March 25, 2006 at 1:14 pm #51674
had a call from developers this morning to say that we now have power at our off plan development and they are installing temporary meters for both blocks on Tuesday. He advised we could go to the notary after that. My question is: there is not yet a Licence of First Occupation granted, they say “will be soon”.
I am concerned as I have always read that it is foolish to sign before this is issued. I have contacted my independant lawyer in Spain and await his response but thought you knowledgeable people could also give an opinion.
March 25, 2006 at 4:53 pm #61460
The temporary supply is probably the developer’s ‘builder’s suppy’.
This is a practice becoming more common in order for developers to get people to complete without a Licence of First Occupation.
As you know, without the LFO, you can’t get utilities through the proper channels re. electricity and water.
However, as our lawyer pointed out, this can be dangerous. What happens when one day, all the airconditioners are switched on, a few washing machines, a few lifts….and poof – a power surge or power failure.
Who will pay for damage to electrical goods (not the insurance companies!).
A builder’s supply is not insurable or safe.
You are not legally obliged to complete without the LFO and all recommendations I have ever come across are never to do so.
I am sure your developer would love to go to the notary after Tuesday, my advice would be to tell him you will only go when he has an LFO.
P>S> Recently, the Junta banned a developer (AIFOS) from playing this same game, and forbade them to continue giving their new development their builder’s supply!
March 25, 2006 at 6:21 pm #61462
Hi All I have just completed on a property ( Friday ) with this licence , but do not yet have water or electric supplied . The builder needs to supply a transformer at a cost of 123000 euros , which he has not done , hence no one has the basic services . Also the mains water is 50 meters away , but no link in between.
Looks like it doesnt matter if a licence is issued or not , makes no difference
Am looking to other suplies , generator , solar , and diging in a water connection myself .
Is the Town hall now responsible , if licence is issued ?
March 25, 2006 at 7:43 pm #61465
A nightmare will always go away
I wouldn’t lay money on it!
March 25, 2006 at 9:04 pm #61467
Am absolutely devasted for you and your position!
What on earth was your lawyer doing, allowing you to complete on a property without all the utilities in place????
How can the builder/developer obtain a Licence of First Occupation without electricity and water in place????
The whole purpose of this licence is that it should be your guarantee your property is fit for habitation (the other name for this licence is Licence of first Habitation).
Something is wrong. Am wondering if there really is a LFO in place. Either it isn’t or someone has badly screwed up at the Town Planning Office.
In my opinion, you should get on your lawyer’s neck and ask him why he allowed you to complete with your property in this uninhabitable state.
Demand to see a copy of the LFO and see who has messed up and/or misled you.
Maybe the developer, maybe the Town Planning but definitely your lawyer.
Are you in the Costa del Sol?
March 26, 2006 at 1:26 am #61469
Please make sure your provisional power/water supply does not mean ‘electricidad de obra’ and ‘agua de obra’…
If so, DO follow Charlie’s advice… do not complete…
‘electricidad de obra’ and ‘agua de obra’ means far less ‘power’ (both in water and electricity) than needed for a normal living place… (it’s just the power needed to build the house) your electric appliances can be seriously damaged (specially computers and expensive audio/Tv sets) and you wont have enough water power to have a decent shower.
You wont have a regular electricity and water supply unless you get your LFO. Furthermore, using ‘electricidad de obra’ and ‘agua de obra’ when ‘using’ your house (living there) it’s considered a fraud.
March 27, 2006 at 9:06 am #61480
I agree with my colleague César.
The “agua y luz de obra” is a dodgy manoeuvre carried out by the developer so as to make you complete. This is only meant for building purposes, nothing more, not to dwell in it.
What you really need is the Licencia de Primera Ocupación which enables the hook up of regular -and legal- supply network (i.e. telephone, gas, water, electricity…). That Licence is also demanded by banks to obtain a mortgage on the property etc.. it has a wide array of legal implications. Without said licence it’s simple, DON’T complete.
You must understand some buildings are legally/urbanistically off-plan (=”fuera de ordenamiento”; not to be confused with the term off-plan= “sobre plano”) and though they do have “agua and luz de obra” it is not forseable they’ll obtain said Licence in the near future, perhaps in the most agravating cases being actually pulled down by the Town Hall (such as in Estepona with a Hotel) or at best lingering in a legal limbo for the next couple of years until matters are resolved.
If one of my clients still insists I force them to sign a legal document by which I’m left free of any legal responsabilities because they have decided, despite my better judgement, to go on ahead and complete without said Licence.
March 27, 2006 at 3:00 pm #61487
Our contract says completion June 2005! The water and electricity is indeed “de obra” and we will not sign as per your advice. On behalf of many in the same situation here, can we try for our money back with interest as so far over the contract completion dates now?? Will azsk the same question to our lawyer tomorrow but lots of others read this excellent forum and may need help.
March 27, 2006 at 8:06 pm #61489
There is a full licence issued and La Caxia bank approved a mortgage on the property , but we now find thar the builder has not fitted the required transformer as arranged with power company , in fact i find out he didnt make the first payment to thepower company as arranged , so no power ?
Also ther is 50 meters of pipe not fitted to link up the supply of mains water .
Looks like this licence is not worth the paper it is written on , or can we now put the blame on the Town hall
March 27, 2006 at 8:22 pm #61490
I spoke to our mortgage lender today in Madrid and told them there is no LFO but completion is offered. they said no problem to them, they would go ahead and arrange to release the funds for us anyway!! (this is a major lender from the UK with an overseas division)
We have a tranformer in place now (cable in place and Iberdrola passed it last week.) As to the water, apparently a further water pipe needs laying as our supply to the apartments is running off the pipe from a house which was buldozed to make the development. We have large holding tanks in the basement with electric pumps for pressure.
