Antonio Flores (Columnist)
AS part of the documents any willing vendor needs to have ready for a potential buyer, we find the licence of first occupancy or occupation (LFO), an official certification that the property has been built in accordance to the planning permission is received and is fit for living: it is the duty of any property developer or self-builder to obtain one as soon as the construction has been finalized.
Sometimes however, for different reasons, the LFO is not available but the owner still wants to sell. Unlike the unique Valencian community system, where a person can obtain a second license of occupation by merely filling out a ‘responsible declaration form’ (a type of sworn declaration by the applicant that the property complies with applicable regulations, regarding its use and building parameters), the rest of property owners in the country do have a significant issue with the lack of this document.
But is it legal to sell under these conditions? The ‘qualified’ answer is yes: it is legally possible to officially -and legally- transfer title to a buyer, with Notaries and Land Registrars happily witnessing and registering title deeds, respectively. And banks will lend without it.
But this may come at a cost: in some places in Spain, if you don’t have this license you cannot legally live in the property (some Catalunya cities). In Andalucia, you are not allowed to rent it and utilities’ supplies could be cut off (and there is no substitute for this document according to regional LOUA law). In Aragon, not having one is a ‘fineable’ offence -up to €6,000.
It is any buyer’s right to be shown one but if it is missing, the searches should uncover the reason behind it. It may be that the owner never got round to apply for it, innocently or deliberately (i.e. an extension was built without permission), or that it had it and subsequent legal action saw it revoked, as happened in Marbella with circa 30 thousand properties.
Whatever the reason, a property without an LFO:
– Lacks a relevant document that exists for a reason.
– May hide serious planning irregularities (conversely, having the license is no guarantee of the contrary).
– May potentially -albeit unlikely- be cut off from supplies.
– May potentially -albeit unlikely- attract fines to its owners.
– May be more difficult to sell.
Still, if a buyer is forewarned of all implications and the price is right, a property deal without a LFO can be concluded.
I am a little puzzled as to why articles that investigate the legalities of buying or selling a property that does not have a Licence of First Occupation never seem to mention the fact that apartment blocks built before a certain date (can’t remember exactly, was it 2002?) never had one to start with because there was no requirement for one back then. So unless the owners of each apartment had subsequently gone through the rigmarole of getting one (at great expense – I have been quoted thousands), then their apartment won’t have one, but unless you want to rent the place that is not really a problem. I bought mine in Andalucia and there was no issue with the utility companies.
Articles like this make out that the reasons for not having a licence are nefarious (eg “if it is missing, the searches should uncover the reason behind it. It may be that the owner never got round to apply for it”) whereas surely the most obvious and explainable reason is that the property was built before there was ever a requirement to have one? If this is made clear then buyers would be a lot less suspicious when no LFO is available, and it would also seem advisable to mention it because presumably it is by far the biggest reason for not having an LFO.