Building and renovation contracts in Spain: what to do when the work goes wrong
Damp that appears a year later, a renovation abandoned half-finished, a fixed quotation that turns into an invoice forty per cent higher. We explain who is liable for what, which periods start running on the day the work is handed over, and what can be claimed, with the articles of the Building Act and the Civil Code in front of us.
Two different regimes: building work and ordinary renovation
The first thing to settle in any construction dispute is which route it goes down. This is not an academic detail: the time limits, the identity of the person liable and what has to be proved all depend on it.
The Ley de Ordenación de la Edificación (Ley 38/1999, the Building Act) applies to the building process: new build, and also works on existing buildings where they alter the architectural configuration — a complete intervention, an essential change to the façade or the volume, a change to the structural system or to the use of the building — together with the fixed installations and the equipment that goes with them (art. 2 LOE). A housing development, a full refurbishment or the addition of a storey all come under it.
An ordinary renovation — replacing a kitchen, redoing two bathrooms, tiling a terrace, renewing the plumbing in a flat — does not normally alter the architectural configuration of the building and falls outside that regime. It is governed by the contract for works in the Civil Code (Código Civil, arts. 1544 and 1588 et seq.), by liability for breach under arts. 1101 and 1124, and, where the client is a private individual and the work is carried out by a business, by consumer legislation as well.
Why the distinction matters. Under the LOE there are statutory guarantee periods of ten, three and one year, and a liability that reaches the developer jointly and severally. Outside it, the argument is about breach of contract, with a general limitation period of five years (art. 1964.2 CC) and the burden of establishing what was agreed and what was delivered. Many cases allow both routes at once, and it is worth giving up neither before the paperwork has been examined.
Who is liable for what
In building work the Act divides liability between the parties involved and imposes it personally and individually, for their own acts and for those of the people who answer to each of them (art. 17.2 LOE). Where the cause of the damage cannot be attributed to one of them, or several are at fault and the extent of each one’s contribution cannot be established, liability becomes joint and several; and the developer is always jointly and severally liable with the others towards the purchasers (art. 17.3 LOE).
- The contractor is liable for defects of execution, for the lack of skill or the negligence of the site manager and of those who answer to him, for what his subcontractors carry out and for defects in the materials he bought or accepted (art. 17.6 LOE).
- The designer is liable for the design; if he commissioned calculations or reports from other professionals, he is directly liable for any inadequacy or inaccuracy in them, without prejudice to recovering from them in turn (art. 17.5 LOE).
- The project director and the works supervisor are liable for the accuracy of the final certificate of works; and anyone who takes over the direction of a design drawn up by someone else also takes on that design’s omissions and shortcomings (art. 17.7 LOE).
- The developer is jointly and severally liable towards the purchasers, and that liability extends to anyone acting as manager of a housing co-operative or of a community of owners and to similar figures (arts. 17.3 and 17.4 LOE).
There is an express exception: they are not liable if they prove that the damage was caused by unforeseeable circumstances, force majeure, the act of a third party or the act of the injured party himself (art. 17.8 LOE). That is the defence usually raised where the owner has made alterations of his own or has neglected maintenance.
The subcontractor who is not paid
Someone who supplies labour and materials on works contracted with the main contractor for a lump sum cannot claim against the building owner beyond what the owner owes the contractor at the time the claim is made (art. 1597 CC). It is a direct action, but a capped one: which is why the moment at which the claim is made changes the outcome completely, and it is worth acting before the owner has finished paying.
The guarantee periods under the Building Act
The LOE lays down three guarantee periods, all running from the handover of the works without reservations, or from the point at which those reservations are made good (art. 17.1 LOE):
- Ten years for damage affecting the foundations, supports, beams, floor slabs, load-bearing walls or other structural elements, and which directly compromises the mechanical resistance and stability of the building.
- Three years for damage caused by defects in construction elements or installations which breach the habitability requirements: damp, insulation, health and hygiene, noise, installations that do not work.
- One year, against the contractor alone, for defects of execution affecting finishing elements.
The period that ruins most cases is none of those three. Once the damage appears within the guarantee period, the claim for it becomes time-barred two years after the damage occurs (art. 18.1 LOE). In other words: damp appearing in year eight is within the ten-year guarantee, but if two years are spent arguing with the developer without interrupting the limitation period in writing, the claim is lost. The same article preserves claims for breach of contract, which have their own time limits and are often the lifeline.
Alongside the LOE, art. 1591 CC remains in force for cases outside it: the contractor is liable for ten years for collapse caused by construction defects, and for fifteen where the cause was a failure to comply with the terms of the contract.
Home renovations: what is actually argued about
In flat and house renovations the disputes repeat themselves with striking regularity, and almost always turn on three things.
The extras nobody signed for
The Civil Code is blunt: anyone who takes on works for a lump sum (ajuste alzado) cannot ask for an increase in price even if wages or materials have gone up; he can only do so if the plans were changed and that change produced more work, and provided the owner had authorised it (art. 1593 CC). A fixed quotation is fixed. The practical problem is proving the authorisation, and what usually decides the case is the WhatsApp messages with the site manager, the emails and the site meeting records. Keep them.
The job abandoned half-finished
Where the tradesman collects a good part of the price and disappears, the course to take is to terminate the contract and claim back what was overpaid, the cost of finishing the work with someone else, and damages (arts. 1124 and 1101 CC). It pays to do this properly from the outset: a formal demand by burofax (a certified letter with proof of its contents) setting a deadline, a notarial record or an expert’s report on the real state of the works before anyone else sets foot on site, and a competing quotation for completion. Without that snapshot, the contractor will later say the defects were caused by whoever came after him.
