Is this document needed to complete a sale?. In other words, if I want to buy I house, is this document required to be presented?-
Before July 2008, it was not necessary to obtain a Certificate of Habitation to complete a sale. Sellers were not requested to present the CH to new owners. So, notaries, land registry officers, banks, lawyers, etc were not requesting the CH to complete the sales. Thus, this document was not obligatory before July 2008.
Why this document was not obligatory to complete sales? – Because, the aim of this document, as explained above, is to “connect” the property to water and electric for the first time, and, once connected, to “change” the existing contracts into the new owners name.
In fact, for RESALES, during decades, Spanish buyers and sellers have been connecting their properties to water and electric, and changing the supplying contracts without this document. Specially in rustic land areas, electric and water companies were not asking for this document to change the supplying contracts.
So, NEW properties, and RESALES were bought and sold, and sales were completed at the notary office, and registered in the land registry office, without CH. Thus, builders were selling their new built houses to buyers without this document. Also, vendors (in resales) were selling their properties to buyers without.
In some areas, even supplying companies were not demanding this document to contract. In the majority of the cases, buyers could contract the water and electric by a phone call, or changing the name of the contracts into their names, and the CH was never been requested. Even today this is possible in determinate areas.
The problem arrived with NEW properties, like new apartments, urbanizations, etc, and for the explosion of the Spanish crisis. As explained, before July 2008 was not necessary for builders to provide to their buyers the CH to complete their sales. So, it was really common to sale properties “on construction”. For example, in an urbanization with 500 houses, the builder could sale by blocks of, for example, 100 houses, once they were completed, without to wait to complete ALL the urbanization infrastructure.
The CH is the last document obtained after the finalization of the construction works of the building. So, as before 2008 it was not necessary to present CH on completion, builders were building and selling their properties before they were “completely finished”. With this scenario, buyers they were buying their new properties ready to be used, but, sometimes without to “complete” other phases or blocks from the urbanization, or some urbanization infrastructure. Buyers were connected to supplies with “building supply” eventually, with the hope that the builder, once completed the rest of the urbanization, or the rest of the urbanization works, would then provide them with “mains” supply.
This was the scenario before the Spanish real estate “crisis” in the years 2008-2011.
But, with the crisis, it was repeated in the market that builders entered in bankcrupcy suddenly, and their companies were in big financial troubles because banks were closing . Also, the market stopped, and big urbanizations were suddenly unsold. So, builders were blocked with a dramatic position in which they could not finish the urbanizations or construction already started, because they could not find enough credit to do it from banks. In addition to this, they could not get private finance from their sales because the market was stopped, and they could not sale their properties.
As result of this scenario, buyers who previously had completed their sales and bought units from the builder from urbanizations not completed, they found theirselves on “building supply” utility contracts, and they saw how the builder simply disappeared, leaving the urbanization complex unfinished. As the global works of the urbanization were not complete, the CH was impossible to be obtain it, and buyers, and families, were left with “building supply” for long time.
This problem did not happen in RESALES where, with very few exceptions, sellers and buyers of OLD properties, which were really connected to water and electric, could obtain the cnahge of the contracts into the new owners name, after the sale, without any kind of problems. Thus, it was really common in the market NOT to apply to the CH on resales (urban and rustic), if the properties were already connected to water and electric, and when the CH was not needed to change the utility into the new owner’s name.
But, in July 2008, a new law came into force for all the Spanish territory. One of the intentions of this law was to avoid situation of buyers of New properties in urbanziations, complex, buildings, etc. This law said that builders cannot complete the sales of NEW properties without the CH. And ordered to notaries, land registry offices, etc, to request the CH to complete the sales of new properties. But this law, was forcing the notaries and the land registry officers to ask for the CH to complete purchases ONLY FOR NEW PROPERTIES.
In instance, this law did not say anything regarding RESALES. So, as consequence, to complete a sale of a resale, it was not necessary to provide this document.
This law helped to avoid future problems with buyers buying NEW properties, but, as they did not mention anything in relation to RESALES, creating a big confusion in the market.
