Would you buy a property you cannot insure, reform or rebuild?
It is no secret that buying a property in Spain entails uncertainty. Still it is hard to believe that so many people are buying or have bought a property in good faith, without knowing that they are buying or have bought an illegal house and even more without having any idea of the consequences, such as not being able to insure, reform or in many cases not even being able to rebuild if a house has become uninhabitable due to damage.
The survey of Casa Propia, the community of homeowners and future homeowners, shows that few would buy a property if they knew that it cannot be insured, reformed or rebuild. How is it possible that these properties are bought massively even with the assistance of professionals? This it is not about few properties but hundreds of thousands. Are the buyers naive, have they not been given full information about the legal situation or were they victims of a scam? The victims are in all prices ranges from apartments, small country houses up to million euro villas with professionals to guide them through the purchasing process.
Homeowners in Spain would like to draw your attention to the following;
The Spain of the past is not the Spain of the present. There are laws that are indeed enforced even though there are professionals who would like you to believe that nothing has changed. Sooner or later you will need a permit, one gets control or has a problem with a neighbor who complains to the municipality. We have had to demolish extensions, swimming pools, casitas or even entire houses, and many of us were unpleasantly surprised when we could not obtain a permit for reforming or were not or hardly compensated by the insurance company due to invalid documents! And nine out of ten because we have not been fully informed or even been victim of scam.
It is by no means intended to be negative or as a mood maker. As homeowners based on personal experiences we want to make people aware of the pit falls. Spain is a fantastic country, and enjoying Spain must also really mean enjoy!
How should purchasers know when a property is illegal if nobody tells them?
A property is illegal sooner than people would think. Casa Propia has drawn up a schedule that shows that an extension, pool or casita without regulatory permits, even when prescribed, is sufficient to invalidate a Cédula de Habitabilidad or Licencia de Primera Ocupación, which means that the property is no longer legal by law (so called fuera de ordenación) until the illegal has been legalized or the property returns into the original state.
Anyone who knows the culture of the Spanish real estate market knows that the number of properties in this situation is uncountable, which results in many homeowners who may be in a situation without even knowing it. If a Cédula de Habitabilidad or Licencia de Primera Ocupación will be enforceable (like in Catalonia) for whole Spain with each transaction, there will be millions of families unable to sell their houses, unless they bring their property into a legal state of if professionals involved do not tell about invalid licenses and its consequences, however that seems to be the main problem in cases where purchasers were victim. It is not illogical that the license will eventually be an obligation nationwide with with inevitable consequences, something purchasers should keep in mind.
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The buyers trust is damaged
To avoid problems and wrongdoings, most buyers trust professionals such as the real estate agent and a lawyer, sign at the Notary, take out insurance through an agent and if necessary a mortgage through the bank. Insurers and banks, in theory, do not insure or finance illegal houses, but it happens, which can even lead to a situation in which people do not have guaranteed insurance coverage, cannot rebuild and still remain with a mortgage. Apparently in the chain of professionals, insufficient signs are given about the consequences of transactions, too often resulting in a false sense of security until things go wrong for any reason. And if you think you can hold the professionals involved responsible, then we have bad news. From the moment the purchaser has signed and paid, it is difficult to hold a professional liable, especially when find out years later or one has been assisted by a lawyer.
False sense of security
The government through the adoption of laws such as AFO in Andalusia no longer have to be demolished. Thanks to the hard work of Maura Hillen president of AUAN this was achieved in Andalusia for more than 300.000 illegal properties, however these properties cannot be rebuild in case of major damage, and the law does not eliminate the state of illegality of the properties. In Spain there are millions of houses, with or without prescribed extensions, casitas, pools which suffer from the same consequences. In practice it comes down to fingers crossed that nothing serious happens because the coverage is not guaranteed, of course, in addition to all other limitations for being illegal such as not being allowed to reform a property, high fines, demolition, not being able to have new contract for public electricity or water, etc.
There is also good news; an independent property inspection for buyers and a structural solution for homeowners
Casa Propia has designed an independent property inspection named IGP (Inpección General de Propiedades), where community members check the professionals for ethics and professionalism to guarantee the the highest certainty. Purchasers should have total knowledge of what they are buying, and the full meaning of the legal situation of the house.
For homeowners, Casa Propia are championing a petition for amnesty: “No more emergency measures but legalization”, in order to raise the issue before the central government in Madrid. The aim is to have the government, because of the huge number of people in this situation, will have to accept that this is a serious social problem of national magnitude which must be resolved as soon as possible.
Casa Propia is in connection with victims of all sides, some have lost not only their house but all their savings. Do you have personal experiences please let us know.