Warranties and insurance for new homes in Spain

The construction of a new house or a new apartment in Spain is covered by guarantees that aim to protect the buyer in case of damages and construction defects.

Warranties related to the Law of 1999

In order to protect the buyers of new homes and to improve the quality of construction, the Spanish government passed the Ley 38/1999 de Ordenación de la Edificación or LOE. This law requires the builder to take out insurance covering several types of material damage and guarantees immediate compensation to the insured.
"Without prejudice to their contractual responsibilities, the natural or legal persons involved in the construction shall be liable to the owners and third-party purchasers of the buildings or parts of buildings, in the case of division, for the following material damage caused to the building within the time periods indicated, counted from the date of acceptance of the work, without reserves or from the correction of such reserves."
Translation - Art 17.1, Chap IV, LOE 38/1999.

Article 17.1 of Chapter IV of this law, which came into effect on May 6, 2000, specifically defines
the builder's liability to owners and sets the framework for three warranties of varying duration:

  • The ten-year warranty (Garantía decenal). It covers damage caused by defects and faults in the structural elements of the building (foundations, floors, beams, load-bearing walls, etc.). Without this compulsory insurance, which is the responsibility of the builder, the construction cannot be registered in the Land Registry (Registro de la Propiedad).
  • The 3-year warranty (Seguro trienal). It protects against damages related to defects in the building's construction elements or installations such as the waterproofing of roofs and facades, elevators, collective boilers... This insurance is also mandatory and must be taken out by the builder.
  • A one-year warranty (Garantía del constructor) that covers damage caused by defects in the building's completion and finishing elements. In case of damage, the builder is obliged to compensate the owner.

Other guarantees and insurance

In addition to those imposed by the LOE of 1999, developers and builders must generally take out other insurance.

The Collective Accidents Insurance (Seguros de Accidentes Colectivos) covers all work accidents that could occur on the construction site. The builder must also present a Delivery Guarantee (Garantía de Entrega) that protects the client in case of default in the execution of the work such as a delay in the construction, an overrun in the price, a bankruptcy...

Then there are two optional but highly recommended insurances. The All Risks Construction Insurance (Seguro Todo Riesgo Construcción) protects against several types of accidental and unpredictable risks that can affect a construction site (conventional, natural, human...). The risks of fire, explosion, flood, landslide or even material or execution defects are covered by this insurance. And last but not least, there is the Professional Civil Liability Insurance (Seguro de Responsabilidad Civil Profesional), which protects and compensates in case of damages caused to third parties.