When buying a property in Spain, taking out a mortgage is often an essential step. However, many potential buyers are unaware of an important rule: you will not get a Spanish mortgage if the property contains building violations or unregistered structures. This can be a major obstacle for people. In this article, you will find more information about building violations and their impact on a Spanish mortgage.
Learn more about the Spanish mortgage application process here.
Building violations and their impact on a Spanish mortgage
Building violations are changes or extensions to a property that violate the building permit or local regulations. Examples include an extra floor, an illegally constructed swimming pool, or a guest house that is larger than permitted. These breaches not only bring legal complications, but can also affect the value and marketability of the property. Spanish banks are therefore very reluctant to grant mortgages for properties with such defects.
A bank granting a mortgage always takes a risk. When a property contains building violations, the bank takes on additional risk because the property may be difficult to sell or even have to be partially demolished. As a result, banks may choose to deny the mortgage application until the violations are resolved.
Read more about the pitfalls of a Spanish mortgage.
Unregistered constructions
Another common problem is the existence of unregistered structures. These are parts of a property that were built but are not recorded in the property register. This often occurs with annexes, swimming pools or garages added after the original construction. As these are not officially registered, these structures do not officially exist. For the bank, the full legal status of the property is unclear, which in turn will most likely lead to a rejection of the mortgage application.
Read more about the difference between the property register and the land register in Spain here.
How can you check the registered state?
You can make the comparison between the description in the property register, the land register and the current situation based on the aerial photos. From this, you can quickly deduce whether certain parts are not known to the Spanish authorities.
Solutions
While building violations and unregistered structures can be a problem, there are solutions. Any building violations can often be legalised, although this can take time and money. For unregistered constructions, you can have appropriate steps taken to still have them entered in the property register. Therefore, you can suggest in the purchase contract that the seller is obliged to regularise building violations and register unregistered structures in the property register, before the notarial deed of sale is executed.
Read more about the usual terms and conditions of a Spanish mortgage.
