Buying a re-sale 20 year old property without Habilitation Licence

Dear Sir/Madam,

I am in the process of buying a property in Mijas, Malaga.  I have been informed by my solicitor that there is no LFO on the original building as the builder only had permission to build detached houses in the urbanisation and not semi-detached like mine..

 However, the current owners had an extension built to the property in 2005 which has got an LFO which I find very strange as the rest of the property has not got one. I have read that it is not a requirement for an older property over 5 years old..From what I understand an older property still need an Habilitation Licence?, Altough I have been told it is basically the same thing. So I am very confused.

My solicitor tells me that there are no files open against this property, and the documents are in the files of the Town Hall.

The property has got all the utilities like electricity and water etc,  Can that potencially be cut off in the future?  My solicitor had not paid the deposit yet until I decide wether to go ahead with the purchase or not! The completion date is set for 20th March-15.  So I am under pressure to make my mind up very soon.  Would be grateful for any advise please.  Thank You!

The seller should provide a licence of 2nd occupation. That is the habitation licence you refer to. Each licence is only valid 5 years but you don't need to renew it until selling. The LFO is for newly built properties although they are, to all intents, the same thing.

If the property is legal and entered into the land registry, the seller should have no problem getting this licence. If they do have a problem then I would question the legality especially as to what is entered at the land registry. 

Many properties around us still have no certificate but are being sold all the time. In our case it is more to do with the inefficient town hall and all the properties sold have utility contracts which are automatically transferred online. Only the new built properties, and hence new contracts, have had to provide the LFO for the utility companies and then only those in the last 3 years or so. AFAIK none of the resales have had to show the subsequent habitation certificate. 

I would query if the lack of habitation licence would place future mortgage provision at risk and also inability in the eyes of the law to gain future rentals on the said property. Is it classed in the eyes of the law as uninhabitable ( even if others have ignored the letter of the law)?

Also is there no requirement for notaries to demand proof of habitation licence on transfer of property?

Our bank definitely wont give a motgage on a property without one in place. That I guess is somewhat reassuring.

However we have visited bank properties that have absolutely no certificates of any type, certainly some banks have no problem with trying to sell you or offer a 100% mortgage on properties like this. Oh I'm sure it can all be sorted and in double quick time. It beggars belief really.

We cash purchased on the Costa Blanca 8 years ago. Used the correct legal bods Spanish Lawyer, Atlas International the Agent. The property in a new apartment block, the Builder charged €1000 cash for the utility meters to be fitted. Some of the purchasers obtained Bank Morgages without any trouble. The local governing council have failed to grant the Habitation Certificate despite years of applying by our 1st & 2nd Community Administrators. Since 2007 many purchasers of property in Spain have Bought & Sold without the HC. Your best bet is to get a guarantee from your Lawyer if they will give you one,  you will then not have the continuing problem after completion.

My advice to all purchasers is don't pay the builder any cash for the utility Meters to be installed. This should be included in the purchase price. 8 years and we still have no personal Utility Meters or the HC. Your Lawyer should sort this out before you pay his bill.

MAKE SURE YOU HAVE YOURS ONE BEFORE YOU COMPLETE AT THE NOTARY.

This message was last edited by Poedoe on 14/03/2015.

The more the authorities are made to clamp down on this malpractice (even if its an administrative failure) the more those left without licences in place will find themselves increasingly compromised, so why take the risk of not ensuring legal licence is correctly in place prior to purchase and prior to placing any deposit on the property ? Best to gain proof in writing from conveyancing lawyer that LEGAL licence is in place?

Only when this starts to impact the resale market place in significant numbers as more become wise to these uncomfortable realities will the authorities HAVE to clean up their act instead of placing owners/purchasers at continuing risk in this way. 

This message was last edited by ads on 14/03/2015.

In my case, the seller had the license of 1st occupation when she moved in - she was the 2nd owner, and has lived there for 10 years. Before selling to me, she should have asked for the license of 2nd occupation, but didn't.  Her agent didn't advise her to do this.

