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Building your own House in Spain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LAND STATUTE UPON PLANNING LEGISLATION

The right to private property in the field of urban planning is a statutory right. Its content derives from the law, in accordance with the social function of land ownership,  and from urban planning.

Both the State, the Regions and the municipalities have different competences and levels of intervention. The State is competent to establish the basic conditions of land ownership that ensure the equal exercise of rights and the fulfilment of duties in relation to the urban property of land. The Regions exercise jurisdiction over urban planning, although this competence must necessarily be developed in compliance with the laws that the State can approve in the exercise of its powers on matters that produce an impact on the field of planning, although not strictly of urban planning. Finally, the municipalities have the abstract competence  of intervening in all matters that affect them through the approval of local plans and ordinances, such as  planning,   management, implementation and planning  discipline, respecting the legislation of the State and the Regions.

The diversity of State and Region titles in urban and land planning matters makes it necessary to distinguish between Region and State legislation, which in turn may be of a full, basic, or supplementary nature.

 

State regulation.- The state regulations are set out in the updated Land Law – Soil Act 2015-, which constitutes basic legislation and is mandatory in all autonomous communities. This is not a town planning law, but a law relating to the land regime and equality in the exercise of the constitutional rights associated with it with regard to the interests whose management is constitutionally entrusted to the State. It must be applied with due respect for the exclusive powers conferred on the Regions regarding town and country planning and housing and, in particular, public land holdings.

 

Regional regulation.- The Regions have assumed, through their Statutes of Autonomy, the competence in urban, land planning and housing matters, as the State Law has no competence in this area. Some of the most significant Regional regulations in this area are:

Andalusia  Law Andalusia 7/2002, on urban planning, Andalusia Law 13/2005, on measures for protected housing and land; – Law Andalusia 2/1989, on protected natural areas

 

Balearic Islands  Balearic Islands Law 14/2000, on territorial planning; Balearic Islands Law 12/2017, on town planning;  Balearic Islands Law 6/1999, on territorial planning guidelines;  Balearic Islands Law 7/2012, on urgent measures for sustainable urban development

 

Canary Islands    Canary Islands Law 4/2017, on land and protected natural areas; Law 6/2001 of the Canary Islands on urgent measures in the field of territorial planning and tourism; Canary Islands Law 19/2003, on general planning and tourism guidelines; Canary Islands Law 2/2003, on housing; Decree Canary Islands 183/2018, Planning management and implementation regulation

 

Murcia    Murcia Law 13/2015, on territorial and urban planning of the Region of Murcia

 

Valencian Region    Law Valencian Region 5/2014, on land use planning, town planning and landscape; Law Valencian Region 11/1994, on protected natural areas

 

 

  1. URBAN PLANNING

Planning is the fundamental basis of all urban planning, since it prefigures what in time will be the space considered by it. Since it is impossible for the law to determine the content of the property right for each specific portion of the territory on a case by case basis, a two phase technique is used, so that the laws establish the main lines of the system and refer to planning as its concretion in space.

By means of urban planning, an initial suitability for the construction of a plot of land is attributed, but this right is only consolidated through the fulfilment of a series of obligations and burdens that are imposed on the owner and that must be fulfilled within the time limits established in the planning itself.

The plans have the character of authentic legal norms of regulatory rank, insofar as they are subordinate to the law from which they originate.

 

General Urban Development Plans.- The general plans of urban planning, also called municipal plans or simply general plans, are the decisive piece of the Planning System and are characterized by being an instrument of integral planning of the territory. In a territorial sense, because they must cover at least a complete municipal area, insofar as they must regulate all aspects of urban planning in their territory, so that their object is neither the urban development of a part of it as may be a partial plan,  nor the solution to a specific problem of the municipality  as may be a special plan for a historical-artistic complex, for example,  but rather the planning of the territory as a whole, although with the corresponding nuances depending on the type of land. In a material sense, because the general plan must regulate all aspects of urban planning in its territorial area, based primarily on the classification of all its land.

As for its content, it corresponds to the general plan to classify the soil for the application of the corresponding legal regime, to define the fundamental elements of the general structure adopted for urban planning of the territory, to establish the programme for its development and implementation, and to indicate the time limit to which all of its provisions must be understood to refer, and according to the degree of compliance with these provisions, as of which must be revised.

The concreteness of the general plans varies according to the type of soil. In the case of urban land, its regulation is detailed, so that it behaves like a detailed plan; In the land for development, they are limited to defining the fundamental elements of the general structure of urban planning, establishing a generic regulation of the different global uses and levels of intensity and setting the development programs in the short and medium term; finally, on undeveloped land, it establishes the appropriate measures and conditions for the conservation of its natural elements.

 

Complementary and Subsidiary Planning Standards.- The subsidiary rules have an essentially supplementary purpose with respect to the general plan. They define the detailed planning of the municipalities without such planning.  Its function is to complete, when they exist, the determinations of the general plans or to replace their absence, providing a minimum rules  of  classification and use of the land, urbanization and building. In general, they are   provisional, although their duration is indefinite, so their rules is comparable to that of the general plan.

 

Urban Land Delimitation Projects.- The project of delimitation of urban land is not integrated within the urban planning in a strict sense. It is not a plan, but the documentary expression of the result of applying the legal classification criteria to a specific physical reality.  Its sole purpose is to delimit the land that has become urban by fulfilling the legal requirements. it does try to regulate what, because the legally established conditions are met, is urban land, verifying a mere formal demarcation of that land.

 

Urban Development Action Programmes & Sectorisation Plans.- The general plans sometimes leave unregulated part of the land for development, deferring to a later moment its specific planning to adapt it to new needs.

This function is carried out by the Urban Development Action Programmes and, where appropriate, by the Sectorisation Plans, which develop the systems of the general management structure, indicate uses and levels of intensity with expression of the type of use, map out the fundamental networks of the various services, and divide the territory into sectors for the development of the programme in successive stages.

 

Partial Plans.- Its function is to regulate in a detailed way the use and exploitation of the land for development. In the land classified as scheduled for development, their purpose is to develop the general plan through the detailed and complete planning of a part of its territorial area. In nonprogrammed land for development, their purpose is the development of urban action programs. It may also,   where appropriate, order the development of complementary and subsidiary planning standards.

When developing the general plan, partial plans are to be drawn up for the management of entire Sectors of Land defined in the general plan, so that each partial plan targets a sector defined by the general plan.

The partial plans that develop the purposes of the programs of urban development action must include the complete territory affected to each stage of execution of this program, or the totality of the land included in the program, if only one stage has been foreseen.

 

Special Plans.- Its purpose is not the integral management of a certain spatial area in all its aspects, but rather that of only one of these, whether it be the management of enclosures and artistic ensembles, or an operation of internal reform, or the protection of the landscape and roads, or the conservation of the rural environment in certain places.

 

 Detailed Studies.- It is an instrument of urban planning that aims, if necessary, to complete or adapt the determinations of the general planning or of the special plans to establish or adapt alignments and flush, to rearrange the volumes, and to complete, if necessary, the communications network.

 

 

  1. SOIL TYPES

The Soil Act 2015 merely distinguishes two basic situations in which all land can be found, depending on whether or not it has been transformed, Rural Land or  Urbanized Land. The inclusion of a soil in one of these two situations depends exclusively on its actual state at any given time, either in the rural environment or in the urban environment, with all the soil necessarily being in one of them.

Notwithstanding the above, the classification of the land continues to be applicable in accordance with the provisions of the regional laws that define the classes of urban, developable and undevelopable land, assuming the vast majority of the criteria maintained by the repealed Soil Act 1998.

 

Urbanized Land Situation.- The land integrated in an urban network made up of a network of roads, facilities and plots of land belonging to the town or settlement of which it is part is in a situation of urbanized land, provided that it meets one of the following conditions:

  1. To have been urbanized in execution of the corresponding management instrument.
  2. To have installed and operated the necessary infrastructure and services, through their connection to the network, to meet the demand for existing uses and buildings or planned by the urban planning, or be able to have that infrastructure and services without other works that the connection with the existing facilities. The fact that the land is adjacent to ring roads or intercity communication routes does not in itself mean that it is developed land.
  3. To be occupied by the building, in a certain percentage of the spaces suitable for it, according to the arrangement proposed by the corresponding planning instrument.

Also included in the situation of urbanized land is the traditional rural settlement legally established, provided that the legislation on land use and urban planning gives them the status of urban land or assimilated and when, in accordance with it, have the equipment, infrastructure and services required for this purpose.

 

Rural Land Situation.- The land preserved by the territorial and urban planning of its transformation through urbanization is in a rural land situation. It must include at least the land excluded from such transformation by the legislation of protection, public domain, naturel or cultural heritage. Land for which the instruments of territorial and urban planning foresee or allow its change to the situation of urbanized land is also in a situation of rural land, until the corresponding urbanization action is completed.

 

 Urban soil.- Land with the basic urban services (wheeled access, water supply, drainage of water and power supply), is urban land.

The same applies to land that is included in areas consolidated by the building in the form and with the characteristics established by planning legislation.

In turn, within urban land, two different categories are distinguished, depending on whether there is a consolidated development: Land consolidated by the urbanization, and Urban land not consolidated by the urbanization. In the first one, the owners have the duty to complete at their own expense the necessary urbanization so that their land reaches, if they do not already have it, the condition of a building plot, although they are not obliged to make any cession.

 

 Undeveloped land.- The condition of undeveloped land, or rustic land, is the land where any of the following circumstances occur:

  1. Be considered necessary to preserve, or subject to some special protection rule incompatible with its transformation, because of its landscape, historical, archaeological, scientific, environmental or cultural values, natural risks accredited in the sectoral planning, or subject to limitations or easements for the protection of public domain.
  2. Those others that are considered unsuitable for urban development, either because of the imperative of the principle of rational use of natural resources, or in accordance with objective criteria established by urban planning regulations.

In turn, within the undeveloped land, two different categories are distinguished: Specially Protected Land, which is subject to special protection by the general plan, and  Common Undeveloped Lan, which does not deserve special protection, although it is preserved  from the process of urban development.

 

Land for development.- All land that does not have the condition of urban or undeveloped land is considered to be developable land.  According to the repealed Soil Act 1998 the land for development was therefore residual, so that all the land in the municipality that had not been expressly classified as urban land or not for development would automatically be defined as land for development.

In turn, within the land for development, there are two different categories: the  Delimited Or Sectored Land For Development, likely to be immediately or soon to be transformed; and the Undelimited or Unsectorized Land For Development, without the conditions established by the general planning for its development, but with the delimitation of a sector and the approval of the corresponding sectorization plan.

The transition from rural to urban land should be possible only for the land required  to meet the real needs, in order to prevent speculation and to preserve the rest of the rural land from urbanisation .

 

III.  RIGHTS AND DUTIES OF THE OWNERS

The urban planning scheme of land ownership is statutory and results from its link to specific destinations in the terms provided by the legislation on land and urban planning. The Soil Act 2015 explains the powers and duties of the owner of the land without prejudice to the complements of the regional planning laws.

