Most Commonly Asked Questions on Completions and Snagging Inspections

Published on 13/11/2007 in Buying Process

New home snaggingFor the last 3 years InspectaHomeSpain have been inspecting new build Spanish properties and with experience of checking more than 1500 properties, we are still amazed how often buyers really don’t understand the Spanish buying process. We are never sure if it’s the sunshine, idyllic surroundings, the relaxed lifestyle, or just the cheap booze, that results in the buyers leaving their brain on the plane and not really knowing what they have bought or the idiosyncrasies of Spanish system.

InspectaHomeSpain are totally independent of any developer agent or lawyer and provide a professional new property inspection, SNAGGING, service which has resulted in us being involved in us helping to manage the repair process, assisting dealing with the developer on behalf the buyer. InspectahomeSpain have gained a great deal of specialist knowledge means that we are often asked questions on all aspects of the purchase and this document have been created to answer common questions generated from our website www.inspectahomespain.com and from customers.

When purchasing a property in Spain, one of the most important pieces of advice is that you employ an, INDEPENDENT LOCAL LAWYER. In Spain it still remains possible for the same lawyer to represent the buyer, developer and agent, not an ideal situation when there is any form of dispute or legal action. The lawyer should be local, based in Spain, because building regulations vary in each province of Spain. Remember that often the agent or developer only gets paid when you pay the balance for the property and we have many examples where, if there is a dispute the lawyer is really not interested, especially after completion. Even when lawyers have the best intentions, estate agents can use a close relationship to put pressure on lawyers to cut corners and lawyers sometimes pay estate agents part of the fees they receive, in return for introducing clients.

Q: What should I be asking a developer prior to completion?

A. The call that you normally receive from the agent will simply state that the property is ready and that you need to come over, or instruct your lawyer, to complete the sale, and pay over the balance of money but there are a lot more questions you should ask, prior to making your travel arrangements. Forums help with exchange of information, but you should be well prepared when you arrive to carry out the snagging inspection, and sign at The Notary, because what you actually find on arrival can be very different to what you believe you have purchased. Asking the right questions or getting your lawyer to ask the right questions can often avoid wasted journeys and expense.  

When you buy a property off plan you should get a sales contract, drawing with dimensions and a specification sheet of what’s included. The sales contract may also include what communal facilities are included; pools gardens and parking areas. Sometimes these may not be completed, especially in the early stages of the development.

When you are asked to complete you should ask the agent/developer for a written confirmation that the property meets the agreed specification and if that any white goods furniture and fittings, if included, have been installed, that the communal areas are finished and able to be used.
Remember if you are relying on rental income to fund a mortgage a property with no communal pool, where there is unfinished by building works, will be much more difficult to rent.

Will the utilities be connected when the inspection is being carried out and will the property be cleaned?
 
Q: What is Certificate of Habitation and why is it important

A. There are a number of key differences in the purchasing process in Spain, one being the regulation which requires that, once the property has been finished, an official from the planning department of the municipal authority must inspect the property to ensure that it complies with regulations for newly-built residential properties. If the property conforms to regulations it will be granted the appropriate residential-use licence by the local government Certificate of Habitation (Cédula de habitabilidad o licencia de primera ocupación). Due to the demands on the Town Halls there are backlogs and it can take months get these licenses issued. In Spain there are thousands of properties that are still waiting for these Certificates. Without the Certificate you should not be using or renting out the property and rental agencies will often ask for a copy, before they agree to rent out the property.

On a recent UK TV programme, some owners that were having major problems with water and electricity supplies were described as legally squatting in their own properties but it was ruled that they had no legal rights to demand utilities form the local suppliers.
 
The process requires that the developer produces a series of technical Bolletins that verify the specification and installation of the electrical, gas and plumbing, a copy of the building licenses for the properties and communal areas and are not automatically issued as, we have examples where they have been refused based on the inspectors findings.

The consequences of not having this Certificate are numerous including those national utility suppliers water; gas and electricity are not permitted to make permanent connections to the property so the developer should provide services until the Certificate is issued. The Town Hall will not recognise the property and, as you will not be paying local taxes you may not be able to register on the Padron, the local electrical role, and obtain medical registration or schooling for children.

