Investments, Finance & Law, Business culture
Legal strategy and construction defects
For most people, purchasing a home is the most significant investment of their lives. However, the delivery of a property does not always meet the buyer’s expectations. In some cases, construction defects, poor finishes, or structural issues arise, affecting the use, enjoyment, and safety of the property. These issues are known as construction defects and, in Spain, are primarily governed by the Building Regulation Act (Ley de Ordenación de la Edificación – LOE), the Civil Code, and consumer protection regulations.
Construction defects are flaws in a building or dwelling that result in material damage and affect essential conditions of habitability, safety, or functionality. They may include structural defects affecting foundations, beams, slabs, or other load-bearing elements, compromising the building’s stability and safety. They may also involve defects related to habitability, such as problems with waterproofing, insulation, noise protection, plumbing, electrical systems, or general building services. Finally, there are execution or finishing defects, which affect appearance or completion without endangering habitability or safety, such as poorly laid tiles, cracked paint, misaligned doors, uneven floors, or surface dampness.
The LOE establishes the respective liabilities of the developer, architect, contractor, site manager, and execution manager. Importantly, the developer bears joint and several liability, meaning that the buyer may bring a direct claim against the developer, who may later seek recourse against the party actually responsible.
Limitation periods depend on the type of defect: ten years for structural defects, three years for defects affecting habitability, and one year for finishing defects. Structural defects may be covered by the ten-year structural insurance policy (decennial insurance), which protects against serious hidden defects affecting the building’s essential structure.
In addition, claims based on contractual liability against the developer-seller may be brought within the general five-year limitation period established by the Civil Code. A thorough inspection prior to completion, written notification of defects, and proper documentation are essential.
In condominium properties, claims may be brought individually by affected owners or collectively by the homeowners’ association, subject to approval by the general assembly.
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