 

Powers and Rights.- Generically, the soil domain comprises two species of privileges:

  1. Rights of use, enjoyment, and exploitation according to the state, classification, objective characteristics, and destination that it the soil has at each moment, due to the characteristics and situation of the property.
  2. Rights of disposition, provided that their exercise does not infringe the regime of formation of estates and plots and of the relationship between them.

The above powers include to carry out installations, constructions and, where appropriate, buildings, when and how the legislation of territorial and urban planning allows it; and to build   and to carry out the necessary actions to maintain the building in a good state of conservation.

The Soil Act 2015 excluded from the content of the land ownership the right  to develop. Therefore, the landowner do not have a right to develop.

The owner of rural land has the following powers:

  1. Those of using, enjoying, and disposing of the land, destined to agricultural, livestock, forestry, hunting or any other use linked to the rational use of natural resources.
  2. It may be exceptionally legitimised specific acts and uses which are in the public or social interest, which contribute to rural planning and development.

The owner of developed land has the following powers:

  1. To complete the urbanization of the land so that it meets the requirements and conditions established for its construction.
  2. To build within the deadlines and to carry out the necessary actions to maintain the building in a good state of conservation at all times.
  3. To participate in the execution of reform or renovation actions of the urbanization, or of endowment in a regime of fair distribution of benefits and burdens, when appropriate, or of distribution, among all those affected, of the costs derived from the execution and of the benefits attributable to it.
  4. Obtain, where appropriate, the corresponding administrative approval or authorization to carry out any of the actions on the urban environment.

 

Duties and burdens.- As a rule, the right of ownership of land, whatever its situation, includes the following duties:

  1. Duty to devote the land to uses that are compatible with land and urban planning.
  2. Duty to preserve the soil in the legal conditions to support such use and, in any case, in the legally required safety, health, universal accessibility and ornamentation.
  3. Duty to carry out additional works for tourist or cultural reasons, or for the improvement of the quality and sustainability of the urban environment, to the extent of the legal duty of conservation.
  4. Duty to carry out improvement and rehabilitation work to the extent of the legal duty of conservation.

On rural land or vacant building land, the duty to preserve it entails paying for and carrying out the works necessary to keep the land in a condition to avoid risks of erosion, fire, flooding, damage or harm to third parties or the general interest.

Specific duties are established for both rural and urban landowners:

  1. In rural land, the owner has the duty to satisfy the patrimonial benefits established, where appropriate, by the legislation on territorial and urban planning, to legitimize the private uses of the land not linked to its primary exploitation, as well as to pay for the infrastructure connecting the facilities and constructions that are authorized with the general service networks.
  2. In rural land included in the scope of an action of urban transformation, the exercise of the right to participate in the implementation of the action of urban transformation involves assuming as a real burden the participation in the duties of the promotion in a regime of equitable distribution of benefits and burdens.
  3. In urbanized land, the duty of use means completing the development of the land with the requirements and conditions established for its construction.

 

  1. ACTIONS OF URBAN TRANSFORMATION

There are two types of urban transformation actions:

  1. Urbanization actions, which in turn, can be of two types: new development actions, which involve the changeover from rural to urban land, and  urban renewal actions.
  2. Facilities Actions, which involve increasing public equipment’s of a developed land area due to greater buildability, density or new uses assigned by the development.

 

Duties of promoting urban transformation.- These duties are:

  1. Hand over to the competent Administration the land reserved for roads, open spaces, green areas, and other public facilities included or assigned to the action.
  2. To deliver to the Administration the land free of charges corresponding to the percentage of the weighted average buildability of the development action. The percentage, with exceptions, cannot be less than 5% or more than 15%.
  3. Costing and, if necessary, executing all the urbanization works, as well as the connection, expansion and reinforcement infrastructures.
  4. To deliver to the Administration the works and infrastructures that should be part of the public domain.

 

 

  1. EQUIDISTRIBUTION AND LAND REASSIGNMENT

General planning, by assigning each surface a certain urban condition -residential use, industrial use, green area, etc.-, establishes differences between lands that previously had the same condition. To correct this inequality of treatment, certain legal mechanisms, named  mechanisms of equidistribution, serve  for benefits and burdens to be shared proportionally among all owners who, in the end, will be placed on an equal footing.

 

Equidistribution techniques.- The instruments of equidistribution used by the urban legislation are the technique of Average Use and the technique of Standard Use. The regional planning regulations have maintained the validity of the techniques of the area of distribution and of the standard use, despite the varied names they have received and the differences in nuances that are detected in various regional regulations, except in the area of consolidated urban land.

The main differences between both techniques of equidistribution are the following:

  1. While the average use is not applicable to urban land, the Standard Use is applicable to this type of land.
  2. The average use is expressed in abstract units of use, weighted by area and sector coefficients. The Standard Use is expressed in the characteristic use and typology resulting from the urban planning -buildable square meters, using weighting coefficients of each use and typology for the purpose of equidistribution.

 

Type of use.- The Standard Use of the Distribution Area is obtained by dividing the total profitable use, expressed in square meters of buildable area of use and characteristic building typology, by the total surface of the Distribution Area, excluding the land affected by already existing Public Equipments, always in relation to the use defined as characteristic, that is, with the predominant use in the area according to the corresponding arrangement.

The area of distribution is the physical area formed by those lands subject to the planning of the same type of use, so that the fewer areas of distribution a general planning instrument provides, the greater the equidistribution will be.

The materialization of this previously equalized content is carried out by an operation   of Land Redistribution, done by placing on the land the use that corresponds to each owner.

Currently, the legislative landscape in the Regions is as follows:

  1. In some communities, the techniques of type and area use are integrated, maintaining their original denomination. This is the case in Castilla La Mancha, Galicia, Navarra and Comunidad Valenciana.
  2. In others, the term “average utilization“ is used to cover precisely the technique of standard utilization in its entirety. This occurs in Andalusia, Asturias, Canary Islands, Cantabria, Castilla y León, Extremadura and La Rioja. In all these cases, the average use is applicable to urban land and is defined in reference to the characteristic use, so that, in essence, can be identified with the technique of use type regulated in state regulations.
  3. In the Balearic Islands no rules are established to determine the buildability or use. the concept of weighted average buildability and urban use of the sector is used.
  4. In Catalonia, and similarly in Region of Murcia, the denominations of type or medium use are not used, but similar effects are achieved by establishing that the weighting of the urban development use in a field of urban planning action or urban development, whether they are sectors of urban planning or urban action parks, must comply with the following rules: Firstly, If the scope of action includes several zones, the homogenised relative value of each zone must be established; secondly, the homogenized values must express the intensity of the uses, the rigidity to the demand of each one of the uses, its location and the admissible repercussion of the value of the urbanization or, in its case, reurbanization.
  5. The Region of Madrid uses the denomination of unitary use of distribution, which is the reference for the equidistribution of all the execution actions included in that area and whose value is the quotient of dividing the sum of the total urban development uses of all the sectors by the total surface of the Distribution Area.
  6. In the Basque Country, the references in previous legislation to the type and environment have been equated to the average urban development buildability.

 

 The Equidistribution Project.- The equal distribution of benefits and burdens is materialized through the land redistribution, which is technically defined as the grouping of all the properties included in a polygon or unit of intervention for its new division adjusted to the plan, with the allocation  of the resulting plots to the owners of the primitive plots, in proportion to their respective rights,  and to the Local Administration, in the part that corresponds to it upon the Law and Plan.

The material operation of land redistribution is documented through the corresponding equidistribution project that usually takes the name of Compensation Project, when acting through the compensation system, or Land Redistribution Project, when implemented within the scope of the cooperation system.

The techniques of Type and Area of Distribution serve to carry out the equidistribution of benefits and burdens, but it is the equidistribution project that concretes and details it.

The Regions have maintained the general lines of regulation of the projects of equidistribution foreseen in the state regulations.

 

Competence for drafting the projects of equidistribution.- The initiative to drafting the projects of equidistribution falls  to the public administration as well as to individuals. Its initial and final approval is the responsibility of the municipality, after the corresponding public information, regardless of who prepared it.

 

Phases of the project of equidistribution.- These equidistribution projects definef two phases. One prior to the planning execution itself, in which what is relevant is the distribution of existing property or property contributed to the equidistribution. A second phase in which the Standard Use is attributed to each of the original properties and the final location of the resulting plot or the economic equivalent that replaces it is specified, if it is finally impossible to locate urban uses on land.

 

Content of the project of equidistribution.- The content of the equidistribution project comprises the following documents:

  1. list of owners and interested parties, with an expression of the nature and amount of their right.
  2. proposal for the award of the resulting properties, with an expression of the urban development that corresponds to each one and the nominal designation of the awarded ones.
  3. assessment of the rights, buildings or constructions to be extinguished or destroyed for the execution of the plan.
  4. interim settlement account. and
  5. plans, including the overlapping of the information and awarding ones.

 

 Effects of the project of equidistribution.- The legal effects of equidistribution projects are:

  1. The subrogation, with full real effectiveness, of the old ones for the new plots, provided that the correspondence between them is clearly established.
  2. The transfer of rights to the municipality in which it operates, in full ownership and free of charges, of all land that is compulsory to transfer.
  3. The Equipment of the resulting properties, on a real basis, to the payment of the balance of the approved project settlement account assigned to each one.

 

 

  1. RIGHT TO BUILD

Building is the final goal of the urban development process, configured not only as a right of the owners, but also as a duty, to the point that the acquisition of the capital gains generated by the development process is made dependent on its fulfilment. The Soil Act 2015 lists among the duties of the owners of the developed land to build within the time limits established in the applicable regulations.

The building activity is subject to a prior control by the Administration, which must check that it complies with the applicable standards. This control is based on the imposition of the duty to apply for the corresponding licence. The administration does not have discretionary power to grant it, since it cannot grant the building permit if the project does not comply with the Law, the plan or the regulations, nor can it refuse it if it does comply.

All acts of building and land use, such as earthworks, new construction, modification of the structure or external appearance of existing buildings, first use of buildings and modification of their use, demolition, etc., require a prior municipal licence.

The competence to grant licenses corresponds to the Town Hall, although the urban legislation foresees that in special cases the competence is attributed to a supramunicipal authority, as is the case with construction on undeveloped or developable land that lacks development planning.

 

Community of Property.- Community of Property is given when the same good belongs simultaneously to several persons, that is, when all of them are  coowners of the property right over it. Community of Property is also called condominium or coownership. The community can fall under any type of rights. Traditionally, two main forms of community have been distinguished:

  1. The socalled Germanic or common hand, in which the assets are considered to belong collectively to all the communal members, without quotas being attributed to each of them, so that it is not possible, in principle, to ask for division.
  2. The Roman community or by quotas, in which each member has the right to a part, not a specific one, which allows each one to alienate his part or to request the division of the common good.

