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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche. www.costaluzlawyers.es

Legal tip 1435. Judges solutions against Banks when illegal properties
11 September 2017 @ 13:17

Another great decision dated April 2017 by Alicante Provincial Appeal Court Section 9 in a case against CAIXABANK regarding solution to urban illegalities.

Law 57/1968 is applied to a case of urban illegality where the buyer had been living in the house for 9 years with no habitation license

The Alicante Provincial Appeal Court decision quotes Supreme Court doctrine which  established that delivery of the house according to provision 1461 y 1462 of the Civil Code includes full habitability conditions in an official way:  in short – habitation licences. (Supreme Court decisions dated September, 12th, 2016; April 22nd, 2015; September, 10th, 2012; November 8th, 2012; February 12th, 2013; March, 9th, 2016).

Nullity of the contract due to urban illegality is extended to the linked mortgage so, in these cases, a full claim of all amount paid, before and after completion, plus corresponding legal interests is possible.

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Final note after some discussion with readers below ;) This is a decision by a provincial Appeal Court but Supreme Court has already passed a good number of  excellent decisions in this same matter

"Los Lances" beach, Tarifa, Cádiz, Costa de la Luz, South western Spain

 



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10 Comments


hosilverlining said:
11 September 2017 @ 13:57

Great news, thanks María.


ads said:
11 September 2017 @ 14:01

Does this mean that owners who have purchased property (without habitation licence in place) but have not been living in it full time (holiday home) will be exempted from this SC ruling, Maria?

Also what applies for those living in their property full time (without habitation licence) beyond 9 years?


mariadecastro said:
11 September 2017 @ 14:34

Dear Ads:

It applies to 1st and 2nd residential homes.

If the owner lived for more than 9 years, it is still under this same protection.

It is a continuation of the application of Law 57/68 to illegal properties started by the Supreme Court in 2016.


ads said:
11 September 2017 @ 15:13

Thank you Maria.
Just to clarify, will this ruling now act as a financial deterrent to stamp out continuing completions on properties without habitation licences in place, because property owners compromised in this way will now be able to claim against any Bank who allowed a mortgage to be taken out against any property without habitation licence in place at the point of completion?

But, having said that, does this have to go to SC to become legal doctrine across all of Spain, as is this only limited to Alicante (where appeal court judges are applying this ruling) and not other regions in Spain?


Jimbofinn said:
11 September 2017 @ 19:19

Ok, I understand the court ruling, but how does one then obtain the 1st LoH. Is it just a case of turning up at the local Ayuntamiento and asking for it quoting the legal reference?


mariadecastro said:
12 September 2017 @ 10:27

Ads: Yes, your understanding is most correct!Supreme Court has already passed at least 4 Court decissions on the matter so, it is already legal doctrine.

https://blog.costaluzlawyers.es/blog/2016/09/28/spains-supreme-court-applies-law-5768-urban-illegalities/



mariadecastro said:
12 September 2017 @ 10:29

Dear JImbofinn:
Yes, Local Council is obliged to issue certificates on Planning Status of your property
M


ads said:
12 September 2017 @ 11:52

Are there still local authorities ( town halls) issuing "illegal" licences where they are in contravention of regional or Govt stipulations Maria? If so what further checks need to be completed for owners or new purchasers to know that the property is fully legal and compliant with local, regional and Govt criteria?
Is issuance of licences still leaving owners at longer term risk in this way?


mariadecastro said:
12 September 2017 @ 13:18

The fact that Notaries and Registrars need to check on the existence of the corresponding Habitation Licenses before End of Work and transmission deeds is a deterrent. ~

The fact that Law 20/2015 ( new law on off plan business) just protects buyers after Work License is in place also makes developers both respectful and limited by this as:

- Buyers will not contract at that risk
- Banks will not operate as developer´s banks if they do not exist


ads said:
12 September 2017 @ 18:17

Thanks Maria,

I take your point about deterrents BUT….

I presume this new law (Law 20/2015) comes with a caveat Maria that buyers of offplan property should now withhold any payment (deposit) until such time as a developer has secured a valid Building Licence from a town hall’s planning department?
(From 1st Jan 2016, any interim payment will be left unsecured with purchasers financially exposed and at risk of losing their deposit according to the new law). It needs to be stressed that deposits are NOT covered by a bank guarantee or insurance policy prior to attaining a Building Licence under this new legislation.

With regard to Notaries, without mandatory requirement in place, notaries still appear to be turning a blind eye to provision of licence in some regions, allowing purchasers to complete on existing properties without habitation licence in place, in full knowledge that to inhabit such a property would be illegal. Or has this now been outlawed in Spain?

Likewise without mandatory requirement in place, repossessed properties are going unregistered by the Banks, leaving communities exposed to non payment of community fees in the lengthy interim periods prior to resale.

These compromising loopholes without mandatory requirements in place that expose purchasers to the risk of having to take further litigation after the event, also need addressing do they not Maria?

Then there appear to be complexities associated with reform licences with regard to extensions and modifications to a property…. There are so many different probabilities and requirements, depending on WHAT is the size of the land; WHERE is the property located (Valencia, Almería, Alicante, Murcia, Castellón, Granada, Cádiz, Málaga, etc.), with extremely high differences between regions, and even between cities; WHEN extensions were made (4 years before, 10 years, 20 years), and HOW they were built (without building license, with reform license, etc..), that it becomes absolutely essential to seek independent reputable legal advice prior to purchase in Spain.

BUT this should never preclude the requirement to also seek out workable and effective solutions such as mandatory registration, mandatory provision of licence (s) at point of completion, that have the potential to free up the overloaded judiciary and under-resourced courts, should it not?



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