There is an article on that in this website, called " License of First Occupation and completion". The configuration of my Google does not allow me to past the link so, here you have the text. Enjoy! ( I have highlighted the definition you asked for)
The fact of having the purchase deeds signed before a Notary in Spain means that your house “has been born” to the “legal world”. It is necessary a previous or simultaneous title which is the “New work declaration deed” over the land. The Notary deed will allow you to transmit the house. That is in the civil and registry level.
The developer must also fulfill some requirements before the Public Administration ( i.e.- before the Local Council: planning obligations, reparation duties…) therefore, the Local Council won´t proceed to the granting of the First Occupation License (Licencia de Primera Ocupación) till these requirements are met.
The lack of FOL can impede the owner to have the power supplies connected : water, electricity, telephone, gas… it can even imply an impediment to have the house as registered domicile in the Local Council “ Padrón” registry.
The proper definition of the FOL is of a license by which it is checked that what it has been built is adjusted to the Project. The FOL verifies if the building can be assigned to its legal use, because it is located in a proper planning zone and it meets the basic safety and health conditions, it also confirm 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 be opossed 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 ( by 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.
Written by
Maria de Castro
Lawyer
Maria de Castro is a Spanish Lawyer and the Director of the Law Firm www.costaluzlawyers.es.
She specializes in advising private foreigners in Spain and making the Spanish adventure a good dream. You can contact her at mldecastro@costaluzlawyers.es