The Spanish Civil Code allows the parties to establish the regulation of the community, by virtue of the principle of autonomy of will, and provides that, in the absence of such conventional regulation, the rules regulated in the Civil Code Article 392  apply. These rules establish a community regime by quotas.

 

 Use of the common good.- The Civil Code allows the simultaneous, but reciprocally limited, use of the commoners. Each of them can use the common things, according to their destiny, so that they do not harm the interest of the community and does not prevent the rest of the coproprietors from using them according to their rights.

The co-proprietors can establish the rules of use they consider appropriate. In this respect, it is established that for the best enjoyment of the common thing the agreements of the majority are obligatory.

 

Administration of the common good.- The acts of administration tend to the conservation, enjoyment and use of the property. They are subject to the rule of majority of quotas, and the agreements adopted in this way are obligatory. For this purpose, until proven otherwise, all quotas are presumed to be equal.

If a majority is not obtained, or if the agreement is seriously prejudicial to those interested in the common thing, any of the participants can go to court to decide what is appropriate, including by requesting the appointment of an administrator.

Maintenance and conservation work carried out for the common good should be subject to this regime. In the case of works involving an alteration of the common thing, the majority is not sufficient, but the unanimous agreement of the coowners, since none of them may, without the consent of the others, make alterations to the common thing, even though such alterations may be to the advantage for everyone.

The contribution of each member to the charges and expenses generated by the common good must be in proportion to his respective share. In this sense, any of the coproprietors may oblige the others to contribute to the costs of preserving the common thing. This obligation can only be waived by the party renouncing his share in the ownership.

 

Similarly, the share of the profits it generates must also be proportional.

 

Acts of disposition on the common good.- Acts of disposition are those aimed at the alienation of the common good or at constituting rights in rem or encumbrances on it.  While for the adoption of acts of administration the majority agreement of the communal farmers is sufficient, for the implementation of acts of disposition unanimity is required. This can be inferred from the precept that none of the coproprietors may, without the consent of the others, make alterations to the common property.

 

Quota disposition.- As far as the part corresponding to each member is concerned, each one can freely dispose of it, assign it or mortgage it. But…

 

Retraction of community members.- In the event that any of the coproprietors’ shares are sold, the remaining coproprietors have the right of first refusal. When two or more members of the community want to use this right, they can only do so on a pro rata basis of the portion they have in the common thing.

The deadline for the exercise of the right is nine days from the registration of the sale in the Land Registry.

A presumption iuris et de jure of knowledge of the sale by the purchaser is established from the date of registration, so that, in principle, the period is counted from the day following registration. However, if the seller knew of the sale in detail before that date, the period shall be calculated since that knowledge.

 

 Community representation.- The community of property has no legal personality of its own. However, it is understood that any of the participants may appear in court in matters that affect the rights of the community, either to exercise them or to defend them, in which case the sentence handed down in their favour takes advantage of the other community members, without prejudicing the adverse or contrary one. For this legal standing to be recognised, it is essential that the claim made in the name of the plaintiff alone must necessarily benefit the community of which he is a member.

 

Community extinction.- The community becomes extinct because of  extinction of property (for example, destruction of the common good),   because of the gathering of all the dues in one person, and because of the division of the common good.  

 

Division of the common good.- Any member of the community may at any time request the division of the common good, which may be carried out in a manner agreed by all the coowners or by any of them using the Legal Action of Division.

There are two exceptions to this general rule. One, that the indivisibility of the common good has been agreed upon for a fixed period of time, which may be up to 10 years, extendable by a new agreement. The other, that the division of the common property makes it unusable for its intended use, in which case it can only be awarded to one of the coproprietors or sold to a third party.

The division aims at the cessation of the community situation, giving rise to the distribution of the property among the communal owners, attributing to each one the full and separate ownership of a par; to the awarding of the property to one of the communal owners, with compensation to the others; or to the sale of the property and subsequent distribution among the coowners of the price obtained for it.

 

There are three ways of indivisibility: physical indivisibility, uselessness and undesirability. The indivisibility can result from the fact that the thing, in case of division, remains unusable for the use to which it is destined, or because it produces an abnormal unworthiness, or because it causes a considerable expense.

 

The division is governed by the following rules:

  1. The division of the common thing can be done by the interested parties, or by arbitrators or friendly composers appointed at the will of the participants. In the latter case, they must form parties in proportion to the right of each one, avoiding as far as possible any supplements to cash.
  2. If it is a building whose characteristics allow it, at the request of any of the coowners, the division can be carried out through the Equipment of independent flats or premises, with their common elements attached, thus constituting a horizontal property regime.
  3. The division must not prejudice third parties, who retain the rights in rem -for example, mortgage, easements, or obligations -for example, lease that they had on the thing.
  4. The creditors or assignees of the participants may agree to the division of the common property and oppose the division without their agreement, but they may not contest the completed division, except in the event of fraud, or in the event that it has been carried out despite their formal opposition to prevent it, and always with the exception of the rights of the debtor or the assignor to maintain its validity.
  5. The rules concerning the division of the community are applicable to the division of the inheritance.
THE CONSTRUCTION CONTRACT IN SPANISH LAW

The object of the construction contract is the execution of a new building, or an extension, rehabilitation, or modification of a pre-existing building.

 In the construction contracts intervene  the Promoter, owner of the building plot or of the building already constructed (to reform, extend or rehabilitate), who commissions the work, the Constructor who executes the work or construction, and the Architect and Technical Architect, who projects it.

  

TYPES OF BUILDING CONTRACTS

The contractual relations that originate between the various people involved in a construction process link them to each other, directly or indirectly: from the owner of the building plot who commissions a work with the architect, builder, or developer, the relations of these with their suppliers and providers, subcontractors … it is a varied type of contract: purchase, sale, supply, service delivery, and lease of work, which in turn is configured in various ways, adapted to the specific case.

With the exception of some general rules, in these work and service contracts there is almost total freedom in their configuration on the part of the parties involved in the construction, subject to the general limits of any contract and certain provisions regarding liability and guarantees laid down in the Law on Building Regulations (from here on we will call it LOE). There are also certain collateral aspects relating to tax or labour issues of great importance.

       

General contract. – In the general contract, the Promoter entrusts the execution of the work to a single Constructor, the Builder, without prejudice to the fact that some isolated element may be ordered separately. It is the Builder who, either directly or by subcontracting the work, with or without the supply of materials, has the obligation to deliver the finished building, the price being set by one of the traditional formulas of flat-rate price, per unit of measurement or per execution of work by the administration. Its main advantage for the Promoter lies in the existence of a single interlocutor who is responsible for the result against him.

       

Partial contract. – In the partial contract, the construction works and services are awarded by separate items. Unlike the general contract, the Promoter divides the execution of the work into a set of minor building works, which are entrusted to various contractors through different contracts, without prejudice to the fact that one or more of these minor building works or packages may be carried out by the same Constructor. For a good management, it involves appointing a Building Project manager to coordinate the work and interventions of each builder and the execution of the different packages.

For the Promoter, the main advantage lies in the possibility of awarding the works as the Building Technical Projects are carried out, which avoids modifications and the process being in the hands of a single Builder. Due to its complexity and the need for coordination, in small projects the general contract is usually used.

       

Turnkey contract. – Through the turnkey contract, the Promoter commissions a specific work to a Builder, which includes design and construction, until the final commissioning based on parameters, specifications, and precise purposes. In general, it includes the supply of materials, the obtaining of administrative authorizations, testing of installations and equipment, general start-up, maintenance, etc.

The jurisprudence has repeatedly established that whoever hires under this modality, in exchange for the price will obtain the keys of a completely finished and running activity. he only has to open the door and settle in.

This contracting modality is rarely used in buildings intended for residential use but is instead the usual practice for the construction of buildings and facilities in the tertiary sector, such as supermarkets, department stores, industrial warehouses, service and hotel franchises.

The Price under this contractual modality is established in a fixed, invariable way. Based on the principle of the invariability of the price of the contracted work, the Builder must calculate in detail the total cost of the work and evaluate the possible unforeseen events that may occur in the course of the work and that he must assume.

The turnkey contract is a name originated by the Anglo-Saxon practice where it is called turnkey contract, package deal, design and build or single liability and in infrastructure projects it is known as EPC or engineering, purchase, and construction.

 

THE HOUSE AS THE CENTER OF THE BUILDING CONTRACT

  

Legally, a building is understood to be subject to the regulation of the LOE, both public and private works. However, the legal regime is very different, since public works carried out by public administrations, in which the promoter acts, are governed by the provisions of Law 9/2017, except for the constitution of obligatory guarantees and, subsidiarily, by the provisions of the LOE.

The construction contract can relate to both temporary and permanent buildings. The criterion of temporariness of the LOE is subjective, it is about works with a will of permanence and it does not respond to the criterion of temporariness foreseen in the town planning regulations, such as works that can be dismantled or separated from the land. Therefore, there can be provisional works in urban planning terms, as is the case of prefabricated constructions, which are considered buildings for the purposes of the LOE, provided that they meet the requirement of permanence.

 

 Building Works. – The most accepted traditional classification distinguishes between minor and major building works.

 Minor building works: These are characterized by their technical simplicity and lack of construction and economic entity, and consist of small works of simple repair, decoration, ornamentation, or enclosure. This definition distinguishes the minor from major building works.

Municipal ordinances usually require, in order to be classified as minor building works, that the actions do not involve a structural alteration of the building they affect, including the material structure and aesthetics, nor modification of the external appearance or internal distribution.

The consideration of a work as minor has the following effects:

  1. A more flexible system in the granting of the corresponding licenses. They benefit from the positive silence regime, if they do not contravene town and country planning.
  2. There is no need for the Building Technical Project. However, this exemption does not affect the projects required by the rules of the intervening technician.
  3. Its exclusion from the control and guarantee regime of the LOE.

       

Major building works: Major works are those that affect the structure or elements that support a building. These works require a Building Project and are subject to the system of responsibilities of the parties involved, guarantees and other legal provisions. They are:

  1. New building works, except for those that can be considered minor building works because they are of little construction entity and technical simplicity that are developed on a single floor and are not residential or public.
  2. Extension, modification, reform, or rehabilitation works that alter the architectural configuration of the buildings. In other words, those of a total intervention nature, or those of a partial intervention that produce an essential variation in the general exterior composition, volumetry, or the whole of the structural system, or that aim to change the characteristic uses of the building.
  3. That have the character of total intervention in catalogued buildings or that being partial works affect the elements or parts subject to protection.

 

 Protected buildings and areas – Certain buildings and areas are given a special degree of protection and significant limitations are imposed when carrying out work in or around them, whether it be new construction or extension, modification, reform, or rehabilitation. These restrictions tend, in general, to the maintenance or restoration of a series of qualities that are considered worthy of conservation.

Both at state and regional level, there are specific regulations on the protection of cultural assets and protected areas, for those situations of great historical, artistic or landscape value.