The other issue comes when you want to sell the property as it can take years to get these Certificates and they are not automatically granted. When you but the property the developer may have a preferred mortgage arrangement with a bank that would not require The Certificate of Habitation. When you want to sell the property an independent bank may refuse to grant mortgages without a Certificate of Habitation.

The type of advice on this varies but most independent lawyer’s advice is that you should not complete on the purchase, unless the Certificate of Habitation has been issued. Your lawyer should ask the developer about the issue, prior to the snagging inspection, and provide you with a copy.

The developer may state that the Certificate has been applied for and will be granted within a set period and in this case you should ask for a copy of the application and get the lawyer to check the normal processing period at the local Town Hall.

Q: What is builders supply and how can this affect me?

A: As explained in the previous answer you cannot get the main utilities connect by the national suppliers until there is a Certificate of Habitation for the property has been issued as suppliers require proof that the installation is safe and checked. Without the Certificate the developer is legally required to provide services, commonly known as BUILDERS SUPPLY, until the Certificate is issued, and a little know fact, is that legally they should not make any charges for the supply, Many developers make a charge if they offer to manage the connection process as in Spain you have to pay a fee to get the services and meters installed, normally around €450. If there is a charge made by the developer you should ask the lawyer to clarify exactly what the charges are for.
 
Builders supply is provided either by central meters installed, with temporary supply cables for electricity, and hoses for water, running around the site, or from a local generator. Free electricity and water seems attractive however the local press regularly carries stories highlighting problems including where the developer hasn’t paid the bills and services are disconnected or disappeared altogether. Other problems include low voltage, especially as more people move in; we have measure power as low as 140v and power spikes and fluctuation, again measured between 145v – 250v which can damage electrical appliances, especially TV’s, videos and computers.   With water the most common problem is low pressure ana discontinuation of services, especially if the water is provided from tanks. Key to maintaining these services are a 24 hour emergency contact number for when things go wrong.

Q: Why is water & electricity not automatically connected to the property?

A: In situations where builders supply is not connected and a Certificate of Habitation has been issued normally water and electricity will not be connected because, in most regions of Spain, the utility companies will only connect services after the buyer has completed and owns the property It can take weeks, or on one large development in Murcia months, to get services connected, months before you can use the property. Your lawyer can and should help you with this by completing the forms in advance providing your bank details, passport and NIE number, and checking how long the connections will take after completion. Unfortunately plumbing and electrical defects are common in new properties and only become apparent after supplies are connected.

Q: Where are all the normal fixtures and fittings?

A: remember the earlier advice to check the written specification however buyers are often surprised, in comparison to the UK, what is not included inside the property, and they only find out on the snagging inspection, that there are no light fittings, not even a ceiling rose and holder fitted only wires hanging down from ceilings. No bath and shower screens and sometimes not even a kitchen.  You should carefully check the specification sheet because developers do make mistakes, they will try to save money, and just because something is fitted in the show house it does not automatically mean that it is included but make sure that you budget for these additional items.

Q: What is snagging & why is it important?

A: Once a property is nearing completion, the agent/promoter/developer will usually contact you to arrange an inspection.  Some developers insist that you complete, sign for the property and pay the balance, before you inspect the property. From our experiences our advice is that you should REFUSE TO COMPLETE unless you or an independent party have first inspected the property and produce the snagging list. You should get your  lawyer to insist on this as this is a major investment and there are too many examples where buyers have found properties with serious construction defects and water damage at inspections carried out after completion, one example where a property could not be occupied for 5 months.

The best analogy is buying a new car, paying for it, and then finding that one wheel and the engine are missing, you paid for it, cannot use it, but it is OK because the parts are on the way and will be here in 3 months.

The agent may tell you that you must compete before inspection and you have 15 days, after completion to find any defects, and then an additional 12 months for any more defects so you won’t have any problems.  Getting the developer to carry out the snagging repairs, after they have paid in full can be a more difficult. If the developer is confident that the quality is good then there shouldn’t be problem allowing somebody to inspect the property, before completion, however you have no right in law to insist on this.

