“Obra Nueva” (End of Building work document)

I completed on my property about 9 months ago but I have just been told by the Land Registry that they are unable to register the property in my name as the developer has not paid the taxes relating to “Obra Nueva” (End of Building work document).  The developer has told my solicitor that he is in financial difficulties and cannot or will not pay this tax.  I have been told that my only option is to pay the tax myself otherwise the property will never be registered in my name.

Does anyone know how this tax is calculated and whether it is based on the value of the property or on some other basis.  My solicitor has said that the interest is growing on the unpaid amount.  Can someone help clarify things for me please.

Grover
 

Dear Grover

In theory, you should not have been able to complete (as you say in your email) the purchase without having the declaration of new construction (obra nueva) properly issued, signed and registered by the developer. The completion of the purchase should have taken place in front of a Notary Public and he/she should have revised that all obligations have been complied with.

This document is important not only because of the taxes and costs that it involves, but also to have the property properly registered and, even further, because all guarantees of the construction start only after this document has been issued, together with the decennial insurance and the certificate from the Architect to say the construction is completed according to the project and 100% legal.

Feel free to send us your queries for any further advice.

kind regards

Martin

Martin

Thank you for replying.  Was the notary negligient as he should have spotted this?  Is there any value in asking him to intervene to sort this out given his responsibility when the deeds were signed?

Is this an illegal act on the part of the developer?  Many others on the urbanisation have been put in the same position.

The deeds signed at the notary state the following:-

Asimismo seran de cuenta y cargo exclusivo de la sociedad vendedora los gastos de luz y agua correspondientes a la finca objeto de la presente, hasta que le sea concedida la Licencia de Primera Ocupacion.

The developer decided in Nov 2008 to form a community without involving any of the residents and then levied a monthly charge of 200 euros for spurious services.  Anyone who did not pay the 200 euros has had their water and electricity cut off.  I am in this position.

This is an extract from an email from my solicitor about the Land Register unpaid tax.

We have received a call from the Land Registry Office to say that they are unable to register your property in your name as the builder (xxxxxxx) has not yet paid the taxes on the “Obra Nueva” (End of Building work document). Without this tax having been paid the title deed cannot be changed into your name, so we have spoken to xxxxxxx to enquire as to why this has not yet been paid and have been told that they are in financial difficulty and cannot pay these taxes and probably never will! The only solution you have therefore is to have the “Obra Nueva” document collected from xxxxxxxxxxx and pay the taxes on this document yourselves, so that your title deed can then be registered and the property will then be legally in your name. I am not too sure as to how much the tax will be, but if you agree to pay it in order to register your property in your name then we will find out exactly how much you are required to send to do this. I very much doubt that you will have to send more than another 1.000 € for this, but then at least the property will be legally in your name and you shouldn’t have any further problems to this effect.

 If you decide not to pay the extra to cover the tax that has not been paid on this document then your property will not be in your name and therefore you would not be able to sell it and should anything happen to either of you then your inheritance could not be settled as the property would not be in your name. The longer you leave the registering of the title deed there will be interest added to the amount owed and this will continue to increase with time.

 Please let me know if you wish to proceed with paying this tax and if you would like us to collect the paperwork from the builder to be able to arrange this for you and I will send you the exact figures.

I would advise you to enquire about the First Occupation License. That is essential to have. ASk in the planing department coresponding to the development´s location about the status of it. Bring a copy of your deed and private purchase contract.

Once you know about this, there are different legal actions to be taken against the developer. But is important to know on this first.