The State Law legislation and its matching rules in most of the Spanish Regions impose a special level of protection for immovable property, monuments, gardens, historical ensembles and sites, archaeological zones declared to be of cultural interest, or for the duration of the proceedings initiated to obtain their declaration.

 

 Building requirements. – There are a series of basic technical requirements for the building applicable at all times in the life of the building, from the design phase, during construction, and throughout its useful life, through appropriate maintenance and conservation and in each of the interventions carried out. These are requirements of functionality, safety, and habitability.

Non-compliance with the requirements does not in itself give rise to the liability of the building agents, but it is necessary that a certain type of damage occurs, caused by the failure to comply with certain obligations.

       

 Technical Building Code – The Technical Building Code (TBC, hereinafter referred to as CTE by its Spanish acronym) is the standard that regulates the basic requirements of quality, functionality, safety and habitability that buildings and installations must meet, both in the Building Project phase and in the construction, maintenance and conservation phase.

The CTE applies to new buildings and to the extension, modification, reform or rehabilitation of existing buildings, provided that such work is compatible with the nature of the intervention and, where appropriate, with the degree of protection that the buildings affected may have.

In the case of interventions in existing buildings, compliance is justified in the Building Project or in a report signed by an Architect, together with the application for a licence or administrative authorisation for the work. In the event that the requirement for a licence or prior authorisation is replaced by the requirement for a declaration of liability  or prior notification, it must be explicitly stated that the corresponding Building Project or supporting report is in possession, as appropriate.

If the characteristic use of existing buildings is changed, compliance with the basic requirements must be checked, even if this does not necessarily mean that work has to be carried out.

       

 Functionality requirements. – Functionality requirements and functional aspects of construction elements are not regulated by the CTE, but by its specific regulations. They include:

  1. Possibility of use. The layout and dimensions of the living and sleeping spaces and the equipment of the facilities must facilitate the proper performance of the functions provided for in the building.
  2. The building must be accessible and suitable for the internal circulation of people with reduced mobility and communication.
  3. Access to telecommunication, audio-visual and information services
  4. Access to postal services.

       

 Safety requirements. – Safety requirements include structural safety, safety in use and safety in case of fire.

  1. Structural safety. The objective of this requirement is to ensure that the building has adequate structural performance with respect to the foreseeable actions and influences to which it may be subjected during its construction and intended use. A building fulfils this requirement when no damage occurs to it or to any of its parts that directly compromises the mechanical strength and stability of the building (foundations, supports, beams, slabs, load-bearing walls).
  2. Safety in use. The normal use of the building should not pose an accident risk to people. This requirement is subject to administrative verification by means of the appropriate licences.
  3. Safety in case of fire. The aim of this basic requirement is to reduce to acceptable limits the risk of users of a building suffering damage from a fire of accidental origin. The building must allow the occupants to vacate it safely, the extension of the fire within the building itself must be limited and isolated from the surrounding area, and the action of the extinguishing and rescue teams must be possible.

       

 Habitability requirements. – The habitability requirements apply to all buildings to which the LOE is applicable because they are new constructions, because total intervention works take place or because they affect structural elements or protected elements. Such habitability requirements are:

  1. Hygiene, health and environmental protection The building shall achieve acceptable conditions of health and watertightness in the indoor environment of the building in order to reduce the risk of users, suffering discomfort or disease under normal conditions of use, and to ensure proper management of all kinds of waste.
  2. Noise protection. Its purpose is to ensure that perceived noise does not endanger people’s health and allows them to carry out their activities satisfactorily. Buildings must be designed, constructed, used and maintained in such a way that the structural components of the building have appropriate noise characteristics to reduce the transmission of airborne noise, impact noise and noise and vibration from the building’s own installations.
  3. Energy saving and thermal insulation. Its purpose is to achieve a rational use of the energy necessary for the proper use of the building, reducing to sustainable limits its consumption and also to achieve that a part of this consumption comes from renewable energy sources, as a consequence of the characteristics of its Building Project, construction, use and maintenance.
  4. Functional aspects of the construction elements and installations, which allow a satisfactory use of the building.

        For the rest of the buildings, there is a generic duty of maintenance in conditions of safety, healthiness and public ornamentation.

       

 Obligations of use and conservation. – A generic duty of conservation of the building and respect for the instructions for use is imposed.

With regard to the use of the buildings and installations, the instructions must be respected, refraining from using them in a way that is incompatible with their intended use. Owners and users must inform those responsible for maintenance of any anomaly observed in the normal operation of the building.

As regards the duty to keep buildings in good condition, they must be properly maintained, which includes implementing a maintenance plan for the building, carrying out the relevant inspections, and maintaining documentation of all the interventions in the building book, including those of repair, reform or rehabilitation.

 

THE BUILDING TECHNICAL PROJECT

The Building Technical Project is the fundamental element of every construction process and of the construction contract since it identifies the work to be carried out and, therefore, determines the basic performance of the builder. It is made up of the set of documents that determine and justify the technical requirements of new construction, extension, modification, reform or rehabilitation of a permanent building, except for those constructions of little constructive entity and technical simplicity that do not have, eventually or permanently, a residential or public nature and are developed on a single floor.

       

 Functions of the Building Technical Project

The Building Technical Project has four main functions:

  1. Contractual, by identifying the object of the construction contract.
  2. Building registration, as the description of the new building in the Property Registry is made according to the Building Project.
  3. Technical, as provides the technical justification for the proposed solutions in accordance with the specifications required by the applicable technical regulations. and
  4. Town-planning, as it defines the object of the licenses to be granted.

       

a.- Annex to the Construction Contract.

The Building Technical Project defines precisely the object of the contract and is normally part of the construction contract, as an annex. The work to be carried out must be sufficiently identified and detailed in the Building Project, specifying the documents that are contractual or establishing delivery deadlines for any contractual documentation that is delivered during the work.

In principle, the basic Building Project is sufficient for the individualisation of the contractual object. The lack of an implementation Building Project, although it may have an impact on compliance, does not affect the determination of the objective contractual reality.

The signing of a construction contract in which the object is defined only by a preliminary Building Project or a basic Building Project may subsequently result in the need for unforeseen works, representing an increase, change or addition to the original Building Project, which may invalidate the contractual provisions on the invariability of the contracted price for a given work, or the delivery time.

       

b.- Basis for the application for the granting of a Construction Licence. The licence is granted based on the Building Technical Project presented and with reference to it, as the Administration must know exactly the content and characteristics of the action. In order to achieve this knowledge with due guarantee, it is required that, when the licence refers to works or installations, the application be accompanied by the Building Technical Project, the licence being a blank act whose content is integrated by reference to the Building Project presented with the application.

       

c.-Base for the Declaration of New Building Works. The Building Project has an impact on the declaration on deeds of the new construction, given that the description of the building whose new construction is declared must incorporate certain information contained in the Building Project: number of floors, surface area of occupied plot, total square metres built and, if specified, the number of dwellings, apartments, studios, offices or any other element that can be used independently, such as garages, storerooms, terraces and swimming pools. The certificate issued by the technician and the administrative authorisations must certify that the construction complies, in all of the indicated aspects, with the Building Project that obtained the licence.

       

d.- Guarantee of compliance with the technical quality requirements  The Building Technical Project must provide the technical justification of the proposed solutions in accordance with the specifications required by the applicable technical regulations, for which it must be complete and sufficient to determine the technical requirements of the works, justifying the solutions adopted, and it must be technically and legally viable.

The Building Project describes the building and defines the works in sufficient detail so that they can be assessed and interpreted unequivocally during their execution, including:

  1. the minimum technical characteristics of products, equipment and systems, conditions of supply, quality guarantees and the reception control to be carried out.
  2. the technical characteristics of each work unit, and measures to be adopted to ensure compatibility between the different products, elements and construction systems.
  3. the checks and service tests required to verify the final performance of the building.
  4. the instructions for use and maintenance of the finished building.

       

 Phases of implementation of the Building Technical Project – The CTE treats the Building Project as a single document which, for the purposes of administrative processing, is developed in two stages: basic Building Project phase and execution Building Project phase, although a distinction is made between the sketch, preliminary Building Project, basic Building Project and execution Building Project.

a.- Preliminary study or sketch – It constitutes the preliminary phase of development of a Building Project in which, by means of the elaboration of a report, the ideas that develop the idea are expressed in an elementary and schematic way by means of sketches or drawings. It includes the collection and classification of the precise information, the planning of the technical programme of needs, and an indicative estimate of the economic cost.

        b.- Preliminary Building Project: This is the phase of the work in which the fundamental aspects of the general characteristics of the work are set out, whether they are functional, formal, constructive or economic, in order to provide a preliminary overview and establish a progress of the budget.

The preliminary Building Project consists of a report justifying the general solutions adopted. floor plans, elevations, and sections to scale, without limits. and an advance on the budget, with an overall estimate, by constructed area or another method considered suitable.

        c.- Basic Building Project: Its content is sufficient to request the municipal license or other administrative authorizations, but insufficient to carry out the construction, since it already defines in a precise way the general characteristics of the work, through the adoption and justification of concrete solutions. The basic Building Project includes the following documentation:

  1. A report, which includes a descriptive part of the general characteristics of the work, justifying the specific solutions, and a constructive part, with information on the support of the building and justification of compliance with the CTE in terms of fire safety.
  2. The general plans, at least, plans of situation, location, urbanization, general plants, roofs, and elevations and sections.
  3. The approximate budget, with an overall estimate for each chapter.

       

d.-Execution Building Project: The execution Building Project allows both the application of the corresponding licenses or administrative authorizations and the beginning of the works. In the Building Project of execution, the benefits declared in the basic one cannot be reduced, nor the uses and conditions be altered. It develops the basic Building Project with the complete determination of details and specifications of all the materials, elements, constructive systems, and equipment to carry out the construction. In the execution Building Project, it is required, in addition to the requirements of the basic Building Project

  1. a detailed report, both descriptive and constructive, and justification of compliance with the basic requirements of the CTE.
  2. plans of foundation structure, support structure and horizontal structure.
  3. installation plans.
  4. plans of constructive definition.
  5. graphic memories.
  6. technical specifications, general and specific.
  7. measurement status.
  8. detailed budget, summarized by chapters, with expression of the final execution and contract value – including the budget for quality control – and the budget for the health and safety study.
  9. partial projects or other technical documents that must develop or complete the implementation Building Project.

       

       

 Visa from Architect’ Association – The Building Project must be submitted with the mandatory visa from the Architect’ Association. The documents that it requires are:

  1. Construction Building Project.
  2. Certificate of end of building works.
  3. Execution Building Project and final work certificate which, if applicable, must be provided in the administrative procedures for the legalisation of building works, in accordance with the applicable town planning regulations.
  4. Building Demolition Project.

 

The official visa identifies the author of the Building Project and verifies his legal qualification, i.e. that he is a qualified and registered architect, in legitimate exercise of the profession. and the formal correctness and integrity of the documentation that forms part of the work.

