CONVERSION OF COMMERCIAL SPACE TO RESIDENTIAL UNIT
The reality for many business closures due to cessation of operations has encouraged homeowners to sell their properties through the conversion into housing, taking advantage of their venues, which often don't have much commercial potential.
This is a reality that is becoming increasingly prevalent, and to explain this phenomenon from a legal perspective, we will examine the various legal conditions and requirements that make this solution possible—a solution that, we emphasize, is ideal for property owners who often find themselves unable to list their commercial properties on the real estate market.
Another option for business owners interested in making their properties profitable would be to obtain the Conversion to a vacation rental, provided that it meets the requirements established for this purpose by the local municipalities, which always apply to ground-floor units.
1. CITY COUNCIL LICENSE
Funding is essential for this to take place conversion of commercial space into a residence, provided that the specific regulations governing changes in land use set forth in the General Urban Development Plan or the Subsidiary Regulations of the relevant municipal government do not prohibit it.
It will be necessary to the premises have the required living space, so that it may be considered habitable in accordance with the technical standards established by the City Council, and, of course, so that it meets the minimum requirements established for this purpose by the Technical Building Code.
It is important to keep in mind that not only is a minimum distance of a few meters required, but also, for example, smoke exhaust or extraction, ventilation, minimum facade height, etc..
It is essential that anyone wishing to request this change first hire a technician to issue a feasibility study, because without that report, we won't be able to know whether the premises meet the standards for conversion into a residence.
The application for a change of use must be accompanied by the required permit from the city council of the municipality where the premises are located, along with a project description detailing the work to be carried out, in which the technical engineer preparing the report certifies that the space to be used as a residence meets all habitability requirements.
In response to that request submitted to the City Council’s technical services, the City Council has two months to respond; it is important to note that failure to respond to the request is considered a positive response.
Once this phase is complete—and with an explicit or implicit favorable decision—the applicant must submit the application for a building permit, which must comply with the procedures established for this authorization, including the submission of the Basic and Construction Designs. Subsequently, upon obtaining the permit and completing the construction work, the applicant must file the First Occupancy Declaration.
2. PERMISSIBILITY IN DEEDS FOR NEW CONSTRUCTION
We have already noted that the only limitations on a property owner’s right to change the use of their property—aside from administrative ones—arise from the fact that the deed for a new construction project may include a provision prohibiting such a change of use.
If the aforementioned deed provides for this negative, the following will be required: consent of the Homeowners' Association, but it must be made clear that such a refusal must be explicitly stated
3. PERMISSIBILITY UNDER THE BYLAWS
Just as we have noted regarding the Declaration of New Construction, the same applies to whether such a refusal is explicitly stated in the Homeowners’ Association Bylaws.
4. REGISTRATION WITH THE LAND REGISTRY. PROHIBITION ON CHANGES IN USE.
- If the The Homeowners' Association has prohibited a change in use, it will be enforceable against a third party only if such prohibition is recorded in the Land Registry.
- If the ban is located in the Declaration of New Construction It is clear that this will affect third parties, since it will be recorded in the Land Registry.
5. APPROVAL BY THE HOMEOWNERS' ASSOCIATION
Based on what we have discussed so far, the Homeowners’ Association does not have the authority to prohibit a change of use, except in the cases mentioned above.
In addition, it is important to note that there are two applicable limitations, which are:
- The ban that the change in use would result in a annoying, unsanitary, harmful, dangerous, and illegal activity, and No changes may be made that may involve modifications or alterations to the building's common areas, Take, for example, the facade, as well as in the participation coefficients, the approval of which will require the unanimous consent of the Community.
- When it comes to a No exchanges allowed, a resolution requiring the approval of 3/5 of all owners will be required, which in turn must represent 3/5 of the participation fees.
6. NOTARIZED DEED FOR CHANGE OF USE AND PROPERTY REGISTRATION
Once all the requirements have been met, you must go to a notary to execute a notarial deed of change of use, which must be registered with the Property Registry.
7. CHANGE OF USE TO TOURIST ACCOMMODATION
Everything we discuss in this article applies here, and we should also mention the requirements and procedures for obtaining authorization to operate as a vacation rental.
MOST COMMON QUESTIONS ABOUT CONVERTING COMMERCIAL SPACE INTO RESIDENTIAL HOUSING
1.- If the deed of declaration for a new construction project specifies a use such as a business or the conduct of any activity, do I need permission from the homeowners’ association to change the use?
The case law of our Supreme Court is clear, and it has established this in numerous rulings, stating that the prohibition must be explicit and not merely declaratory.
The fact that certain uses are designated for the premises is not incompatible with the owner’s right to change the use; the consent of the homeowners’ association is required only if there is an explicit prohibition against changing the use.
According to case law, this recognition stems from the right to property, which is enshrined in the Constitution and cannot be restricted; therefore, any restriction may only be considered if it is explicitly provided for.
2. What majority do I need from the Homeowners' Association to approve the change of use?
- In cases where the consent of the Homeowners' Association For the change of use, the A two-thirds majority will be required.
- If the change in use involves impact on a common element or a change in ownership shares, the A majority will be considered unanimous.
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