Damage During the Construction of a New Home

After the handover of a new home, the buyer may encounter problems due to the discovery of damage or defects that were not previously noticed

Prior to the signing of the deed, it is standard practice for the buyer to inspect the property to verify its condition and ensure that it has been completed in accordance with technical standards ….

Technical Inspection of the Home

An inspection is conducted with technicians from the selling company; you may bring your own technician, although we do not consider this necessary, and the property is inspected to verify any potential defects on-site. It should be noted that it is normal for there to be minor finishing defects, which should never escalate into major issues, as both parties must agree in writing on a list of defects that must be corrected—preferably before the signing of the deed.

Issues Following the Inspection

The problem arises from the appearance of defects that were not visible at the time of inspection and that become apparent later.

In these cases, we would be dealing with latent defects or damage resulting from poor workmanship or construction, which are subject to very specific legal regulations.

It is important to make this distinction, and we mention it because of the confusion that exists on this matter regarding damage to primary and secondary residences.

Hidden Defects in the Sale of a Home

In the sale of pre-owned property, the seller is liable to the buyer through the legal action known as “redress for hidden defects,” pursuant to Article 1,484 of the Civil Code; the buyer may seek either the annulment of the sale Alternatively, the buyer may request a reduction in the purchase price based on the significance and severity of the defects; the aforementioned provision sets forth the criteria to be followed in determining which of these two scenarios applies.

Claim Options

The buyer has these two options and must not be confused when filing a claim, because it is not possible to exercise both options simultaneously; rather, the buyer must choose one or the other depending on which is more important.

Legal Limits for Hidden Defects

The aforementioned article establishes the limits of each remedy, since the first is reserved for defects that “render the item unfit for its intended use” and the second applies to “defects that diminish its usefulness to such an extent that, had the buyer known of them, the buyer would not have purchased the item or would have paid a lower price for it.” It is therefore crucial to demonstrate the significance of the defect in order to choose between the two options, which can only be done through a relevant technical expert report.

The buyer may either rescind the contract or reduce the price by a proportional amount, as determined by experts. As provided in Article 1,488 of the Civil Code

Statute of limitations in cases of latent defects

The problem with bringing claims arising from latent defects is the strict nature of the statute of limitations for bringing such legal action, since, pursuant to Article 1.490 of the Civil Code, it is 6 months from the time the defects were described, bearing in mind that this is a statute of limitations period, meaning there is no possibility of interrupting the statute of limitations.

Construction Defects and the Liability of Construction Contractors

The primary direct liability in cases involving newly constructed buildings rests with the developer, who oversees the construction and sells the property to the buyer immediately upon completion, thereby profiting from the sale.

Developer's Liability

According to Article 9.1 of the Building Regulation Act, Law 38/1999 of November 5. “A developer shall be considered to be any person, whether an individual or a legal entity, public or private, who, individually or collectively, decides upon, initiates, plans, and finances—using their own or third-party resources—construction projects for their own use or for subsequent sale, delivery, or transfer to third parties under any legal title.”

The developer’s liability is established in Article … of the Civil Code …, and this is what Article 17.1 refers to when it states, “Without prejudice to their contractual liabilities …” in its general discussion of the liability of contractual parties.

Article 17.3.2 of the same law states: “In any case, the developer shall be jointly and severally liable with the other parties involved to potential buyers for any property damage to the building caused by construction defects or flaws.”

This is because the developer’s liability as a seller is a contractual liability derived from the purchase agreement; the developer is therefore liable for matters related to that purchase, as is undoubtedly provided for in the Building Code.

And that is why the aforementioned Article 17.3.2 stipulates that, in the event of any claim for construction defects—regardless of the liability attributable to any other party involved in the construction project—the builder shall always be liable as well.

And it stems from the contractual obligation the seller assumes toward the buyer.

Liability of Other Construction Contractors

In addition to the Developer, the professionals involved in the construction will be liable for construction defects whenever such defects can be attributed to negligence on their part; this is clearly stated with respect to the Design Architect, Project Architect, Technical Architect, Contractor, and so on.

Statutes of limitations and warranty periods in construction

In this regard, it is important to distinguish between a liability claim against the developer—which is governed by the Civil Code and therefore has a 5-year statute of limitations—and a claim that must be filed under the Building Code. Let’s take a look.

Differences Between Statutes of Limitations and Warranties

According to the Building Code, two types of time limits are established: the warranty period—which is the time during which defects must occur, as we will see—and the statute of limitations, which is the time limit for filing a claim once a defect has occurred during the warranty period.

For a period of ten years, for property damage caused to the building by defects or flaws affecting the foundation, supports, beams, floor slabs, load-bearing walls, or other structural elements, and that directly compromise the building’s mechanical strength and stability.

For a period of three years, for property damage caused to the building by defects or flaws in the structural elements or systems that result in noncompliance with the habitability requirements set forth in Article 3, paragraph 1, subparagraph (c).

The builder shall also be liable for property damage resulting from defects or construction flaws affecting the finishing elements of the work within a period of one year.

This means that the damages for which claims are covered are those mentioned above that occur during the specified period; if they occur after that period, they are not covered under the Building Code.

Once such damage has occurred, the injured party has a statute of limitations for bringing the actions provided for in Article 18 of the aforementioned Legal Text of the Building Regulations Act, which is two years from the date the damage occurred, without prejudice to any remaining actions to seek liability for breach of contract.”

As we noted above, that regulation does not preclude claims arising from contractual performance, as we mentioned in the case of the promoter, for which the Civil Code establishes a 5-year statute of limitations.

Practical Tips for Dealing with Damage

We don't want to conclude this article without mentioning some guidelines that this Alicante law firm consistently follows in its work on the many cases involving this type of damage that we handle here.

Recommendations for Dealing with Construction Defects

The first thing to always keep in mind is the need to consult a professional—whether the property is a first-time occupancy home, a new home, or a resale home—to identify any hidden defects.

A technician's visit to the home will confirm the existence of structural damage, determine the extent of the damage, and establish liability.

Another step we always recommend is to serve a demand on the construction contractors involved to interrupt the statute of limitations because, just as the statute of limitations for latent defects does not allow for an interruption, any extrajudicial demand serves to interrupt the statute of limitations period in effect at that time and restart that period from the beginning—hence its importance.

Finally, it should be noted that the sole party responsible for damages resulting from poor workmanship or substandard finishes—as we have already mentioned—is the builder, in addition to the developer, as we have stated; it is important to note that the warranty period is one year from the completion of the home.

Documents Required for Claims

In addition to all of this, you will need to gather all the necessary documentation to file a legal claim that will greatly increase your chances of success in the proceedings.

This documentation is the very documentation that this firm has thoroughly planned and prepared, and which we always require before taking any legal action.