10-Year Builders’ Insurance

[Anonymous]

I’m just about to sign a contract with a builder to constuct a villa, and I know that this is the time I should take out the 10-year Builders’ Insurance that has to be registered with a Notario. However, I’ve been advised nowadays that people don’t bother to do this. That it’s really expensive, not necessary if you chose the right builder, and really difficult to make a claim off because all kinds of things have to be proved. In other words – these poeple say – a waste of money.
Any thoughts anyone?
Geoff

[Anonymous]

I assume that you are taking on the role of “developer”? As I understand it, the 3 (triennial) and 10 year (decennial) elements of such insurance are mandatory but the 1 year element can be replaced by the developer withholding 5% of the contractual price of the works – so make sure you have a retention clause written in to your contract with the builder.
Normally the builder is the policyholder for the 1 year insurance and the developer is the policyholder for the 3 and 10 years parts although the builder can also be the policyholder for these.
I believe the 3 and 10 year insurances are mandatory because they affect the habitability and structural safety of the building. You would have problems selling on without these in place anyway.
To protect yourself further ensure that you employ a qualified “project manager” or similar to inspect the works regularly or retain your architect to do this, if they are independent of the builder.
Also, ask yourself a question – would you go ahead on a building project in the UK without an NHBC warrantied builder just to save yourself a few bucks initially?

[mariadecastro]

Since 2003 the 10 years guarantee is not obligatory to:

1.- Self-promoters ( the case of buildind your own house through a “by you” contracted builder)
2.- Restoration works.

The case, if a problem arised, would be a decenal responsability and the legal liabilities are determined by a Judge among the plurality of construction agents ( builder, architect, technical architect…)

You can also contact my architect friend Jack Neilson at jack@el-andaluz.com( british with work permits and licences to work in Spain) for advise on building process.

Best regards,

María de Castro

[Author]

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