10-year new-build guarantee (not!)

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01 May 2009 00:00 by lizh Star rating in Estepona/London. 161 posts Send private message

When we bought our newly built and signed-off (licence of first occupation) house in 2006 we were told all new house have a building guarantee. The developer would do snagging within a couple of months (ha ha) and then you could rely on the guarantee.

After three years of fruitlessly pursuing the developer  (toilets not fitted properly, staircase not attached to wall properly) I asked about the new-build guarantee/insurance. I have now been told that it came into force only for properties whose initial licence to build was granted AFTER 2000.

Our developer got a first licence to build in l997 but didn't start building until 2003. So we are not eligible!?

Can this be true? Sorry, Maria, advice please.


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01 May 2009 10:54 by morerosado Star rating in Guardamar del Segura.... 6927 posts Send private message

morerosado´s avatar

Hi Lizh

I've been Googling for info till Maria answers.

READ IN HERE  scroll down to 'responsibilities: The building act LOE of 5th November 1999 (Ley de Ordenación de la Edificacion), considers all parties involved in the construction of the building to carry some responsibility..................etc .....etc....'

READ IN HERE TOO Building and Construction Warranty Spain

When you buy a newly built property in Spain, you have certain consumer rights to building and construction guarantees, similar to the NHBC Buildmark warranty in the UK. These rights come from protection laws (Responsibility for construction faults: Article 1.591 of the Civil Code and statute 38/1.999 of November 5.) that apply when buying newly built property from a developer.

This message was last edited by morerosado on 5/1/2009.


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01 May 2009 15:52 by lizh Star rating in Estepona/London. 161 posts Send private message

Thank you. Good links. I'll asK prperty insight guy if he knows how you find out who is the insurance company.


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21 May 2009 11:42 by jturner Star rating. 40 posts Send private message

jturner´s avatar

Regarding legal tip on Maria’s blog.



10 year guarantee




It is my opinion that a majority of promoters and constructors do not include the Optional Coverage.


Due to the high costs involved for them to insure the shoddy building practices and quality of the finishes, and also the use of sub standard materials.


The obligation falls on the promoter and constructor to remedy the defects if they have not included these additional options in the 10 year guarantee.


Our community had been handed over in a mess with every defect listed in the optional coverage manifesting itself after the first major rain storm.


Our promoter did not include the optional coverage for the construction. It is excluded specifically in the 10 year guarantee.


The burofax was duly sent within the first year by the administrator and the promoter replied that the defects would be repaired within 15 days.


The promoter never resolved any of the defects and did not respond to further meetings with the board of the community.


Although at every meeting with the board it was promised that all the defects would be repaired. The meetings ceased after December 2007.


The new board has had further meetings this year the result is the same promises made and no construction defects repaired.


This problem evolved before the credit crunch and “Fall of the brick.”


The promoter is still viable and is building other projects.


Our community has agreed at the recent AGM to take the promoter to court. The cost of the architects independent report, lawyers and court costs are going to cost the community 20-25000.00€ and because of the delays in the court system it may take up to 2 to 3 years to get judgment on the admitted defects on the burofax list.


The community has also proceeded through the courts with embargos on the empty properties still owned by the promoter for unpaid community fees 65000€ and increasing. Another burden for the community fee and budget.


The question I have for readers is it possible to embargo any remaining properties owned by the promoter on other projects to protect our position if the promoter declares bankruptcy or protection from bankruptcy before the court case is resolved.


That is to say the money from sales of empty properties is necessary to pay for the repairs of the defects which amount to over 250000.00€ to repair.


If the promoter becomes bankrupt the first charge is to the bank to whom the promoter still owes the mortgage.


  • Community insurance does not cover building defects.


  • House insurance does not cover building defects.


  • The 10 year guarantee does not include the defects offered in the optional coverage. They are specifically excluded in the guarantee.


So the only true option for our ‘new’ development is the court. Why? Because the community will have to pay through the community fees as the years go by to repair the defects.


Ultimately whichever way this ends up “we are where we are” and the costs to the community will have to be resolved by every legal measure.