My first solicitor was a clown, who didn't even ask for either 1st or 2nd occupation licenses, and told me everything was legal and ok, so I signed the contract, and paid the deposit (yeah, I know.. slaps forehead).

Seller then agreed (thank god) to get the license of 2nd occupation before notary date, even though it wasn't listed as a necessary document in the contract we signed.. it should have been. Again.. solicitors fault.  It isn't a legal requirement to have them, as others have already said, but it really is best that you get one, and make it a condition in the contract you sign with the seller.

For me, the complication was then that the first owner had done an extension, so my seller then had to get an architects report to prove that the work has been done to all norms, it wasn't a new 'level' etc, then submitted that report to the council with the request for the 2nd occupation license.

The council ok'd it - the extension had to be signed off by the municipal architect at the council who reviewed the seller's architect's report.  Then finally the 2nd occupation license was issued (phew).

It took exactly 3 weeks from the submission of the application to me receiving it.  So my guess is that you won't get it any faster than that / cannot rely on it since yours has an extension too.

The big question is whether you have signed a contract or not ? Is your completion date just a verbal thing, or have you actually signed the contract.  And is the requirement for the 2nd occupation license in that contract ?

If you have signed a contract, and it doesn't stipulate the 2nd occupation license, then I suspect you're on a sticky wicket, since you have (by signing) agreed to pay the deposit.  And if you are now trying to withhold the deposit, and basically break the contract, then expect legal complications and expect them to come after you for the deposit.  I was told the deposit must be paid within 48 hours of signing the contract.

If you haven't signed anything, then you're (unlike I was) in a good position.. just say that nothing will be signed and deposit won't be paid until you get the 2nd occupation license. 

Or to be more flexible, you don't have to insist on the 2nd occupation license up front, but make it a condition of the contract you sign, saying it has to be there before notary.  And set latest completion date to be many weeks into the future to give the seller time to get the 2nd occupation license.

Disclosure: I'm not a legal eagle, this is just based on my recent experience / hope it's useful.  Your solicitor really should be advising you on this stuff.. what you can and can't do, based on what you have or haven't signed.

I got very lucky in spite of me being an idiot in signing and handing over the deposit without checking the lawyers work. I now have all the docs.. hope it works out for you.

Maytone:

As the reason for lack of FOL is that the property was not built according to the project that was approved, situation is difficult. Legalisation may never be possible.

What is your lawyer saying to you now?

Doesn't any construction automatically become legal after something like 5 years?

My property does not conform to what the catastro says (house is wrong shape and in wrong place). We haven't been able to ascertain the building's age but on a photo we unerathed from the 1960s it was (on the outside) pretty much identical to what it still looks like today. As we haven't added but just renovated our lawyer says all that is legal.

We've had the propoerty for almost 2 years now and have set up contracts with the water and electricity companies and a license and inspection of the gas equipment from Repsol and none of these companies asked to see a habitation license.

Not in the Valencia region assuming you are in Campello, last year they changed the laws under LOTUP ruling that means buildings now have to be 15 years or older before they qualify for immunity from being fined. It was never a case of they become automatically legal but they become tolerable and you will be able to register them without fear of fines or demolision. You still need to make sure your house conforms with the catastro though and will need to fix that as you wont be paying the right amount of tax, possibly. To do this you would probably need an architect to declare the house of being over 15 years old etc...And if you want to sell you will still need to probably have a license of 2nd occupation.

All of this needs to be fixed.

Thanks for your comments.

I don't think I will be selling in the next 20 years or so, so won't be worrying about that.

The size of the house according to the catastro is actually slightly larger (by about 15m2) than the house is in reality, so I don't think we're on the wrong side of the taxman.

When we bought we actually negotiated with three different banks (Santander, Sabadell and BBVA) and although they all asked us to produce no end of paperwork, they never specifically asked for a habitation license. So it's all a bit strange.