        Content of the Building Technical Project. The Building Technical Project, in order to be endorsed by the professional association, must contain the following documents

  1. Memory. This document should record the compliance with the current building regulations. It must also contain a calculation annex in which compliance with the conditions required of the structure in general and of each of the parts that make it up is justified in order to guarantee safety and good service.
  2. Geotechnical study. The lack of a geotechnical study, when necessary, triggers the liability of the designer. In this sense, case law has established that, even if the inclusion of the geotechnical study is not compulsory, the designer must study the soil to avoid liability.
  3. Plans, of the whole and of the details. The plans must be sufficiently descriptive for the exact execution of the work. They must be indicated in meters and with two decimal places.
  4. Special technical specifications. This is the document that describes the works and regulates their execution and the way in which they must be carried out. The characteristics that the materials and the different work units must have must be stated, as well as the methods of controlling the materials and execution.
  5. Budget. This document establishes the prices per unit of work based on direct costs (labour, materials, personnel costs, fuel and energy and machinery depreciation and maintenance costs) and indirect costs (installation of offices on site, building of warehouses, et seq.)
  6. Plan of work, or program of development of the execution of the works.
  7. Environmental Impact Study.

       

 Study of health and safety at work – It is necessary to incorporate this study in the execution Building Project. It must include the preventive measures appropriate to the risks involved in carrying out the work. This requirement is essential for obtaining the corresponding visa.

       

 Partial projects. – The Building Project can, and sometimes must, be developed or completed by means of partial projects or other technical documents that develop or complete the Building Project in specific technologies or installations of the building, defining in sufficient detail for its execution, its constructive characteristics. Its content must be that necessary for the execution of the works contemplated therein and must have the mandatory college approval.

       

 Modifications to the initial Building Project.- It is common for the initial Building Project to undergo modifications throughout the construction process, in many cases required by the progress of the work. The modifications must be made at the request of the Promoter or with his agreement since they affect contractual aspects such as price or delivery time.

If the modifications significantly alter the Building Project, it may be necessary either to apply for a new building licence or to modify the terms of the licence already granted, since otherwise the work carried out will not comply with the licence granted.

The Building Project manager is responsible for reflecting the appropriate changes in the Building Project before the execution of the modifications. In any case, upon completion of the work, the approved and executed modifications must be incorporated into the Building Project for inclusion in the Building Book.

 

 

  Other necessary documents. – During the construction of the work and at its conclusion, a series of documents must be drawn up and made available, both regarding the monitoring of the work and to the quality control carried out throughout it.

       

 Documentation of the monitoring of the work. – Once the work has been completed, the monitoring documentation must be deposited by the director of the work with the professional association, to ensure its conservation and to issue certificates of its content to those who can prove a legitimate interest.

The building works must have the following monitoring documentation:

  1. The book of orders and assistances.
  2. The health and safety incident book.
  3. The Building Project, its annexes, and modifications
  4. The building licence, the opening of the work centre and, where appropriate, other administrative authorisations.
  5. The final certificate of the work.

       

 The Orders and Assistances Book. – The Building Project manager and the director of the execution of the work have the obligation to write down in the book of orders and assistances the instructions that are proper to their respective functions and obligations, as well as the modifications. It is facilitated and diligence by the professional association that has endorsed the Building Project when the director of the work communicates its beginning. It reflects the relevant actions in the work and its milestones, together with the instructions, modifications, orders or other information addressed to the builder by the Building Project management.

The Orders and Assistances Book must remain on the construction site. The notes and orders that are recorded in the book must be made by the Architect director, Technical Architect or Quantity Surveyor, together with the “insider” of the Builder, technician or person in charge of representing him, if applicable.

Upon completion of the work, it must be presented at the Architect’ Association along with the certification and the final work certificate, without which these documents cannot be endorsed.

       

 Final certificate of work. – In the final certificate of work, the director of the execution of the work certifies to have directed the material execution of the works and controlled quantitatively and qualitatively the construction and the quality of the built thing in accordance with the Building Project, the technical documentation that develops it and the rules of the good construction, the so called Lex Artis.

The final work certificate of the work states:

  1. that the building has been carried out under his direction.
  2. that it has been implemented in accordance with the licensed Building Project and the technical documentation accompanying it. and
  3. that the building is prepared for proper use in accordance with the operating and maintenance instructions.

       

 Book of the building and information to be delivered at the end of the work

The building book is the set of technical, legal, and administrative documents which, once the building has been completed, must be handed over to the end users of the building. It includes the description of the building’s construction characteristics, and the instructions for use and maintenance necessary to allow the preservation of the good condition of the building and its complementary installations, with a maintenance plan for the building and its installations.

The purpose of the building book is to provide the end users with information necessary for the proper maintenance of the building, and which, in case of non-compliance, exempts the agents involved in the building process from liability, and even from the loss of coverage of compulsory insurance.

The book is compulsory for all construction work or for the modification or complete rehabilitation of all buildings.

The liability  for its preparation corresponds to the Promoter, as the ultimate responsible for the building process – regardless of the fact that, given the technical nature of the same, they must be written by other technicians, also taking into account their possible effect of exoneration from liability -.

The minimum content of the building book includes:

  1. The final Building Project of work
  2. The certificate of acceptance, signed by the Promoter and the Builder, and which incorporates the final certificate of work, issued by the Building Project manager.
  3. The relationship identifying the developer, designer, builder, Building Project manager, director of execution of the work, entities, and laboratories for quality control of the building, and suppliers of materials.
  4. The instructions for use and maintenance of the building and its installations.
SETTING THE PRICE ON THE CONSTRUCTION CONTRACT

 

 

The payment of the price is the main obligation of the Promoter of the work. The Client must pay to the Builder at the time of receiving the object of the contract, which is the work commissioned. The price in the construction contract must be true, i.e. it must be determined or determinable at the time of conclusion of the contract.

The way in which the price revision is assessed, as well as the modifications that are authorised and made to the works during their development, should also be determined or determinable at the time of the conclusion of the contract.

 

 PRICE SETTING. –

In practice, it is possible to find combinations of the different pricing systems in the same contract. The price and the system for setting the price depend entirely on the free will of the parties. A distinction is made between three pricing systems in construction contracts:

  1. by adjustment, lump sum or flat rate.
  2. by executed parts or by units of measurement. and
  3. by administration.

 

  1. – By adjustment or flat rate. – The flat-rate contract is the modality of the work lease in which the activity of the Constructor includes the totality or one or more parts of a Building Project whose flat-rate price, which is unique, is paid by the Promoter in attention to the product, the work in its totality, as a global set. This type of contract is quite common in public works. Their content can be self-regulated in the field of the autonomy of the will of the parties and, in this sense, the parties, always with the objective limit that its intrinsic nature implies, can agree by a fixed price the execution of any work, susceptible also to be carried out by piece or unit of measure.

The principle of invariability of the contracted price for a given work, as a price assessed by flat-rate adjustment, should not be applied to cases of unbudgeted works, which represent a real increase, change or addition to the original Building Project.

       

a’. Modifications of the Building Project by the Promoter.- Changes to the Building Project may result in a price revision. The Builder must accept simple or minor modifications to the Building Project, increasing or decreasing, which do not involve objective novation of the contract, even without express agreement between the parties.

For relevant or major modifications to the Building Project, the contract often introduces limitations in favour of the builder above which he is not obliged to carry out modifications to the works or the Building Project.

For both major and minor modifications, it is advisable to expressly provide in the contract for possible modifications to the Building Project, establishing the valuation systems and adjustments required in relation to the variation, fundamentally with regard to price and time.

       

b’. Variations and price revision

The Builder cannot ask for a price increase even if the price of labour or materials has been increased. but he can do so when a change has been made in the plan that results in an increase in the work, provided that the owner has given his approval.

 

         Modifications or variations in the works. The Architect or Builder who is responsible for a flat-rate adjustment of the construction of a building or other work in view of a plan agreed with the owner of the land may ask for an increase in the agreed price when the owner has given his authorisation to a change in the plan that produces an increase in the work, it being sufficient that the change in the contract exists and that it is duly specified and adjusted flat-rate, for this requirement to be met.

In practice, the problem of the owner’s tacit consent is reduced to a problem of proof for the Builder in demonstrating that the owner gave his consent or approval.

        The contractual clause which provides that any change made to the execution of the work or the Building Technical Project will require the common agreement of the parties is a relative flat-rate adjustment, which takes place when the contracting parties agree that the price fixed may be corrected in relation to or in an appropriate manner for the differences between the work actually executed and that described in the Building Project.

Inflation or exorbitant changes. Despite the principle of price invariance, the parties may include in the contract the price revision agreement to adapt the price of the contract to the movement of inflation, thus avoiding the loss of purchasing power and the misalignment in the calculation of the price that this experiences over time and, consequently, the imbalance of the benefits.

The jurisprudence of the Spanish Supreme Court admits the revision of the price of the construction contract derived from exorbitant changes of the circumstances supervening rebus sic stantibus clause. This clause plays a role in long term contracts and requires extraordinary alterations of circumstances to be made at the time of performance of the contract in relation to those foreseen at the time of its conclusion, which must be completely unpredictable and have the effect of breaking the necessary balance of the services.

       

       

  1. – By executed pieces or by units of measure

The parties must have expressly provided for this pricing system. This agreement does not involve the physical division of the work as a unit into phases or units of different sizes, but rather the execution contract is broken down into a series of partial work leasing contracts, so that each one has as its object the execution of a piece or unit or class of the total work.

 

  1. – By administration or economy

It is a mixture between the mandate and the construction contract. The Promoter undertakes to pay the price of the materials and labour employed in the execution, the expenses incurred and the industrial profit of the Builder. The construction contract by management is compatible with the fact that the Promoter pays the Builder a deposit of the price of the work as it is being executed.

 

 

 WORKS CERTIFICATIONS

In practice, the Builder gives the Promoter a certification of the value of the works completely executed during a certain time, generally monthly. Each work certificate indicates, for each item, the percentage of work executed to date over the total number of units.

The amount shown in each construction certificate is generally understood to be the final value of the work performed, the materials used and the costs related to such work and materials, including industrial profit, labour costs and other costs that may have been incurred by the builder in connection with the work performed. Therefore, the work certificate is usually provided by the builder together with additional documents, such as invoices, receipts and any proof of the value reflected.

       

Conformity of the Promoter and the Architect to the work certifications. – The conformity of the Promoter and the Architect to the work certifications have the purpose to serve to deliver to the Builder quantities on account of the price in a proportional amount to the value of the executed works. Their approval and payment do not imply the approval and reception of the executed and paid works.

In case of any work certification does not obtain, in whole or in part, the conformity of the Promoter or of the facultative management, the Constructor is informed together with the reasons for the disagreement. In such a case, the Builder must remove the unit or units subject to non-conformity from the work certificate in question, for its clarification or correction within a given period. Once those units have been corrected, the Builder issues a New Building Works certificate for the said correction work, which must be approved within a specific time.

As a guarantee, the Promoter may retain temporarily a percentage of each building certificate.

