dated to end this January we had to demand this it was not offered also as I understand a guarantee cannot or should not have a closure date on it.

Our situation is a bit more complexed I think,as the builder named us the promoter on the build licence without our permission,one would think that is not a problem but when it comes to the FLO we see it as a problem as we are the licence owners, so it is our responsibilty to obtain the FLO,and now the builder is stating that we have to sign the deeds so they can apply for the FLO this is apparently a local rule in Lorca.

So we are in a catch 22 situation we have asked our solicitor 2 weeks ago to demand a bank guarantee to cover all our monies and can you believe we have not heard a thing we are due to sign on the 23rd of this month.We are waiting for the bank  to confirm that they are aware there is no FLO in place as this mortgage has been organized (wait for it) by the builder.The bank is prepared to lend on the grounds they know of the builders reputation and the houses he builds.

regards pinetree

Just wanted to say thank you for the replies. Most helpful. We have been over to Spain for a few days and talking to a few of the neighbours who have moved in without FOL.

We have spoken to our solicitor and confirmed that we do not intend to complete without the FOL in place. It does however leave us in a dilema--- We have a house that we have part paid for , but can't use.

the completion date is 31st October 2008. the property is nearly finished now--does anyone know if the builder goes over this date ie completion does not take place because FOL is not ready what rights we have to get all of our monies back? or do we have to play a waiting game? 

Hi Micky P

IN MANY CASES THE WAITING GAME IS A VERY DANGEROUS GAME TO PLAY AT THE MOMENT WITH THE CREDIT CRUNCH.

Every solicitor worth their salt will advise you do not complete L.O.F even though up to recent it was considered the norm to do so in some areas.

From what you have posted it looks as though you will have to complete or loose your deposit./I have one property 4 years late on completion and the courts are saying that delays are acceptable.I am one of thousands

Delays on the property completion due to no L.O.F also is holding little water as the courts are saying that this is not the developers fault.

Yep thousands are playing the waiting game and thats the reason many,many developers will go bankrupt with the obvious outcome..

Now its a very expensive bit of paper that you have at the moment and advise you seek legal advice from your solicitor regarding your individual situation, some are advising to complete as they have something tangible at the end.

Of course this will be dependant on your solicitor checking that the L.O.F should or will  be issued.

Why not suggest you hold a bond /sum of money reliant on the L.O.F being issued.

Now I repeat you must take advice on your situation and while forum advice is welcome the one fits all cannot apply.Its not their money after all ?

ONE THING TO BARE IN MIND IS .  "HOW CAN THE COURTS GO AGAINST THE BANKS OR DEVELOPERS AS THIS WOULD CRIPPLE THE ECONOMY ,YOU ARE TALKING HUNDREDS OF THOUSANDS OF PROPERTIES"

This last statement is only my view/my opinion and should not be taken as any form of advice.

Just Dan

Thanks for the reply Dan, you put into words what we were thinking. What a dilema!

Micky P

No problem and in the end you do what you feel is right for you.

Do you feel that you are paying a fairish price for the property and that in time after the rough ride that is coming it will hold well when the market returns

IS IT IN A GOOD area if not you may wish to loose the deposit as the you may loose that amount anyway if its not.

Likewise I was faced with the same situation as you and completed ,(a bird in the hand and all that.)Add that this is not on the property I was mentioning earlier as thats another story.

Its seems like a case of damn if you do damn if you dont, My advice was that the L.O.F will follow and I would have to complete or loose my deposit anyway so not wanting that and with the worry that the developer could very well go pop I grabbed the lifeline.(may have no mooring but I grabbed it anyway and to be honest I am glad I did as at least I know where I am)

Dont blame or look to say who is right or wrong as only the future will let us know that.

Whatever you decide I wish you well.

Just Dan

This is all very worrying. We are waiting for the same piece of paper for an apartment that we have been waiting four years for - 2 years over the completion suggested in the contract! Clearly this is not unusual. However, our mortgage company will not hand over the money until the LIcense is in place, quite rightly in our view - we are glad that someone seems to be acting responsibly on our behalf.

 The LIcense has apparently been applied for but no-one seems to know when it will be granted, most other buyers on the development seem to be going ahead without it. We do have bank guarantees for the large sum of money that the builder has had for four years, and we are told by our solicitor that we are entitled to cancel because of the delay if we so choose, and receive our money back with interest. This is apparently our legal right, but I guess there's a lot written in the law that doesn't get acted upon?!

Beginning to wish we'd just stuck with the camper van!

The house we are hoping to buy is really lovely. We were there a few days ago and the whole development seems really good. It is in a lovely area and some really great neighbours who have completed without the LFO.

However we wish we knew back in may last year what we know now (Only ourselves to blame, we thought we had done our research, but obviously not enough). We wouldn't have been so keen to hand over so much up front, they really do have you in a difficult position, which they fully exploit!.

We are going to press ahead and insist that we do not complete until the LFO is in place. We have made that clear to the solicitor.

But I think as things progess we are going to have to re-assess the situation .   

We have now heard back from our solicitor, who has finally come around to our way of thinking   . She has informed the builder that we need the LOF before completion.

So fingers crossed, everything will be okay., the property is just about finished and the completion date is supposed to be October. We wait with baited breath! 

Good luck Micky P.

October is not to far away.

One thing to be aware of is that after the date when your property is due to be handed over and if it doesnt still have the L.O.F.

The L.O.F could in many cases take years to sort and I am aware of one development that buyers have lost their case and are instructed  pay the developers back date interest and service charges to in this case 2006.

They still do not have an L.O.F but the courts say that this was not enough to not complete as the developers were claiming it has been issued by default through the administration in silence ruling which is supposed to be the law.(If there is a law )

Some courts and the law says that it may be illegal to complete without the L.O.F and indeed its supposed to be illegal to even live in a property without one.

NOW IF SOMEONE CAN TELL WHAT THE HELL WE ARE ALL SUPPOSED TO DO WHILE ROME BURNS THEN LETS HAVE IT.

The courts are perhaps siding with the developers as many investors are using every excuse not to complete as they cant ,the plan being to sell before completion.

Also the courts are aware that the market and the Euro rate is another reason many are not completing and using any excuse.

It is estimated that 50,000 +properties in Marbella alone are habited by people for years with no L.O.F even though the majority have mortgages.

Has you solicitor checked the financial status of the developer and if he is able to fund the interest payment until such time as the licences are issued as this is an important situation you may wish to look at.

Again wish you all the best in this complex and risky situation that none of us should have been put in.

Just Dan