A building not conforming to current standards, what does this mean?

I am currently offering on a property in the Alicante region.

The bank survey includes the following statement:

se advierte que el inmueble tasado no se adecua al planeamiento vigente, dado que no cumple los retranqueos. no obstante, la edificacion se considera consolidada, aunque sin posibilidades de ampliacion o nueva edificacion.

What are the retranqueos? Are those the same as building lines? So this means the building is outside of the building lines? I guess this means that although it is outside the building lines this is okay for now as it is grandfathered, however we can't build something new or extend it.

What does this mean in practice. We're not planning on any major building work, but in the longer-tern we'd like to convert the flat roof to a terrace and add an exterior stairway and ballustrade for that. We'd also like to cover the rear terrace (not visible from street). Would that put is in violation of building codes?

all i know is

if there is any discrepancy in any way run for the hills because a lot of the time it will come and bit you in the butt

 I could not agree more. There are so many other properties out there, it's a so called buyer's market, why take on anything with the slightest hint of a problem? You may think it's your dream home, but the honeymoon will soon end when the problems start.

 Yes it would be a violation of building codes.

It basically means what you think. It is outside ,or does not conform to the current planning guidelines but is legal obviously due to its age, but new building or increase in size will not be possible.

What are the retranqueos? Are those the same as building lines? So this means the building is outside of the building lines? I guess this means that although it is outside the building lines this is okay for now as it is grandfathered, however we can't build something new or extend it.

You have correctly answered your question.  The "retranqueos" are effectively the building lines.  This building appears to be outside of the building lines which generally means that the maximum square meters for the construction have been exceeded.  The building is OK due to the time elapsed since it was built without the townhall doing anything about it, but you will never be able to get a license to expand it or make a new building on that plot.  Converting a flat roof to a terrace by either covering or enclosing it would imply expanding the current square meters built and, therefore, you would be unable to do it legally.

Thanks for all your replies.

I have taken this up with the ajuntamiento and the lady there says much the same as what you said, ie, that the building is okay as is but cannot be extended, but she also says that if I apply for permission to add a terrace on the part of the roof that is within the retranqueos, I would probably get that approved, but I can't touch the part of the roof outside the retranqueos. I asked her what would be to stop me building the stairway on the "legal" side of the house and then stepping over that invisble line and using the other half of the roof as a terrace also,. She shrugged and said, that's the law.

Interesting.