 

 

 GUARANTEES IN THE CONSTRUCTION CONTRACT

       

  1. – Guarantees for the Promoter. – There are two types of guarantees referred to below: retentions and guarantees or bonds.

Withholdings.- To ensure compliance by the Builder with its obligations under the construction agreement signed with the Developer, in practice it is agreed that the Developer will withhold a percentage of the amount of each construction certificate issued.

The amounts withheld are accumulated by the Promoter as a guarantee for:

  1. any damage, flaw, or omission during the execution of the works.
  2. the correction and repair of deficiencies, vices, decreases, deteriorations, insufficiencies, or damages of the works.
  3. any penalties incurred by the Builder under the construction contract.

In this way, any breach or economic liability of the Builder allows, if so agreed in the contract, the Promoter to proceed to the execution of all or part of the deductions made. It is frequent the agreement by which if the retentions are executed, the price agreed in the contract is adjusted downwards in the amount of the executed retentions.

The LOE refers to the retentions only when it establishes the possibility of replacing the insurance of material damages and the insurance or financial guarantee (to cover during one year the indemnification of material damages due to defects or faults of execution that affect the elements of completion or finishing of the works), with the retention by the Promoter of 5% of the amount of the material execution of the work.

The minimum amount of the insured capital is 5% of the final cost of the material execution of the work, including professional fees, and therefore, if the withholding made is to replace this insurance, the amount must not be less than 5%.

The retention is a clause that modifies the liability  of the Builder to ensure that he carries out his tasks in accordance with the buildings lex artis, so that, in a system of payment by work certificates, it leaves part of the price in the hands of the Promoter until the moment of final acceptance.

        Endorsement or deposit – In addition to the deductions, it is usually agreed in the construction contract that the builder gives the promoter a bank guarantee or deposit of a certain percentage of the total price of the work, as a guarantee to the promoter of the correct completion of the work within the agreed period.

As with withholding, it is usually agreed that in the event of any breach, poor performance or financial liability on the part of the builder under the contract, the Promoter may proceed to the execution of all or part of the bank guarantee, with the guarantor bank being responsible for payment.

In the event that a provisional reception and a definitive reception are agreed, the guarantee or deposit usually remains in force until it is returned by the Promoter to the Builder, which is usually agreed to take place when the provisional reception is lifted. However, sometimes the Builder requests that the term of validity of the endorsement be extended until the definitive reception. In this case, in exchange, the amounts that have been retained with each partial works certificate are returned upon provisional acceptance of the works.

 

  1. – Guarantees for the Builder.- The guarantees that can be provided by the Promoter of the work in favour of the Builder are all those that fit within the freedom of agreement between the parties. Thus, for example, the same guarantees specified in favour of the Developer may be granted, such as maximum mortgage, future mortgage, pledges, etc. The possibility of establishing guarantees is very broad and depends on the agreements reached in the Construction Contract.

       Pledge.- A pledge is a bailment that conveys possessory title to property owned by a debtor (the pledgor) to a creditor (the pledgee) to secure repayment for some debt or obligation. The pledge is a type of security interest. The Spanish Civil Code does not contemplate the right of the Builder to hold the object of the work as a pledge until it is paid, so if he wants to have this right it must be expressly agreed in the contract. The material occupation of the thing carried out by the Builder is instrumental, in order to fulfil his contractual obligation to execute the work.

       Spare parts credit or Repair Loans.- Repair loans appear as a consequence of loans granted for the performance of a work, either for the construction, repair or maintenance of a property. The amount owed for materials used in the work and the money owed for such work is also considered a loan for repair.

In these cases, the repairer who has paid for the increase in the value of the property as a result of the work, and supported the advanced payment, acquires a preferential performance right on the built or improved property, as a guarantee for the repayment of the advance paid. For this guarantee purpose, the spare-parts-creditor has the power to register his title in the Land Registry as a charge specially linked to the property.

       

 PAYMENT OF THE PRICE IN THE CONSTRUCTION CONTRACT

        The obligation to pay the price is the main obligation of the Promoter. The general rule is that the price of the work must be paid at the time of delivery. If the price was fixed in the contract by executed pieces or units of measurement, the Builder may require the owner of the work to receive it in parts and to pay it in proportion, presuming that the parts have been approved and received.

In practice, it is usual for the Promoter to make payments during the execution of the works. The agreement of the Promoter and the Building Project management to the work certifications has no other meaning than to be able to deliver to the Builder amounts on account of the price in an amount proportional to the value of the executed works, thus helping to finance it. Their approval and payment do not imply, unless otherwise agreed, the approval and reception of the executed and paid works.

Likewise, payment may be made in whole or in part after delivery of the work if so agreed.

Place of payment. – The price is paid at the place agreed by the parties. In the absence of an agreement, payment is made at the debtor’s address, in this case, the Promoter. Nowadays, due to money laundering rules, payment must be made by bank transfer, or bank check.

 

 

 DIRECT ACTION BY SUBCONTRACTORS, SUPPLIERS AND WORKERS

        Subcontractors, suppliers and workers are third parties in relation to the contract for the execution of work signed between the Developer and the Builder, and yet their actions have a direct impact on the object of the contract, based on their relationship, in principle, with the Builder.

Although the contracts only take effect between the parties that grant them and their heirs, a Legal Action is provided for in favour of third parties who, being directly unconnected with the contractual relationship between the Developer and the Builder, put their work and materials into a flat-rate work of the Builder, for which they have a Legal Action against the owner of the work up to the amount owed by the latter when the claim is made.

The Direct Action only fits when the price of the works was fixed by adjustment or lump sum. The amount up to which third parties may claim under this Direct Action is that sum owed by the owner of the work to the Builder.

If there is a chain of construction contracts and subcontracts, Direct Action disappears when one of the contractors or subcontractors owes nothing to the next, thus breaking the chain.

       

Credits. – Two credits are required for the implementation of the Direct Action, with different subjects. Firstly, a credit from the person who places the work or material on the site in front of the Builder. and secondly, another credit from the Builder to the Promoter of the work.

At the time of the exercise of the Direct Action against the Client it is necessary that the credit between the Builder and the owner of the work has not been extinguished.

The Direct Action can only be exercised for credits derived from work and materials contributed to the work. To exercise the Direct Action, it is not necessary that the Constructor’s claim be made against the owner or that his insolvency be declared. Therefore, the subcontractor, supplier or worker can exercise at any time, even during the execution of the works, his Legal Action against the owner of the works. It is possible to exercise the Direct Action as many times as credits related to the work and supplies have been contributed to the works and have not been satisfied.

The existence of definite, overdue, and enforceable credit is required, which is the one that legitimizes the one who puts his work and materials in a work to claim from the property the amount he owes to the Builder.

       

Proof of the existence of the credit. – The person exercising the Direct Action is required to prove the existence of the credit of the Promoter of the work with the Builder. However, the courts have established that the Developer must also prove that he does not owe any amount to the Builder, so that if he does not succeed in proving this, he proceeds to uphold the claim of the plaintiff in the exercise of the Direct Action.

In practice, if a lawsuit is brought in relation to the above-mentioned claim, the plaintiff will usually cite both the Builder and the owner of the works to avoid procedural problems of proof of the existence of the debt and the amount owed.

DEVELOPMENT OF THE BUILDING WORKS

      

The contract for the execution of construction work is a contract for the lease of construction work, by which one party (the builder or constructor) undertakes, in exchange for a certain price, to execute a work against the other party (the principal, the owner of the work or the developer).  The elements of the contract for the execution of the work are the works to execute and the definite price that the client must pay at the moment of receiving the construction in the time and form foreseen.    

Basically, there are two types of building works. Firstly, the contract for the execution of simple work, without the supply of materials by the builder. and secondly, the contract for the execution of work with the supply of materials by the builder. In practice, it is usual for the builder not only to carry out the work, but also to supply the materials with which it is carried out.

 

 EXECUTION OF THE WORKS. –

The Builder must execute the works according to:

  1. the contract concluded between the Builder and the Client.
  2. the Building Project drawn up by the Architect.
  3. the lex artis, which are the usual rules and good practices in construction.
  4. the instructions of the Promoter generally channelled through the optional management of the Building Project director and the Building Project execution manager.

Defective compliance with the work or failure to comply with it may give rise to liability for the various construction agents. Below are certain incidents that may affect the contract in question in its execution phase, i.e:

  1. defective compliance.
  2. breach by the Builder or Builder.
  3. withdrawal of the Promoter.
  4. loss and destruction of the thing.

       

  1. Defective compliance. – If the works are not received by the Promoter to its satisfaction because they are executed without conforming to the parameters of execution of the work – Building Project, instructions of the Promoter, etc. – it is understood that there has been a defective compliance.

The defects in the works that allow the claim of defective compliance by the Builder must be of certain importance or significance in relation to the purpose pursued and the ease or difficulty of its correction, making it unsuitable to satisfy the interest of the principal.

In case of defective compliance by the Builder, the rules of the Spanish Civil Code regarding obligations and contracts apply. Thus, if the party obliged to do something does not do it or does it in contravention of the terms of the obligation, it can be enforced at its own expense. In addition, it may be ordered that the wrong done be undone. Defective performance by the Builder may give rise to damages if he commits fraud, negligence or delay in the performance of his obligations or if he contravenes the tenor of those obligations.

If the success of the defence of a contract not properly performed is conditioned on the defect being of a certain importance, making it unsuitable for satisfying the interest of the principal, it is clear that it cannot be raised when the poor performance or omission lacks sufficient substance, so that the requirements of good faith and the principle of conservation of the contract do not authorise the exercise of the resolutory action and only allow the remedy.

The owner of the work has the right to have the defects rectified by the Builder without payment of any additional amount, to have the price reduced in proportion to the defects, to ask for a new realization, or to have the contract rescinded when there is an absolute impossibility to repair or essential inadequacy at the end.

The Promoter may not raise an exception for defective performance when the defects in the work are minor. In this case, payment cannot be suspended and the reservations must be recorded in the certificate of receipt.

        In case of defective performance by the Builder, the Promoter is entitled to demand:

  1. the correction of defects, without any extra cost.
  2. a price reduction.
  3. a new execution. or
  4. the cancellation of the contract, if the cause of the non-satisfaction of the client is impossible to repair.

The defence of defective performance is a variant of the general defence of breach of contract. This exception applies if the Builder has only performed the service at his own expense in part or in a defective manner, in which case the Client may refuse his own service until the former has been fully performed or rigorously executed. The difference between the two exceptions lies in their assumptions, because while the exceptio non adimpleti contractus assumes that the Builder has neither performed nor offered his service, the non rite adimpleti contractus assumes that he has performed it, but inaccurately, in a partial or defective manner. There is another difference with regard to the order of proof, since in cases of non-performance or incomplete performance the burden of proof for the full performance in question lies with the builder, while in cases of defective performance the burden of proof for the deficiencies or irregularities in the builder’s performance lies with the principal, since in such cases the latter not only denies the builder’s compliance with his obligation, but also indicates the lack of regular and exact performance by the builder.

