in reply to your questions, you should take into account the following principles:
1.- Building activities in general are subject to planning permission.
2.- The owner of a property is obliged to apply for the corresponding planning permission; failure to do this results in a) the paralization of the building activity and the request for legalisation, which can lead to demolition in some cases, and b) a fine. In some cases, the builders might be liable as well.
3.- The owner of a property, even if he has not carried out the building works done without permission, becomes obliged to legalise the situation. Typical case: A builds and sells to B and then the Town Hall requests B to legalise what A has done.
4.- In general terms, the law provides for a 4 years deadline AFTER THE BUILDING IS FINISHED in order for the competent authorities to take action against illegal building. After that time, and provided that the competent authorities have not taken any steps or notified any requests, the situation created by the illegal build becomes "consolidated". It is worth saying that the owner has got the burden of proof, so that it is for him to make the point that the building was finished more than 4 years ago...
It goes without saying that in the event the building is not finished, the competent authorities can take action.
5.- General rule pointed out under 4) HAS GOT EXCEPTIONS, i.e. building in urban green area is not subject to any deadline; in the countryside there are also protected areas according to Master PLans and regional and national legislation, where there is no deadline either.
In your query it would appear you own a property in an "urbanisation" where there are communal areas - probably the streets and gardens, although this depends on the specific configuration of your area - and individual plots with single owners. Consequently, each owner would be liable for the building activities which take place within his plot; the community as such would not be affected unless the works were done within the communal areas.
As to the issue concerning neighbour's insurances and building guarantees, there is no reason why they should be affected, unless you're the owner of the property, of course.