As always there may be other ideas out there or other communities may have succeeded by other solutions. For example some promoters actually may at the time had many projects under construction therefore publicity of court cases do not help with future customers and finance. So they resolve defects to keep the profit rolling in.


But in todays climate the implicit threat is take me to court and you get nothing because of the credit crunch….Blah!….Blah!…..Blah!


It is a myth to imagine solutions to building defects are a simple matter. They are high cost high risk long legal matters which take years to solve.


Are they honourable responsible people? Our promoter dismissed the builder after the project was handed over. Or I should say the construction company dismissed themselves by not doing the snagging and building defects which the promoter would not pay him or his workforce for carrying out the outstanding work.


The construction company no longer exists. The promoter settled with him by giving him empty properties in the residence.


The architect disappeared somewhere over the horizon and the promoter uses a “new” architect on his projects. If you do see him let us know he wears a tall hat and rides a horse.


Why do I mention the constructor and the architect? Well they have to be notarized on the writ. So being responsible people they thought the best option was to hop it before they become involved with the court writs.


Sharp practice and spivs are alive and kicking.


The only sure fact is promoters make promises and inducements that they never honour.

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21 May 2009 20:10 by lizh Star rating in Estepona/London. 161 posts Send private message

You could be living on our development! Exactly the same problems, responses etc etc. There's no shaming these people.

With us a bank has, apparently, taken some of our houses against the developer's mortgage, so we are hoping that the bank will pay the community charge for the houses it now owns. That would help.  Also maybe the bank will be stronger re chasing the developer re defects.

We are only a small community of 77 houses but with only about 25 owners paying it is hard to run (or impossibly expensive).

Re court cases, we've taken a case out against the developer in the Estepona court only to be told a) it's the slowest court in Spain and b) the developer has changed address to Barcelona so the Estepona writ is useless.

Must say your case sounds very expensive. Is it a very big development? Surveyors and barristers do cash in...

I really wish you luck and good information from other readers. There is a consumer's association I was thinking of contacting. When I find its name i'll put it here.



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22 May 2009 06:26 by mariadecastro Star rating in Algeciras (Cadiz). 9336 posts Send private message

Legal Questions? Speak to Maria Direct

Jturner, I am answering your question below in bold green:

The question I have for readers is it possible to embargo any remaining properties owned by the promoter on other projects to protect our position yes, it is possible. if the promoter declares bankruptcy or protection from bankruptcy before the court case is resolved. If a creditor´s meeting is convoked all the developments of developer will be considered  equally part of the assets of the company.
Need to add that even when  I agree that Court actions are always a burden and a slow story, if it is the only measure available to solve you problem.... you would need to take it. These 10 years guarantee judicial actions are fully effective mainly because they are directed towards all the building agents ( developer, builder, architect....) at once.



This message was last edited by mariadecastro on 22/05/2009.


Maria L. de Castro, JD, MA


Director www.costaluzlawyers.es

El blog de Maria

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22 May 2009 08:54 by lizh Star rating in Estepona/London. 161 posts Send private message

Thank you, that is interesting. Can either of you tell me where I can see an example of the "standard cover" of the 10 year guarantee. I did not know about "standard" and "optional".  


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22 May 2009 10:10 by jturner Star rating. 40 posts Send private message

jturner´s avatar

Thank you both for your replies.

An example of the guarantee has been provided by Maria on her blog Legal tip 88.

A copy of the 10 year guarantee is sometimes provided in the paperwork when you sign for the property. As it is a legal policy provided by the promoter you should be able to obtain this from either contacting your administrator or lawyer to supply you with a copy.

Once you get the copy you will find out the information about the Optional Coverage.

Our community has over 222 properties so obviously the defect costs are higher. The legal charges are the price of going to court against bad promoters. This always has been the obstacle for communities pursuing their rights against them.....and they know it their pockets are deeper than most communities funds so ergo they treat you with contempt.

As I have mentioned the residence does not have the Optional Coverage it is specifically excluded.

The builder and architect cannot be included in the judicial writ for the reasons I have already provided.


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25 May 2009 18:30 by lizh Star rating in Estepona/London. 161 posts Send private message



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