       

 

  1. non-compliance by the Builder- In the event of default by the Builder, the Client is entitled to request compliance. If the breach is of sufficient magnitude, he may demand the termination of the contract by filing an exception to the unfulfilled contract.

The power to terminate obligations is implicit in the reciprocal obligations, in case one of the obligors does not comply with what is incumbent upon him.

The injured party has the option of either performance or resolution of the obligation, with compensation for damages and payment of interest in both cases. However, he can also request the termination of the obligation after having opted for performance, when this proves impossible.

It is not necessary for the completion of the work to be able to claim breach of contract, provided that the cause is sufficient.

 

  1. Withdrawal of the Promoter. – The owner of the work may withdraw from the contract at any time prior to delivery, without the need to allege any cause and with the sole obligation to indemnify the Developer for any damages arising from such withdrawal.

An exception is made to the general principle of not leaving the validity of the contract to the discretion of one of the contracting parties by granting the owner the power to withdraw, at his own discretion, from the construction of the work even if it has been started, compensating the builder for all his expenses, work and profits which he may obtain from it. By virtue of this, the owner who desists from the construction of the work is obliged to leave the builder unharmed, that is to say, to ensure that the builder’s assets are not damaged in any way as a result of such desisting, and therefore the utility to be compensated is that which the builder could obtain from the whole of the work and not just from the part that has been carried out.

       

Indemnification – The right of the builder to receive indemnification does not depend at all on the reasons that have induced the owner to unilaterally withdraw from the construction contract. In principle, after the owner has withdrawn from the contract, the builder must remain unharmed without any financial loss.

If the cost of the work is much higher than that set out in the contract, there would be no compensation. however, the right to compensation is recognised in favour of the Builder for the expenses, work and profit that the Promoter may obtain from the construction of the work.

There is a guiding jurisprudential criterion to fix the compensation for utility that is considered adequate for the Builder and that amounts to the price of the work plus a generalized percentage of 15% on the same. But this amount is merely indicative and the determination of the compensation, in the absence of an agreement between the parties, corresponds to the trial judge as a matter of fact.

The determination of a quantum of compensation by the courts is not subject to review on appeal, unless it is disproportionate or disproportionate to a greater or lesser extent, which would result in a manifest error.

       

Difference with contract termination. – The power of unilateral withdrawal of the principal is autonomous and independent of the power to terminate the contract. The two respond to different reasons, as are the consequences in terms of the respective compensation.

The exercise of the power of withdrawal does not require any cause or reason to be given, while the exercise of the power of decision requires the failure of one of the parties to comply.

 

  1. Loss, deterioration and destruction of the works.- The regulation of the Civil Code in relation to risk in the contract for the execution of works is inspired by the principle of risk and chance of the builder. The risk is assumed by the Builder until delivery also in the event of fortuitous events and force majeure.

Upon delivery, the risk of loss of the works, including by acts of God or force majeure, is transferred from the Builder to the Client. The risk also passes if the Client is in default of acceptance at the time of delivery.

In the case of destruction or loss of the works derived from fault or fraud of any of the parties apply the general rules of obligations contained in the Spanish Civil Code.

 

Builder’s Risk. – The risk in the contract for the execution of the works refers to the loss or destruction of the works. The question of who bears the risk in the construction contract is a particularly important one:

  1. Contract for the execution of work without the supply of materials. If the Builder merely executes the work, putting in only his work or industry, he cannot claim a stipend if the work is destroyed before it has been delivered, unless there has been a delay in receiving it, or the destruction has come from the poor quality of the materials, provided that he has warned the owner of this circumstance.
  2. Contract for the execution of work with supply of materials. If the Builder agrees to supply the materials, he assumes the risk of loss of the item in the event that the work is destroyed before it is delivered, unless the Client is in arrears in receiving it.

The risk assumed by the Builder until the delivery of the works in case of loss, deterioration or destruction of them is that of not being able to claim the price for his work and for the materials he put them in, that is, the consideration that corresponds to fulfill the client that ordered the work, since in the lease of works the client’s consideration is due not for the work carried out, but for the result of said work, that is, the work executed and completely finished.

       

The only two exceptions to the builder’s risk that may occur are for late receipt of the works by the builder, and because the destruction or loss of the works has resulted from the poor quality of the materials provided by the principal and the builder has given timely notice of such circumstance.

 

 

 DEADLINE FOR THE EXECUTION AND DELIVERY OF THE WORKS. –

The deadline for the execution of the works is the one agreed by the parties. The beginning of the execution of the works is usually made to coincide with some of the following moments:

  1. the signing of the contract for the execution of the works.
  2. the signing of the Act of delimitation of the construction on site.
  3. the date of obtaining the building permit.

It is common practice for the Builder to prepare and deliver to the Promoter who commissions the work a programme or schedule of work, and the Builder must comply with the partial deadlines and the final deadline for completion reflected in that programme.

The modification of the initially agreed deadlines depends on the will of the parties and on what they have agreed and stated in the respective construction contract.

 

 Variations in the deadline. – Force majeure and the inclusion of modifications or variations in the works may lead to variations in the execution time.

  1. – Force majeure. – In relation to the deadline, what has been agreed by the parties will apply if a cause of force majeure occurs during the execution of the works. Generally, if the Builder suffers a delay in the works as a result of a force majeure event that prevents the execution of the works, the corresponding adjustments are made within the deadline. The Promoter usually agrees to extend the deadline by a period equal to the delay suffered by the Builder due to the case of force majeure.
  2. – Inclusion of modifications or variations in the works. – This case is usually regulated in the contract itself. In practice, it is usually agreed that substantial modifications to the Building Project that lead to an increase in works also lead to an increase in the execution time.

 

 Delayed delivery. – For the Supplier to default on its obligation, the delay must be culpable and attributable to the Supplier. In relation to compensation for damages resulting from a delay in delivery, it is necessary that the existence of the damage is proven and accredited.

 

 Penalty clause. – The penalty clause is designed to benefit the owner of the work to compensate him for the damage caused by the delay in delivery of the work already completed. It is a usual clause in construction contracts by which the parties agree that the Builder will pay a certain amount of money as a penalty to the Promoter for each day of delay in the delivery of the works in accordance with the agreed term of completion.

The penalty clause serves the Promoter to ensure that the work will be delivered by the Builder within the agreed time, except in case of unforeseen circumstances or force majeure. The penalty replaces the compensation for damages and the payment of interest in case of failure by the Builder, unless otherwise agreed by the parties.

       

Penalties and possible recovery. – In practice, it is common to include a clause in the construction contract to guarantee the Promoter the completion of the works on time, so that in case of failure by the Promoter to meet the final deadline or any of the partial deadlines set in the construction schedule, the Promoter is obliged to pay the Promoter a monetary amount as a penalty for each calendar day or fraction of a calendar day of delay in meeting the final deadline or partial deadline in question.

The delay in the delivery time and the corresponding penalty, usually has a maximum limit, after which the obligation is considered to have been breached, and the rules of non-compliance must be applied.

 

 

 

 DELIVERY AND RECEPTION OF THE WORKS. –

Once the work has been completed, the Builder is obliged to keep it until delivery. The Builder must make the completed works available to the Promoter within the agreed time and, in any case, once they have been completed.

The effectiveness of the Builder’s obligation to deliver the executed works is not subject to the prior approval of the works by the Promoter. The mere fact that the Builder makes the work available to the Promoter, unless otherwise agreed, transfers the risk of accidental loss of the item if delivery coincides with receipt, and triggers the obligation to pay the price.

However, the Builder does not fulfil his obligation to deliver the executed works if they have been executed partially or in a defective manner. The work must be delivered completed.

       

  1. Checking. – Once the delivery has been made and before the approval and reception of the works, the technical verification that the works have been executed as agreed and in accordance with the lex artis of the construction sector is carried out.

The verification of the works implies the recognition of a reality. It is not a discretional act, but it implies the work of contrasting the agreed works with the reality of what is executed. If the work is correctly executed, the client cannot refuse to approve it and, therefore, to accept the work.

If, after verification, substantial defects are found in the works or they do not conform to the agreement, the Promoter may refuse to accept the works. The rejection must be justified in the minutes, which will set the new deadline for acceptance.

If what is detected are not serious defects, but simply some reservations, the Promoter may accept the works on condition that the defects detected are corrected.

       

  1. Approval. – The approval of the works implies the recognition by the Promoter that the works have been executed correctly and are in accordance with the contract. This recognition takes place after the control and verification of the works. The consequence of the Promoter recognizing the correctness with which the work has been executed and declaring his satisfaction with the work done by the Builder is the obligation to receive the works and pay them.

The approval and reception of the works are closely related. Thus, the reception is tacitly understood to have taken place if, after 30 days from the notification made by the Builder to the Promoter informing him of the completion of the works, the Promoter does not show any reservations or reasoned rejection in writing.

       

  1. Reception. – The reception of the work is the act by which the Builder, once the construction is completed, hands it over to the Promoter and it is accepted by him. It is an acknowledgement by the Promoter that the Builder has fulfilled its primary obligation. It can be done with or without reservations.

The Promoter may refuse to accept the work on the grounds that it is not completed or that it does not comply with the contractual conditions. In this case, the rejection must be justified in writing in the minutes, which must set the new deadline for acceptance.

It is common practice to agree on a provisional reception and a final reception. In general, the provisional acceptance does not require the work to be completed in its entirety, and the client proceeds, during the period between the provisional and final acceptance, to check the execution and to record any defects and reservations detected in the work. The Builder must have completed the work, including finishing touches, and rectified the defects and reservations detected prior to the final acceptance.

The LOE refers to a single reception, the definitive reception, which corresponds to that in which the work must be totally finished. The periods of liability and the guarantees begin to be calculated from this definitive reception, an never from the provisional one.

 

The delivery and reception of the works may coincide, but they are two different conceptual moments.

The main obligation of the Constructor is the execution of the contracted work with the adequate characteristics for its purpose, that is to say, that it fulfills the conditions of aptitude and suitability.

Provisional acceptance, with or without conformity, implies the total completion of the works in accordance with the requirements, and may only present defects, which cause either a provisional acceptance without conformity, with a time limit for their remedy, or small deficiencies or lack of small finishing touches, which can be remedied in one month, which in no case can be an obstacle to the provisional acceptance with conformity. It is responsibility  of the Building Project management to assess the state of the work, and in the months following the deadline, not only does the work have defects or is pending completion, but there are also works to close openings for passage of facilities, etc.. The work in question has major defects that justify the defendant’s refusal to accept it.

       

Unreserved Acceptance. is a simple acceptance and determines the beginning of the calculation of the terms of liability  and guarantees, and means that the work has been executed and delivered as agreed in the contract, disappearing from this moment for the builder liability  for apparent defects. On the other hand, the owner has the right to remedy hidden defects, even after receipt of the work.

