Occupation Licence

We completed in July 2008 and have a copy of the application submitted by the builder to the Town Hall for the LFO (May 2008).

Only 12 houses on our complex of 82 have been occupied and we are still on builder's supply for electricity and water - is there anything we can do to get our supply connected directly.  The builder has not set up any kind of Community (presumably because he would have to pay a share).

 It pains me to say it but why on earth were you allowed to complete without the LFO in place?  What's your lawyer said about this?  They have obviously not acted in your best interests here at all.  This is basic stuff.

You cannot contract services (particularly electricity) without the licence in place.

And I think perhaps a visit to the town hall may be in order to understand what the hold up is.  My best guess would be that some aspect of the development is illegal.

Let us know how you get on.

Hi Justin

Thanks for the response, it is very much appreciated.  Since my post we have had contact with the Town Hall who assure us the development is legal but that the builder has not completed the 'infrastructure' as required.  They expect this to be completed and the LFO issued soon!!!?

We have also now appointed an Administrator who is setting up a legal Community and investigating ownership of the empty properties - in the hope that the bills will be shared amongst more of us - hopefully things may progress with regard to permanent connection to utilities.

This message was last edited by kay2 on 31/05/2012.

Thanks Johnzx

That's useful information - I will pass on to our 'committee'

Many thanks

Hi

I am in the same position - I own an apartment in Marbella area and it has no LFO. can you tell me if I am within my rights to write to the town hall to say I will not pay IBI or wealth and income tax as my property is not legal?

I have a very small mortgage on the property ( and a lot of cash invested in it) so I would like to avoid handing it back to the bank but it seems to be a waste of time keeping it as it appears we will never get the LFO and I am not allowed to re-sell the property. It is very frustrating and confusing.

Thanks

Pamela

You say you 'lived' in your property for over 10 years, Johnzx. Obviously, you're not living there now.  How did you manage to sell your property (if you did sell it) without the LFO?

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There are also Notaries liabilities on lack fo occupation licenses since 2007-2008

Legal tip 325. First Occupation license ( Edited version)
30 July 2010 @ 09:53

The First Occupation License is a license which states that what it has been built  is adjusted to the  work Project who obtained License by the Local Planning Authorities.

The FOL verifies if the building can be assigned to its legal use, because it is located in a proper  planning zone and if  it meets the basic safety and health conditions. It also confirms that  the builder has fulfilled his commitments on urbanisation of the surrounding land.

Regarding FOL and completion, Consumers specialists state:

1.- The seller who signs the public deeds of purchase without FOL ( First Occupation License) is in breach of contract even if the house has been physically handed over, because the ownership rights that he is trasmitting are not valid for the use of the house till the FOL is granted.

 2.- The buyer can refuse to the signing of the deeds till the FOL is granted if the completion date was fixed for anytime after the end of the work, and the seller cannot cancel the contract due to this negative of the buyer until he fulfills his contractual obligations ( after obtaining the FOL).

 3.- The buyer can cancel the contract ( even after the signing of the deeds), with full devolution of amounts, interests and compensation of damages if after the completion date, either  the deeds having been signed or not, the building does not have the FOL.

4.- If the buyer decides not to cancel the contract, he must not occupy the house, even when having being formally handed over, because that would involve an administative infringement and because he can be deprived of its use by the competent Administration

Also , the Ground Act dated the 28th of May 2007 establishes in its provision 19 that the Notary deeds of " Under construction New Work " which are granted at request of developers when starting the building of a work require the existence of Work License. No Notary can sign a New Work deed without such license.

Provision 19 also establihses that the deed for the end of work will need the verification by the Notary on the existence of the First Occupation License and therefore deeds for the completion of the purchase business and transmission of ownership rights to Consumers cannot be granted without First Occupation License. In short words:  no house can be acquired without that license

 In October 2010 we bought a house outside Gandia and during the contract negotiations, the seller's solicitor specifically noted that the FOL was not included.  When I read the contract, I alerted my solicitor of this clause being specifically omitted and he didn't pay it much attention.  The house had been built by the owner who had lived there for over 10 yrs.  I said without the FOL the sale was not possible as I would not sign.  

Going back to the law quoted on FOL; "  3.- The buyer can cancel the contract ( even after the signing of the deeds), with full devolution of amounts, interests and compensation of damages if after the completion date, either  the deeds having been signed or not, the building does not have the FOL." 

I find it amazing that both set of solicitors thought nothing of it!  Anyway, the seller trotted back to the Town Hall and had it issued and I am in possession of it; the sale went through and we are very very happy with our holiday home.  My solicitor, who is very well respected in the area, said; "this is the first time I have ever completed a contract with an FOL ."  I wonder if that only applied to property being sold to non-Spanish?

As always, buyer be aware!

LadyleCamps

 I just love all these quotes on what the law does, or does not, say.  When we bought a flat some 12 years ago, the LFO was not in place (new and off-plan).  The builder went bust about 5 years later but still no LFO (solicitors blamed the town hall, the town hall blamed the builders etc etc)  However, mains electric and water was connected without this license.  When we came to sell, we asked the administrators for the license (still about 100 properties without this) and were told it was too late and they were now applying for a 2nd license as the first one was only valid for 5 years (this was now 7 years after we had moved in).  The solicitors said we could do the sale with a "boletin" and they wanted 600 to 800 euros to get it.  Fortunately I knew an electrician with links to Iberdrola who did it for 250 euros.  This was accepted without any type of occupation license whatsoever by both my and the buyers' solicitors.  Property had been sold on our same area without the licenses and the only sale I know of that fell through was a couple who had their mortgage application rejected because of a lack of this license.  For some reason, no one (apart from the bank) payed the slightest bit of interest in the lack of a license.  My flat has been sold on again by the people who bought it from me with, again, no license being in place.  

So, we had electric and water supplied without the license, it's been sold twice without the license and the town hall still hasn't issued them even though the utilities are in place.  I put one buyer in touch with the electrician I know and he completed a boletin for them which was accepted.  Seems a bit of a hit and miss type thing on what is and isn't acceptable despite all the laws about them.  

Thank you all for your replies - and I know with most places you can still sell the property but we have been told we can't. alos the grounds are getting in such a bad state no one would want to buy my apartment!! there are only 25% of the apartments sold this means that the management fees dont cover the cost of electricity , water and maintenence of the grounds and the buildings.

The interesting bit is the legal quote from Maria - thank you for taking the time to send this - however when you speak to any lawyer in Spain they dont want to get involved and the cost of maybe even trying to go this route and get no result is just too high.

Regards

Pamela

Maria

Having re- read your reply - the fact that those of us that have completed on our apartments have actually occupied them, does this mean that any legal proceeding by us to re- cuop any monies is null and void? Also who would we be claiming against as the developer has gone in administration? The fact is we were all told that the licence was all OK - in basic terms - we were lied to. our banks are also at fault as they should not have issued us with the mortgage knowing the FOL wasn't in place.

It is all very confusing for us as this would not be allowed to happen in the UK.

Pam