You own a building plot in Spain and wish to build your own home. In Spain, this is called autopromoción individual. However, building yourself in Spain comes with various obligations and risks. Therefore, a building contract is important to eliminate or deflect your risks as much as possible. In this article, you will find more information on the main clauses of a building contract with a construction company in Spain.
Here you will find global roadmap on self-building in Spain.
The parties
You act as the construction manager and are therefore, in principle, ultimately responsible for the project. The contractor carries out the works. Finally, there is your architect who monitors the works (technical architect), along with a safety coordinator (coordinador de seguridad y salud). The latter party basically works independently.
Price and price review
In principle, you agree on a fixed contract price for your entire project. However, it is advisable to define exactly what is included in the price. Consider not only the degree of finishing and utility connections, but also obtaining completion certificates, ten-year liability insurance (seguro decenal), preparation of the legally required safety plan (plan de seguridad y salud), insurance for the yard, etc.
Often, however, the contractor will ask for a price review clause. In itself, such a clause is common. However, it is important that the conditions for price revision are precisely defined.
An example. Material prices are rising because of global scarcity. Under what circumstances can the contractor pass on these price increases? How are the price increases redistributed? Do you pay the integral the price increase or do you work with an allocation key?
Terms of payment and execution period
You can draw up the payment schedule based on fixed dates or on the progress of the works. In the latter case, the architect can check the progress of the works (certificaciones de obra) before making any payment. In addition, you can agree a contractual retention on the periodic payments as a guarantee of the execution of the works. For example, you deduct 5% or 10% from the periodic payments to the construction company in Spain.
There should also be a clear implementation period for the works. You can attach a delay penalty to this, for example.
Additional works
You should also foresee the situation where plans are changed. Not only if you change plans yourself or order additional works, but also, for example, the situation where the municipality imposes changes. These additional works or changes are likely to have an impact on the price, so it is best to provide a mechanism for price revision.
Risks
The building contract should preferably also regulate liability for any accidents and risks on site. And this for both the contractor and any subcontractors. Which party bears the cost of the relevant insurance? And how can you check whether the contractor is properly insured?
Read more about appointing a construction company in Spain.
Staff on site
We recommend that you work with a contractor who accurately complies with labour laws. Consider the payment of wages and social contributions of staff and subcontractors. Also, all workers on site should be registered. Provide a monitoring mechanism to follow up on such obligations.
Conflicts
What happens if you are not satisfied with the work done? There are then several options for settling any conflicts contractually. For example, you can appoint an independent expert.
Completion
Before completion, your architect will confirm that the project was built in accordance with the rules of the art and in compliance with the permit (certificado final de obra). In addition, the council will confirm that your property meets local standards ( la licencia de primera ocupación). Finally, the new structure still needs to be registered via a notarial deed (declaración de Obra Nueva). There are a number of charges and taxes associated with these documents. Therefore, it is better to establish in advance who bears these charges.
Read more about the completion of a new building in Spain.
Guarantees
Besides the 10-year liability, you have two other statutory warranty periods. You have a one-year warranty on minor defects and a three-year warranty on defects affecting habitability.
Find more information on warranty periods here.
Decision
As the builder, you are responsible for the project. Therefore, it is advisable that you sign a balanced contract with a construction company in Spain. In addition, compliance with social legislation and safety on site are important issues that you monitor closely.