Acceptance with reservations. A reception with reservations is a reception that is subordinate to the condition that the Constructor corrects the defects or reservations detected. The reservations must be recorded in the minutes, which set out the time limit for the defects to be rectified. Once the defects have been rectified, the unreserved acceptance of the defects is recorded in a separate document. The correct execution of the reservations by the Builder does not increase the agreed price.

Although, in general, the calculation of the periods of liability  and guarantee starts from the date on which the certificate of receipt is signed, or when this is understood to have been tacitly produced, in the case of receipt with reservations the periods of guarantee are calculated from the moment the reservations are rectified.

       

Deadline. – Unless expressly agreed otherwise, reception of the work must take place within thirty days of the date of its completion, as evidenced by the final work certificate. The calculation of this period begins with the written notification to the Promoter. Tacit acceptance occurs if, after thirty days from the date indicated, the Promoter did not express reservations or reasoned rejection in writing.

The receipt marks the beginning of the calculation of the time limits for the exercise of the legal actions for hidden defects and contractual liability.

       

Recorded statement of Acceptance. – The reception, unlike the approval, is a formal act, and must be recorded in an recorded statement with the signature, at least, of the Promoter and the Builder. Notwithstanding the formal nature of the receipt, there is tacit acceptance, and this occurs when after 30 days from the date indicated the Promoter has not expressed reservations or reasoned rejection in writing. The Recorded Statement of Acceptance is integrated into the building book, and contains:

  1. The Promoter and the Builder.
  2. The date of the final certificate of the whole construction.
  3. The final cost of the material execution of the works.
  4. The declaration of acceptance of the work with or without reservations, specifying them objectively, and the time limit within which the defects observed must be rectified.
  5. The guarantees to ensure his liabilities of the Builder.
  6. The final certificate of work signed by the Building Project manager and the director of execution of work.
GRANTING THE NEW WORK TITLE DEED & LAND REGISTRY

New construction, or more properly, Finished Construction, is an act of declaration before a Notary Public, in a Public Deed, to record in a public document the fact of having started or completed a building on a particular urban site or rustic land. By means of this Deed, which the Notary can only authorise when compliance with certain legal requirements is accredited, the building that has been constructed, or the reforms, improvements and extensions carried out, will be registered in the corresponding property at the Property Registry, in order to ensure that the Registry agrees with reality. In the case of buildings, the number of floors, the surface area of the plot occupied, the total square metres built and, if specified in the approved project, the number of elements that can be used independently.

Types of declaration of new construction.

Depending on the phase of construction, it can be declared as a new finished work (when the construction is totally finished) or as a new work under construction. The latter is usually done if the owner needs to obtain a mortgage loan from a financial institution to execute the building, giving the property to be built as a guarantee. In this case, the owner must complement the declaration with a notarial act of end of work.

If it is a private individual who is building on an urban plot of his own property, for his own use, in principle it is not compulsory, according to the civil code. However, the declaration of new construction must be made in order to contract the supplies and it is obligatory if you want to sell, rent or ask a bank for a mortgage loan. If you are a builder or developer, the declaration of new construction is obligatory.

 

In the declaration of new construction the notary checks that the building has obtained all the licences and authorisations and complies with the legal requirements, which are

 1.- Licence from the Town Hall which authorises the construction on the basis of a project presented by the owner and drawn up by an architect or other competent professional.

2.- In the case of old works, more than 15 years old, it will only be necessary to accredit the age of the building for the purposes of the statute of limitations of the possible urban infraction. 15 years generally, by means of a Certificate from the Town Hall, Certification by a competent technician, a notarial certificate describing the property, or a cadastral certificate describing and graphing the property.

3.- The technician must testify by means of a certificate, if the building is still under construction, that the description of the new work contained in his certificate and that it literally includes the public deed is in accordance with the project for which the licence was obtained. On the other hand, if the building is finished, it must prove that it conforms to the project for which the municipal construction licence was obtained and, furthermore, that the work has been completed.

It is essential that the same certificate identifies the land occupied by the building, using all its geographical reference coordinates. If this requirement is not met, the completed building declaration deed cannot be registered in the Land Registry.

4 .- It is also necessary to provide certain legal guarantees, by hiring the following insurance: 

  1. a) Insurance for material damage or guarantee insurance to ensure, for one year, compensation for damage affecting elements of completion or finish. The minimum amount of the capital insured will be 5 % of the final cost of the material execution of the work, including professional fees. It may be replaced by a deduction by the developer of 5 % of the material execution of the work.

(b) Material damage insurance or surety insurance, to guarantee, for three years, compensation for damage caused by failure to comply with habitability requirements.  The minimum amount of the capital insured will be 30 % of the final cost of the material execution of the work, including professional fees.

  1. c) Material damage insurance or surety insurance, to guarantee, for ten years, compensation for damage caused by defects originating in or affecting the foundations, supports, beams, floor slabs, load-bearing walls or other structural elements that directly compromise the mechanical resistance and stability of the building. The minimum amount of the insured capital will be 100% of the final cost of the physical execution of the work, including professional fees. The ten-year insurance is only required for buildings whose main purpose is housing.

The self promoter is exempt from the ten-year insurance for the construction of a single family home for own use, no matter if it is the first or second home, or if it is a merely temporary residence). However, if it is sold before 10 years from the date of the final construction certificate, the self-promotion company is obliged to contract the ten-year guarantee for the time remaining, unless the purchaser expressly exempts it and has previously provided proof of having used the home.

5.- The Building Book must be delivered to the final users of the building and must be provided to the Property Registry for its registry file, unless the age of the building does not require it.

 6.- The legislation of certain Autonomous Communities requires, for the notary to be able to authorise the declaration of the new building, the contribution of the licence of first occupation or certificate of occupancy.

 7.- An architect must issue an Energy Efficiency Certificate, which is valid for a maximum of 10 years.

 8.- The legislation of some Spanish Regions requires a Technical Building Inspection for buildings next to the public road and that are certain years old, to guarantee their safety.

Building your own house is not an easy process. Learn with us all the

phases and procedures necessary to achieve it

  

Contact an Architect and a Lawyer
A good architect must listen carefully to your ideas, to design the house to your measure, essentially attending to your preferences and budget. He will help you during the whole process of the construction of the house, saving time and money.
A specialized Lawyer will supervise all the legal procedures, inform you about your options and will avoid you, without any doubt, a great variety of problems.

 

Find your building plot in the ideal location
The location and shape of the plot you acquire is decisive for the design and execution costs of your home. Its shape and size delimits all the physical characteristics of the future house -m2 buildable, number of floors, orientation and views, etc.-. Before taking the decision to buy, you should visit it with your architect to decide if you can actually build your house there with the desired characteristics, and if so, consult your urban planning and legal situation with your lawyer.
If the technical reports of the architect and the lawyer have been satisfactory, you can proceed to contract the purchase of the building plot. Once again, the lawyer will be involved in all the legal aspects of the operation, such as negotiating and preparing the private purchase contract, with the necessary guarantees, and then closing the operation by granting the public deed of sale of the building plot before a notary.

 

Commissioning the Preliminary Project or Study on the Housing Project

From this point on, the architect of your choice will need to carry out topographical and geotechnical studies in order to prepare the preliminary building project.
By means of the topographical examination, the geometry and relief of the land is represented graphically to establish its exact dimensions and the physical and natural elements it contains, such as trees, rocks and pre-existing constructions.
By means of the geotechnical examination, soundings are carried out in situ, to know in detail the composition and resistance of the underlying terrain, and it is obviously fundamental for the design of the foundation and structure of the house.
Finally, in this preliminary phase, the architect, who already knows the regulations applicable to your building plot, represents graphically and literally decided with you, depending on the needs and desires that you expose and the total budget available, in a Preliminary Project. In this project you must pay a lot of attention, and review and modify it as many times as necessary, because the next step has no return, because it already begins the phase of final implementation of the project.

  

Order the Technical Documentation
Once the main lines of your home have been defined, the architect will proceed to prepare the Basic Project, consisting of the report and plans describing the works to be carried out and compliance with the applicable legal regulations, and is required to apply to the City Council for the granting of a building permit. Later or simultaneously, but with much more extension and detail, he prepares the Execution Project, which consists of the architectural, structural and installation plans, memory and state of measurements, which define, in short, all the geometry and materials necessary for the construction of the building. The more complete and exhaustive the execution project is, the more surprises and unforeseen problems there will be in the execution of the work.

  

Hire a Technical Architect
The Architect is responsible for the control of the execution and quality of the works, as well as for the compliance with safety standards. Together with the architect, he certifies the necessary documentation for obtaining the license.

 

Locating and choosing a good builder
Finding a good builder is very important. It is advisable to ask for an estimate from three different builders
The importance of a good contract that describes what is included and what is not, the guarantees, the completion time, etc., is fundamental to avoid problems during the construction period. It is best that the contract is based on the state of measurements with prices. The measurement state document of the executive project contains the description and detail of all the materials, quantities and qualities, doors, windows, etc. necessary to build the house. This document is given to potential builders to ask for the budget of the execution of the building, and it is the fundamental element of comparison of the different budgets that are offered to you, because this way you make sure that all the interested builders are budgeting the same materials and characteristics, and therefore it facilitates the comparison of the price between the offers that are presented to you . The more detailed and complete the measurement document is, the safer we will be to avoid surprises translated into higher costs.

 

Hire the provisional supplies of light and water of Work
To start the work you need the building permit, which has to be granted by the municipality on the basis of the submitted project. With this license, you can proceed to contract, on a provisional basis, the water and electricity supplies.

 

Start of the works
The architect and the quantity surveyor, by means of regular visits, must control the execution of the work so that it is built exactly as it has been decided for you and specified in the plans: dimensions, materials, etc. They must control the respect of the security in the work, the foreseen calendar and solve the problems that are appearing in the construction.
They both issue the work certificates, according to the execution phases agreed in the construction contract, so that the owner pays exclusively for the work built so far.

 

End of Work Certificates
When the construction is finished, the architect, the quantity surveyor and the builder meet with the owner to check that the house is in accordance with the project, without any construction defects and that it complies with all applicable regulations. After this final check, they issue the certificates of completion of the construction, which marks the begin

 

Documenting the new construction
With the complete documentation, you can proceed to the declaration of the new work before a notary, which we detail on another page of this website.
With the final certificate of work, you must process the first occupation license, the cadastral registration, the energy efficiency certificate and the final contracting of the water, light and gas supplies.
With the First Occupancy Licence, the Town Hall verifies that the work has respected the plans and documentation presented with the initial application. It is essential to contract the definitive service of water, light and gas supplies.
To obtain the Cadastral Registration, the finished work must be communicated to the Cadastre, with the required documentation: photocopy of the deed of new work, Final Certificate of work, photographs of the facades with the appropriate resolution, plans to scale of situation, of the plot and definitive of each plant, memory of materials and qualities and cost of material execution of the works.
The architect himself prepares the certificate of energy efficiency of the house.
Finally, you can proceed to the final contracting of the final supplies of the house.

 

 

And start enjoying your new home