The other reason given is insurance, that there is no cover that allows a third party, namely you or your agent to access the property prior to completion, which is not correct as all sites legally have to carry insurance for third party public liability.

The initial snagging inspection is vital as will enable you to find any faults which affect the use of the property. Normally minor ascetic defects like  the ceiling or walls requires re-painting, broken tiles or poor grouting, the sink leaks; the patio is not level and doesn’t run to the drain or more serious problems like they haven’t even started to build the pool or roads around the property.

The snagging inspection is important as you should be checking for defects and also that the property meets the agreed specification, that the communal areas are completed, and that you agree the process for rectifying the defects and of course the timescales for the repair work.

Major alterations or omissions from the agreed specification can result in the buyer being able to withdraw from the contract and receive a refund and compensation (bear in mind that this sounds a lot easier than legal reclamation may be in real life!)

Q: When should I carry out the snagging inspection?

A: It is important that you inspect the property prior to completion, ideally at least 10 -30 days prior to completion. This may allow you to have more control of the process and you will not pay the balance of money until the snagging is completed.

Most developers will ask that you inspect the day before completion but by using a good lawyer he can negotiate an extended period, between snagging inspection and completion. This inspection can be carried out by an independent inspection company acting as your agent who can save you time and money on flights, hotels and car hire.

Q: What is the normal snagging process?  

A: The process varies by developer although the legal obligations of the developer remain the same and normally a representative from the developer perhaps somebody from the agent will accompany you on a visit and look for defects. The property should have received a builders clean, ask in advance if this is done, and if the property is dirty you should refuse to inspect as it is difficult seeing scratches on windows or damage to ceramics if they are dirty. The aim is normally to minimise the amount of snagging defects and the agent, and a couple of representatives from the developer will be peering over your shoulder, listening to your comments normally accompanied with sharp intakes of breath, head shaking and shrugging of shoulders.  Common comments include that finish is normal for Spain, or that it’s meant to be a rustic finish but you should insist on the same standards as you will see in the UK.

Never accept comments like, this is normal for Spain, that we cannot put this on the list or that the show house looks the same as your property so you have to accept it.

Remember the site representative’s work for the builder, the agent is keen to get you to complete, because of payment of commissions and they are rarely equipped to carry out a professional inspection.  You can get more information on the process from our DIY snagging guide, but as a minimum you need good lighting, a spirit level, mirrors, cleaning materials, camera to record the defects, tape measure and a pen and paper to make your own list. You should also carry your sales contract with the agreed specification.

The initial snagging list is often written in Spanish, so it is important that you make your own list and, before you sign anything, check your list against the Spanish list as items can be missed.

One common problem is where the developer not only lists the defect but the action required to rectify the defect, an example being a ceiling or wall which is uneven and the developer writes repaint. Unknowingly you sign to agree the action where the area really requires re-surfacing and it is better to use terms such as ¨make good¨. If a door or window requires replacing make sure that the list states ¨replace where a repair is not acceptable   

Most companies have their own form, which is signed off by all parties but if you do not agree the list you can refuse to sign it. The list should also include an agreement from the developer on how long the snagging will take to repair, the normal is 30 days but check if this is working or calendar days as, if you include holidays and weekends 30 working days can be up to 8 weeks.

Another good tip is to get your lawyer to include the list, when signing at the Notary, which will then make it part of the contract and make it easier to resolve future issues.

Remember that the priority for the developer is completion of new properties and cash generation so resources may go into the new completions, not repairing snagging defects.

Q: What are my rights when snagging and completing?

A: The most common question we get is ¨can I refuse if there are snagging defects and only sign once the snagging has been repaired¨ and the simple answer is no. To clarify normal acceptable snagging defects are only ascetic, cracked tiles, poor paintwork, damaged woodwork, windows  and doors that don’t lock, leaks and uneven walls and ceilings, and these can be easily rectified. These types of defects may not constitute sufficient grounds that would allow you to refuse to complete, and the developer agent and your lawyer should know this. . More serious defects including water damage structural defects and cracking, items missing and variances from agreed specification can constitute grounds for not completing but this is where the advice and help of an independent lawyer is important and collection of documentary proof and photographs vital. . The other ground to refuse to complete may be lack of builder’s utility supplies or The Certificate of Habitation.