As explained above, buyers and sellers were selling, and reselling their properties, without the CH. Resale buyers were changing their water and electric bills without any kind of problems, and the notary never asked for the CH in their transactions.
The confusion was created when, after the approval of this law, durign the years 2009-2010, buyers started to ask to vendors to provide this document. Sellers were requested to provide the CH, but, when they consulted the notary office to confirm if this document was obligatory to be supplied, they were confirmed that it was not requested by the law. So, notaries, land registry offices, etc, only required the CH for NEW sales, and not for RESALES.
A big confusion started on that period between buyers who were requesting this document in RESALES, and sellers who did not want to provide it as they were not forced to.
This confusion was even worse in RESALES in RUSTIC Land properties built in less than 10.000 m2. During a long time Town Halls in rustic areas did not know how to react when sellers, or buyers, where asking for the CH to complete their sales.
Several Town Halls (TH) decided to give the CH with no restrictions. They considered the CH as an “administrative” document to get, or to change, the electric and water contracts. As these Town Halls did not consider this document as a “legal” document, there were cases in which a property could have a perfect CH, and a fine to be built illegally.
In other cases, TH decided to give CH to all properties (built in more or in less than the minimum plot), always that no fines for construction were affecting that property. This was the most logic position.
In instance, some others decided not to give the CH to rustic land properties, if they were not respecting the minimum size of land (mainly 10.000 m2). The position of these Town Halls created the unfair and illogic situation in which quite old properties, even built 20-40 years ago, were refused to get the CH because they were built in plots smaller than the minimum.
Also, the confusion was even worse because, in the majority of the cases, buyers were asking to vendors the CH to buy their properties, even knowing that, in the area in which that property was located, the CH was not being requested by the supplying companies to change the utility contracts in their names.
In the meantime, the country of Spain has been supported financially by EU institutions. One of the requirements from the EU to Spain to receive financial help was to improve the Environmental Protection, and reduce Environmental Impact. The reason of this requirement is that, during decades, Spain has not followed the EU directives on this way. Translated into the construction market, it means that constructions and buildings were built in Spain without considering or respect the EU laws on this way (mainly, reduction of the energy consumption, and reduction of the residual water)
During 2012-2013 and 2014, this confusion now seems to arrive to an end. It seems now that the majority of the Town Halls and Regional Governments (including complicate areas like Catral, Elche, Denia, Javea, etc) have created a base of what it should be required to obtain the CH, which is, more or less the following for RUSTIC LAND properties:
- Independently of the size of the plot, the property must be FREE of fines for construction.
- That the property and its constructions are declared and pay the proper council tax
- Is widely requested to supply an architect report of the construction.
- The property must fulfill with the environmental normative of the area (energy consumption, and residual water).
With this, the eventual confusions created about if rustic land properties in less than 10.000 m2 without CH were finish. So, is general the POSITIVE position from the maority of the Town Halls in respect of the legal situation of the thousands of OLD properties BUILT in rustic land (and legally consolidated properties), in a plot smaller than the minimum standard. So, after all these confusions and disputes, the Town Halls are widely giving CH if the above conditions are provided.
We have to say that there are only few Town Halls (like Crevillente) with a very unreasonable position to refuse to give CH in an open way.
I am a seller (not a builder), DO I NEED TO PROVIDE THIS DOCUMENT TO THE BUYER?.
The answer is easy: From a , LEGAL POINT OF VIEW: NO. There is not any law in Spain which forces the seller (in a resale) to provide the CH in order to complete.
But, in instance, from a COMMERCIAL POINT OF VIEW, it will be MORE RECOMMENDABLE if you provide it, because it will confirm the buyer that, whatever is the interpretation of laws in the area, or whatever are the requirements from the utility companies, the changes of the utility contracts are guaranteed. In other words, your property will be easy to market it if the CH is provided.
The same if the CH is expired. CH use to have a validity of 5 years. So, even if you obtained one when you bought, and even in the case that the Spanish laws do not force you to provide it, from a “commercial” point of view, it would be better for the buyer, if you offer the property with the CH renovated.