We are told the LFO will be issued in May!
March 27, 2006 at 8:35 pm #61491
Would that be the H*****X?
March 27, 2006 at 8:36 pm #61492
You may very well think so, I couldn’t possibly comment!!
March 27, 2006 at 9:29 pm #61493
Someone from our development, which also has no LFO, was granted a mortgage by this bank. They said providing this person was aware of the implications , they would grant it.(mortgage)
March 28, 2006 at 8:21 am #61495
If you are taking over the mortgage of the developer (with the same bank he had) in some cases they actually accept it despite there no being a LFO.
This is because an initial loan was done to the developer by the bank to buy the land and construct. When the horizontal division is carried out later on, the loan is divided between each apartment or flat proportionatly of the complex or development.
So in fact when buying the flat and sigining the contract you are taking over the position of the developer in the loan. So being exactly the same bank in these cases even though the LFO hasn’t been granted the bank says it’s ok, obviously. It’ll always be better for the bank to divide the risk of its loan between a broader base of clients than have it all concentrated in one (the developer) which is riskier. It’s the: “don’t put all your eggs in the same basket”.
It’s a simple matter really. The bank has already lent it’s money and is looking for a way to recoup it. It’s safer bet for them to spread the loan risk throughout as many purchasers as possible rather than concentrate all the risk on the developers ability to payback (bankruptcy, default etc..). All this bank wants is payback and reduces its creditial risk.
Another matter would be If you attempted to take this mortgage to another bank with more favourable loan conditions for you. The new bank would most likely refuse to take on the mortgage from the first bank because there’s no LFO granted by the Town Hall. The first bank has already put down it’s money and given it to the developer (thus taking it’s chances) so LFO granted or not it only wants it payback no matter what. Whereas the new bank hasn’t loaned any money yet and without a LFO will not take the risk to grant a mortgae and pay the first bank off.
My advice remains the same, NO LFO, NO COMPLETION.
March 28, 2006 at 8:30 am #61497
We are told the LFO will be issued in May!
Are we talking about Administrative silence again????
Beware!!!! NO LFO, no right to use your house!!!!
March 28, 2006 at 9:19 am #61499
IF the bank is the H*****x, and as they are a UK based bank also, they can also take a charge on ALL of your assets, ie. your UK residence if everything goes pear shaped in Spain. The Bank has nothing to loose…you have everything to loose. You would be well advised to listen to Drakan & Cesar. Will you sleep well with this hanging over you if you complete and there is still no LFO? I don’t think so!
March 28, 2006 at 11:21 am #61502
I do not think there is a single bank in Murcia that will refuse to mortgage a house without Habitation Certificate (Licence of First Occupation).
The banks are queuing up to hand over money to off-plan purchasers in this region – and this includes all of the Spanish banks.
March 28, 2006 at 2:42 pm #61504
So even the Spanish Banks are on the “exploitation” bandwagon! 🙄
March 29, 2006 at 8:13 pm #61531
We are meant to be completing tomorrow but have now been told the apartment has no habitation certificate. We are really upset about this. If we do not complete we have lost a lot of money as our money is sitting in a Spanish bank account, we have booked flights over to Spain for Easter and we now have to rent a property as we can’t use our own. Also, the builder has our 62,000E deposit.
We have been told that it is impossible to know when the certificate will be available so we could be in this position for a long time.
Completion not taking place is not our fault yet we are being penalised but the builder does not have to pay any compensation.
My independent lawyer Gonzalo Ross (whose name I got from this site and who we would certainly recommend) has advised us not to complete.
We were careful to choose a very well established builder with a good reputation so why are they selling properties without this certificate and why did they fail to tell us there is no certificate until just before completion? It seems we loose whatever we do!
March 29, 2006 at 8:22 pm #61532
Pampas, I am so sorry to hear your news. Do you have a Bank Guarantee? This at least can protect your money. Ask your Lawyer. Who are the developers and whereabouts is your property? I can imagine your disappointment at this late stage. It beggars belief. 🙁
March 29, 2006 at 10:40 pm #61533
Thanks Claire for your reply. The builder is TM Torreblanca – we went for a well established builder with a good reputation and did not for one minute expect these problems.
March 30, 2006 at 7:24 am #61534
You DO NOT have to complete if there is no habitation license. Your builder cannot make you, nor should you complete without the LFO.. You must find out if you have a Bank Guarantee. Your lawyer SHOULD have got one for you. If there is not one, ask them to get you one ASAP!
We also thought we were going with a reputable builder, but we were ignorant of the fact that these developers will sell Off-Plan even though they do not have the appropriate legalities in place. We did ask our lawyer if everything was in place and they assured us we were dealing with a trustworty developer and that they would not sign our contract if anything was amiss. ( we have the correspondence to proove it!) Another mistake…we trusted the lawyer!! 👿 Don’t give up! 😉
April 6, 2006 at 5:36 pm #61640
I am about to find a mortgage for a property that is 50% paid for would be glad if anyone will be able to point me in the right direction. I intend to sell in a year or two. Before I sign the deeds what should I be looking out for. I am aware of the Licence of first Habitation/occupation. Is there anything I should be aware of?
April 9, 2006 at 11:16 am #61674
Very intresting all that with once again excellent advice, i have instructed my lawyer not to sign untill all paper work is in place and that includes all the power supplys being in place. However my friends have gone over this week having been told there lawyer has signed so they may have the same problem. We have also been told that the agent who sold us the apartment which in cluded a full package may have shut down there name is Hilton House wonder if anyone has any info.
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