Specifications that are not the ones agreed
Materials of a lower range than quoted, taps or joinery swapped «because they were out of stock», thicknesses and insulation below what was offered. This is breach of contract and, where the client is a consumer, also a lack of conformity. The claim is built by comparing the accepted quotation with what was actually installed, documented by an expert.
The owner may also withdraw. The building owner may withdraw at will even once the works have started, but must compensate the contractor for all his expenses, his work and the profit he expected to make (art. 1594 CC). It is a useful way out where the relationship has broken down and litigation holds no appeal, but the cost has to be worked out carefully before it is announced.
What can be claimed
- Repair of the defects, at the expense of whoever is liable for them, or the cost of repair if you prefer to have the work done yourself.
- A reduction in price where the work serves its purpose but is worth less than what was agreed.
- Termination of the contract and the return of what has been paid, where the breach is fundamental and defeats the purpose of the contract (art. 1124 CC).
- Damages: accommodation while the property is uninhabitable, removals, damaged furniture, lost profits of business premises that could not open, interest (art. 1101 CC).
- The costs of the proceedings, if the claim succeeds in full.
In building cases the usual course is to sue several of those involved at once, together with their insurers. Whether there is ten-year structural cover or professional indemnity insurance changes the prospects of actually recovering anything, and it is one of the first things we look at.
How we handle it, step by step
Paperwork and legal route
Contract, accepted quotation, final certificate of works, handover record, licences, invoices and messages. On that basis we decide whether the case goes under the LOE, under the contract or down both routes, and against whom.
Expert evidence before claiming
A report from an architect or a technical architect identifying the defect, its cause and the cost of putting it right. A construction case is not won without expert evidence; and it is best obtained before negotiating, not after.
Formal demand and insurers
A burofax to each party liable, setting out what is claimed and why, and interrupting the limitation period. Notification to the insurers and a request for the policy. A good many cases are settled at this stage.
Attempt at an out-of-court solution
The law requires proof of an attempt to resolve the dispute before suing. We put it forward with the expert report on the table and a defensible figure, which is when it actually works.
Claim and trial
Proceedings against those liable and their insurers, with our expert giving evidence and being tested against the other side’s. We explain beforehand what may happen in each scenario and what each one costs.
Deadlines worth not letting slip
- Two years from the appearance of the damage to claim under the LOE (art. 18.1). It is interrupted by a formal out-of-court demand, but you have to be able to prove it.
- Ten, three and one year of guarantee from the handover of the works, according to the type of defect (art. 17.1 LOE).
- Five years for personal claims for breach of contract, from the moment performance could be required (art. 1964.2 CC).
- Three years of statutory guarantee where the client is a consumer and what fails is goods supplied and installed by the business, with a further five years in which to claim from the moment the defect becomes apparent (arts. 120 and 124 of the consolidated text of the General Act for the Protection of Consumers and Users).
Frequently asked questions
The developer tells me the guarantee has already expired. Am I left with nothing?
Not necessarily. You have to check when it started running — the handover without reservations, or the making good of those reservations — and what kind of defect it is, because the period ranges from one to ten years. And even where the LOE guarantee has expired, claims for breach of contract may survive, which art. 18.1 itself preserves, together with any claims against the seller under the contract of sale (art. 17.9 LOE).
Do I have to sue everyone, or can I go against the contractor alone?
It depends on whether the cause of the damage can be pinned on one party. If it is clearly a defect of execution, the contractor is enough; if there is doubt about the origin — design, supervision or execution — suing only one is risky, because each defendant will point at the one who is not there. In practice, where the expert report does not settle the cause, the claim is brought against all of them and against the developer, who is jointly and severally liable towards the purchaser.
The contractor is billing me for extras I never authorised.
If the works were contracted for a lump sum, he cannot ask for an increase in price unless there was a change to the plans which produced more work and you had authorised it (art. 1593 CC). The authorisation does not have to take any formal shape, but it does have to be proved: emails, messages, signed site records. It is best not to pay «to avoid trouble» before that paperwork has been reviewed, because the payment will later be read as acceptance.
Do I need an expert, or are photographs enough?
You need an expert. Photographs establish that there is a stain; the report establishes that the stain comes from a particular defect of execution, attributable to someone, and how much it costs to put right. That is the document on which the case is decided, and also the one that brings the other side to the negotiating table.
What if the tradesman was self-employed and has since closed down?
That is a problem of recovery, not of law. It is why we look from the outset at whether there is public liability insurance, whether work was subcontracted — the contractor is liable for what his subcontractors carry out, art. 17.6 LOE — and whether there is a developer or a solvent company somewhere in the chain. If there is nothing to recover from, we tell you before you spend money on a lawsuit.
Where we work
Our office is in Villanueva de la Cañada, and we act regularly in Brunete, Villanueva del Pardillo, Valdemorillo, Quijorna, Majadahonda, Las Rozas, Boadilla del Monte, Pozuelo de Alarcón and the rest of western Madrid. Construction cases in this area are heard by the courts of first instance for the relevant judicial district and, on appeal, by the Audiencia Provincial de Madrid (the provincial appeal court). This page forms part of our civil law practice; if what has failed is a particular installation, see also heat pumps and solar panels.
Tell us about your case
If you have defective building work, an abandoned renovation or an invoice for extras you do not recognise, tell us what was contracted and what has happened, with the quotation and whatever photographs you have. We study every case before taking it on, and we tell you frankly whether it has any prospect of success and against whom.
First consultation: quoted before we start.
28691 Villanueva de la Cañada (Madrid)