The legal requirements for developers in Spain to deal with building defects are as follows:

First 15 days: During this ‘honeymoon’ period, you can report defects to the developer, who then has 28 days to rectify them. Major alterations or omissions from the agreed specification can result in the buyer being able to withdraw from the contract and receive a refund and compensation (bear in mind that this sounds a lot easier than legal reclamation may be in real life!)

First year: During the first year the developer is generally liable for all defects reported within this period. The debate with this is often what constitutes fair wear and tare

Second and third years: Over the next two years, the developer is still responsible for repairing major defects that would make the property inhabitable. This could be anything from a boiler malfunctioning (no heat or hot water is considered to make a property uninhabitable) to burst pipes (no water) or other factors affecting the proper enjoyment of the property such as defective roofs, ill-fitting doors and windows.

First ten years: The developer must take out seguro decenal insurance. This is a ten-year insurance policy that guarantees the costs of repair in the event of a structural failure in the building and this will be backed by an insurance company and should be attached to your deeds.

Q: Can I keep back a percentage of the payment till repairs are completed?

A: In the UK retention, part of the overall value of the property say 5%, can be held back until the property repairs or building work is completed.  This is not common practice in Spain but you can request this, especially if you have concerns with the developer or if communal areas have not been completed. The developer has no legal obligation to agree this and we advise that this should be negotiated by your lawyer as part of the initial sales contract.

Q: What do I do if the builder doesn’t repair the snagging?

A: With the developers the key is the paperwork and making sure that there is a written agreement on what work is required that is clear, and the timescales for the work have been agreed and signed, and this is achieved by insisting that the lawyer has been involved in making this part of the contract. The legal process of getting a company through the Spanish Courts is lengthy and should be avoided.  Many buyers often give up and end up doing their own repairs.

During the completion process you should make the lawyer aware that, even after completion, you expect him to assist you with the snagging process.

Site resources will normally be committed to completing new properties but when dealing with the developer our experience suggests that you, as frustrating as it can be dealing with the developer, will not get anywhere by ranting and raving, you need to use the systems available and stick to the facts. It can easier to get repairs done while you are onsite if you can put up with the comings and goings of the builders and key this is a friendly maintaining relationship with after sales department and foreman.

 If you are on a urbanisation chances are other people are having the same issues and a Communidad, a community of owners, may have been formed, with an Administrator and committee, and this type of issue is something that should be dealt with by the Administrator and the legal costs sharing amongst the owners.

There is a good system in Spain that allows you to make a formal complain against any business that deals with the public and for this complaint to be investigated and dealt with by an independent third party There is an excellent book, You & The Law in Span written by David Searl and available at most Spanish airports which explains the process.

Key to the process are the Local Town Hall which is always a good place to get information and help as The Law of Local Administrations requires the Town Hall to accept and register and investigate complaints against businesses in their area

Larger town halls maintain a dedicated consumer support department called Oficina Municipal Informacion al Consumidor, OMIC, to which you can directly report issues as they are required to help and process complaints. OMIC are very helpful, it is a great place to start with any form of complaint, and we have real examples where they have got results and even compensation for buyers.  Please note that they have no legal power to punish offenders but they act as a control point & communications point to advise the proper authorities

All establishments that deal with the public are required to make available the Hoja de Reclamacion, the official 3 part form which can be completed in English. The business should display a notice, stating complaints forms available and if the business refuses to provide one you can go the police, who will come with you to the business and if they refuse to provide the form they can be fined up to €6000.

Often the attitude of the business changes totally if you ask for the form as they then realise that you understand the system and there are example where businesses have been stopped from trading until they have resolved customer complaints.

We have, assisting buyers with this process, seen real results getting problems with boilers, electricity, and drainage resolved within hours on the basis that we agreed not submit the complaints form.

