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Thread: The Licence of First Occupation Explained

  1. #11
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    Dear Sir,

    I suspect this could very well be the case, yes.

    It should be the same architect that signs it, not a different one. I believe that member you write will be right.

    As we always recommend on giving legal advice, one should in general not complete without a Licence of First Occupation issued by the Town Hall. There are a few exceptions in any case which are already highlighted in the article that starts this thread i.e. developer is teetering on filing for receivership and the buyer has no bank guarantees issued securing their stage payments.

    Yours faithfully,

  2. #12
    john
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    Default The Licence of First Occupation Explained

    i am due to sign 4 a resale my solicitors says i need a 2nd habitation license is this true as i need a surveyor at 350 euros 4 this

  3. #13
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    Dear Sir,

    In some parts of Spain (i.e. Valencia region) a second Licence of First Occupation may be required, yes.

    Surveyors normally charge 350€, it's a fairly standard fee.

    Yours faithfully,
    Raymundo Larraín Nesbitt

  4. #14
    Jesper
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    Default The Licence of First Occupation Explained

    Hello,
    We are about to buy a townhouse outside Marbella. It is a 10 years old townhouse. Our laywer was about to sign the contract yesterday but called us to inform us that there is no Licence of First Occupation. In the community there are three rows of townhouses but there is only licence for the first row. What is the "worst scenario" if we sign? Kind regards, Jesper

  5. #15
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    Dear Sir,

    It depends on the legal standing of your community. As you are probably aware in Marbella there were over 18,000 illegal properties.

    This has been reduced to less than 500 with the (ever) imminent approval of Marbella´s new Master Plan. Those dwellings to be demoslied are largely uninhabited, with the exception of the Banana Beach which remains as the symbol of Marbella's Gil corruption era.

    Please read my articles on the matter which has a list of those developments which had/have legal issues:

    Developers Forced to Compensate Marbella's Town Hall for Planning Irregularities - 1st October 2007

    Marbella’s New Master Urban Plan to be Approved Provisionally - 28th October 2008

    The legal situation has vastly improved since I wrote both articles.

    As I do not have details on your case it's hard for me to give you founded legal opinion. In any case one does not normally request a Licence of First Occupation for a resale property that is over ten years old. LFO are requested for new build or off plan property.

    In your case do you have official utility connections (water & electricity)?

    Do you have an individualised water and electrical meter?

    Does the landlord have a contract with the utility companies?

    Is he paying IBI tax?

    In your case, and taking for granted your property is not one of the 500 dwellings legally earmarked for demolition, the worst case scenario would be for you to pay a fine to the Town Hall to "regularise" the illegality.

    I know some developments in which a green belt area belonging to the Town Hall has been built upon by a front row ort else even a golf course, whereas the back rows where built in a proper building-designated area.

    Yours faithfully,
    Raymundo Larraín Nesbitt

  6. #16
    Jesper
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    Default The Licence of First Occupation Explained

    Thank you so much for your answer! Yes, the townhouse we are interested in buying (In a community called "Last Green") has individualised water and electrical meter. Does that make it safer for us to buy? We are ready to take the risk that a buyer in the future will try to pay less. But the worst scenario is to loose our investment or even worse, to loose our investment and be forced to tear it down...Could that happen.? Regards, Jesper

  7. #17
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    You're welcome.

    Last Green? Doesn't ring the bell, sorry.

    I'm writing now an article on property demolitions because everyone seems to be fretting over this issue as if buying in Spain was a legal gamble of sorts. Far from it.

    Let me clarify that demolition orders in the vast majority of cases are circumscribed to rural property. Obviously we have prime examples in developed land such as the Banana Beach always on the media spot light, but these are very rare let the truth be said.

    Your lawyer should be able to confirm on whether your property will be legalised or not within the next months. Even though the New Master Urban Plan for Marbella hasn't been approved yet lawyers are aware already of the developments which will obtain a LFO, even if provisional. It's not as if lawyers were in the dark on this issue. I know it sells newspapers to scare everyone off their shoes but in Marbella at least the damage extent is under control and we know which developments are earmarked as illegal or do not qualify for a regularisation procedure. As written previosuly they are under 500currently. With this I do not mean to condone the past era of corruption, juyst merely setting the record straight.

