When you buy a new-build property in Spain, you automatically become a beneficiary of insurance against defects in construction. Depending on the type of fault, the insurance policy lasts from one year to ten. In this article, we look at the policy type and what it covers.
About building insurance for new builds in Spain
Under Spanish law, all construction companies must take out insurance covering defects in new-build properties. The developer is the policyholder and must contract a 10-year insurance plan for each development.
When a property is sold within the development, the buyer becomes the beneficiary of the insurance policy. Subsequent buyers also benefit from the cover, which lasts ten years from the date of official completion of the project.
This means that individual tradespeople and companies involved in the construction process are accountable to owners for material damage, defects and faults in the building. However, they are only accountable within a certain time frame. This varies from one to ten years, depending on the nature of the fault.
Did you know? Time is of an essence when making claims on building insurance for new builds in Spain and you can only make a claim within a certain time period (see below).
Three time periods for different faults
Building insurance in new properties runs for a maximum of ten years. However, within that decade, there are two other time periods of one and three years.
This part of the insurance covers material damage that affects elements of the finishes in construction. Examples of these include cracked bathroom tiles or doors that don’t shut properly.
The 3-year limit policy allows you to claim for material damage caused by building elements or installations that affect the habitability of your home (see below). For instance, dampness in the rooms or drainage problems in a bathroom.
This is the maximum period the building insurance for new builds in Spain is required to cover. In this case, the policy includes claims on defects or faults affecting the resistance and stability of the building. Examples of this type of defect would be shifting foundations and damage to any structural element.
Did you know? The insurance policy requires the developer to fix any defect that appears within its corresponding time limit at no cost to you or other owners.
Spanish law defines habitability as having four main areas, as follows:
- Environmental and health and hygiene protection: a home must have acceptable conditions of safety and waterproofing and proper management of all types of waste.
- Protection against noise: sounds must not endanger the occupants’ health or stop them carrying out their usual activities.
- Energy efficiency and thermal insulation: energy use should ensure comfortable living conditions.
- Other functional aspects: elements of construction and facilities should allow satisfactory use of the building.
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Claiming for a building defect
As well as claiming within the appropriate time period (one, three or ten years), it’s also important to make the claim in the correct way. You should always claim in writing and the initial contact with the developer should be through registered post or even better, by burofax (a service available at Spanish post offices and one of the best ways of sending a document).
By registering your initial claim, you will have official proof that the developer has received it and the date of reception.
A defect may not necessarily be the fault of the developer. It could be the result of negligence by the architect or poor craftsmanship by a builder. Sometimes, it isn’t possible to tell who the responsibility lies with. In these circumstances, Spanish law applies joint liability.
If this is the case with the defect you want to claim for, you must claim within two years of noticing the damage.
Type of damage covered
New-build insurance in Spain covers a variety of damage types including:
- Defects endangering the stability of the building (e.g. in the foundations, floor supports and beams).
- Material damage to secondary work, installations and equipment in the building caused by major damage elsewhere.
- Costs of rectifying and eliminating the threat of subsidence.
- Costs of demolition and removal of debris (as a result of damages covered by the policy).
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Some insurance policies include cover for other defects such as:
- Secondary work
- Waterproofing of decks.
- Waterproofing of facades.
- Waterproofing and sealing of basements.
- Waiver of appeal against the builder.
- Waiver of appeal against the contractor and / or subcontractor.
- Waiver of appeal against the technical direction.
- Damage to pre-existing goods.
- Revaluation of insured sum and franchises.
Defects that are not covered
- Even the most comprehensive building insurance policies don’t cover everything and there are some defects that aren’t part of the policy. They include:
- Physical injury or economic damage other than those protected by the General Building Act.
- Damage to properties adjacent to the building.
- Damage to belongings located within the building.
- Damage produced by work carried out after individuals take ownership except work to fix construction defects.
- Damage caused by misuse or lack of proper maintenance of the building.
- Damage through fire or explosion except that caused by defects in the building itself.
Get expert advice on building insurance for new builds
All too often developers and their insurance companies try to avoid paying for fixing defects in new-build properties and it can be difficult to make a successful claim on your own. It’s therefore important to take legal advice and put the matter of professional experts.
Costaluz Lawyers will be only too happy to help with your claim. Just get in touch with our friendly team for a free no-obligation chat.