If you cannot get the form the business, or if you want to avoid confrontation with the owner, you can go straight to OMIC as they have forms and they will help you prepare the forms.  You have to do this in person, submitting them while you are in Spain, and they cannot be sent in by post or e-mail but you can get your lawyer to complete them on your behalf. You must maintain regular contact with OMIC to progress the complaint

There is a more details overview of the process, copy of the form, and much more information on contracts, Tax, and Community Law in the book.

Q: What about security & safety what do I need?

A: With security the key message is prevention, visible measures that make it more difficult to break into your property so they go somewhere else, and these should be fitted immediately after completion as statistics show that 70% of break-ins on urbanisations happen within the first 6 months of the first owner moving in

The first thing to do, after you have had your snagging done, and before you move furniture in, is to change the main locks in the property as a large number of people will have had access to your key and potentially been able to get a copy made. The charge for a lock change by a reputable tradesman should be for supply and fitting, less than €40

The locking mechanism on the patio doors and windows is basic so we advise the fitting of the screw bolt type locks, cost around €25 per door or window and a basic door chain and bolt on the front door.

In Spain an increasing number of builders are recognising the security issues and are now fitting grills and alarms as standard however on houses normally only grills fitted as standard on the ground floor. I assume that this is because Spanish builders believe burglars can’t climb, but on a serious note, again check the specification and if grills are included it can be cheaper to get them fitted as the property is being built plus all of the grills will match.

The opportunistic thief is not interested in your TV or DVD player but in your smaller more disposable items such as passport, cash, credit cards, camera, mobile phone and car keys so the fitting of a floor mounted digital type safe is a must.

External security can be enhanced by the installation of PIR type lights which light up if somebody approaches the property and are now available in many more styles that just the old floodlight type. You can also buy standard type energy bulbs which have a built in photo cell that turn the light on at night automatically and can be fitted into a standard lantern, giving the impression that the property is occupied. The other option is to use a low cost timer on a standard table or floor lamp to turn lights on and off.

Personal safety again is important consideration, especially fire and gas safety, and a smoke alarm is frequently not provided in Spanish homes. Increasing numbers of properties now have gas so a carbon monoxide alarm is a must however these are difficult to buy in Spain so bring one form the UK. In Spain and you are renting out there is no safety certificate system however you are required to have a fire extinguisher and blanket fitted in the kitchen plus a first aid kit is useful.

Q: What do I do about furniture, should I buy a package, should I bring it from the UK?

A: Spain has a fantastic selection of furniture, with similar pricing to the UK, and if you are buying in Costa Blanca, Murcia regions is that you can now go off to IKEA in Murcia and. if they have it in stock, collect it take it away. It’s knowing where to look that’s key as process vary greatly between shops so you should plenty of time to look around before buying anything. We have an example of the same item, a wicker garden suite, varying by €300 in price at 2 retailers within 10km of each other. Most retailers don’t supply from stock and it can take 6 – 8 weeks to deliver, especially for sofas and beds.

The way that you furnish the property will vary, depending if the property is for your own use or for rental income, for example in a golf area 2 single beds that can be zipped together is a better option than a double bed as it makes it attractive for 4 golfers sharing. A dishwasher can be an unnecessary and costly extra as they can be expensive to run and encourage the renter to eat in the property. Leather sofas can be more practical, especially with people using sun cream which stains fabric suites. Sofa beds seem a good idea but the cheaper models can be uncomfortable and they wear quickly.

You should come over on a shopping trip in advance of completion, measure up your rooms and order your furniture, as most shops only ask for a small deposit, and they will store items free of charge. With furniture and white goods most retailers unpack, install items and take away the rubbish when they deliver, free of charge.

If you want the easy option the furniture pack is a good option as the company will deliver and fit everything so you can simply move and use the property. Remember in Spain for any purchase cash is king and you should always ask for a cash discount.

People expect the charges to ship goods form the UK to be high but for around 500 pounds you can get half a container load and many people, especially if moving to Spain ships their own furniture

 

Written by: Roy Howitt

About the author:

www.inspectahomespain.com
Tel: 965 319 743
Mobile: 627 955 748
UK Tel: 0844 738 068




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