    Even well-known developments in Marbella East (i.e. Elviria area) will be legal in a few month's time once they obtain the provisional LFO or the new Master Plan is approved once and for all.

    The fact that your property has individualised water and electrical meters is legally reassuring, yes, because it means you are not under the builder's supply (which can be terminated without notice if they for example file for creditor protection) and have offical utility connections. But I cannot confirm, sorry.

    In any case let me just add that LFO are not normally requested for resales, unless the property is fairly new (i.e. under 5 years old). LFO are typically requested for off plan property, as per my article.

    I've even had a case in which someone wagged his finger at me accusingly at completion because I had failed to provide a LFO for a twenty year old property!!! Whatever.

    Yours faithfully,
    Raymundo Larraín Nesbitt

  8. #18
    Jesper
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    Default The Licence of First Occupation Explained

    Thank, now I am a little more calm. The contract is now ready ti sign. The lawyers has made an appendix to the contract with the text: "La parte optante conoce el hecho que la finca carece de Licencia de Primera Ocupacion, conociendo y aceptando la actual situacion urbanistica de la finca, no teniendo nada que reclamar por este concepto a la concedente, incluso para futuras cargas y/o gravamenes que la finca pudiera ser objeto." Is this a proper appendix when the LFO i s missing? Regards, Jesper

  9. #19
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    Dear Jesper,

    Further to your prior query the New Master Urban Plan of Marbella is foreseen to be finally approved in February 2010, next month. Source: REU.

    Even on final approval, it will be legally challenged by many lawyers on behalf of their clients.

    Regarding your question on the appendix, it means is you agree not to hold the vendor liable for any problems that may arise because of a lack of First Occupation Licence (LFO). You expressly acknowledge that you are fully aware of the Planning status of this dwelling (meaning if there are any illegalities you are claim that you are fully aware of them and accept them) and additionally you waive taking any legal action against the vendor should there be any future Planning problems such as any compensations necessary to have the property regularised. More on this here:

    Developers Forced to Compensate Marbella's Town Hall for Planning Irregularities - 1st October 2007

    This is the kind of document I would not sign or have any of my clients sign unless I am positively certain of the Planning issues involving this real estate. Otherwise you are basically signing a blank cheque not holding liable the vendor for any event related to LFO and Planning issues allowing them to legally walk away clean.

    Should there be any kind of Planning problems, you will be held responsible. You expressly waive any legal redress against the vendor.

    So bottom line, it's not a "normal" appendix to sign on lacking a LFO by any stretch of the imagination. It is one-sided, biased and favours the vendor.

    In general you should only complete when a LFO has already been issued by a Town Hall (for off plan properties, resales do not normally require a LFO). There are however qualified exceptions to this golden rule which are clearly explained in my article on License of First Occupation that starts off this very thread and are related to the developer being close to filing for Creditor Protection or the buyer not having been provided with bank guarantees to secure their stage payments:

    The Licence of First Occupation Explained - 29th January 2009

    Bank Guarantees in Spain - 12th November 2008

    Yours faithfully,
    Raymundo Larraín Nesbitt
    Last edited by Lawbird Lawyer; 01-22-2010 at 12:33 PM.

  10. #20
    Joolz
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    Default The Licence of First Occupation Explained

    We completed purchase of town house in Jan 2008 and got Bank G'Tee for 12000 euros as no Habitation Cert. Our house is completed and habitable and was on builders elec untll this was disconnected last summer. The developer has stopped working on site (11 houses - 4 completely finished) Our solicitors have now executed the bank g'tee and the builders bank have agreed to release the funds as the 2 year period has passed and we have no Habcn Cert. Can we connect to our own elec supply yet or can we apply independently to the local council for a HAbcn Cert?

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