Purchasing a property is an important milestone in anyone’s life. Unfortunately, it is common for buyers to discover, after the handover, that the property presents certain defects of which they were not informed. We are referring, for example, to defects in the electrical installations, plumbing failures, damp, inadequate thermal insulation, or cracks that could even compromise the structure of the property.
Below, we describe the possible courses of action that we recommend to clients who tell us that the property they have purchased is not in the condition they reasonably expected. It should be noted, however, that this article focuses solely on the purchase of second-hand properties. If the property were newly built, other legal avenues could be explored.
1. The remedies for hidden defects: definition and legal requirements
The most common remedy when a recently purchased property presents significant defects are the “acciones edilicias” or remedies for hidden defects, regulated in Articles 1,484 et seq. of the Spanish Civil Code.
These actions allow the buyer to rescind the sale contract or request a reduction of the price when the property presents a defect of such significance that, had the buyer known of it, they would either not have purchased it or would have paid a lower price.
The requirements that must be met in order to file a claim seeking compensation for hidden defects are as follows:
- The defect must be hidden. This means that this remedy cannot be used to claim for defects that could have been easily detected by the buyer prior to the purchase. For this reason, it is essential to thoroughly inspect the property before acquiring it
When assessing this requirement, the subjective circumstances of the buyer are taken into account, including, for example, the level of knowledge they are expected to have based on their training or profession. This means that if the buyer is, for example, an electrical engineer, it is reasonable to expect them to have the necessary knowledge to inspect the property’s electrical installation.
- The defect must be of such seriousness that, had the buyer known of it, they would not have purchased the property or would have paid less for it.
- The defect must pre-date the sale, meaning that it existed prior to the signing of the deed of sale.
If these requirements are met, the buyer may opt to bring either a “redhibitory action” (rescission of the contract) or a “quanti minoris action” (a reduction in the purchase price), depending on the seriousness of the defect:
- The “redhibitory action” is reserved for cases in which the defect is so substantial that the buyer would not have acquired the property had they had known of its existence.
This remedy allows the buyer to request the rescission of the sale contract, meaning that the buyer must return possession of the property to the seller, and the seller, in turn, must refund the price paid.
Furthermore, if the buyer can prove that the seller knew of the hidden defects, they may also claim compensation for damages. Such compensation may cover any losses incurred by the buyer in relation to the purchase or the subsequent detection and claiming of the defects (for example, notary or registry fees; the cost of the expert report assessing the defects; or even hotel expenses incurred while securing alternative accommodation).
- The “quanti minoris action” allows the buyer to request a reduction in the purchase price so that it reflects what they would have paid had they had known of the defect. (For instance, if the buyer would have paid 10% less had they had known of the defect, this is the reduction they should seek.)
When bringing this action, it is essential to obtain a solid expert report assessing the logical reduction in market value resulting from the defect found.
The period for exercising both the redhibitory and quanti minoris actions is only six months from the handover of the property. For this reason, if the property you have just acquired presents defects, it is vital to contact a lawyer as soon as possible to evaluate the potential legal options.
2. The contractual rescission action or aliud pro alio
Clients often ask whether any legal avenue remains available once the six-month period for bringing acciones edilicias has elapsed.
The answer is yes. In such cases, it is still possible to bring a contractual rescission action (aliud pro alio), which we discuss below, or a contractual liability action, examined in the following section.
The aliud pro alio action (or “delivery of something different”) allows the buyer to request the termination of the contract; meaning that the buyer returns the property and the seller refunds the price paid. The limitation period for this action is five years.
However, for this contractual rescission action to succeed, the defects must be so serious that they render the property completely unfit for the purpose for which it was acquired (for example, defects that make the property uninhabitable). The burden of proving the seriousness of the defect is even stricter here than in the “acciones edilicias” described above.
Additionally, if we choose to bring a contractual rescission action, we may also claim compensation from the seller for the damages suffered.
3. The contractual liability action
The Spanish Supreme Court has recognised that, in property sales, in addition to the remedies for hidden defects and the aliud pro alio action, a contractual liability action may also be brought.
This action, which also has a five-year limitation period, allows the buyer to claim compensation for the losses caused by the defect identified in the property.
For the action to succeed, it is necessary to prove that:
(i) the seller breached their obligations through fault or negligence; and
(ii) this breach caused the damage being claimed.
This avenue may therefore be useful when it is not possible to bring the earlier-mentioned actions, but the seller acted negligently or wrongfully.
To properly demonstrate and quantify the damages, it is likewise essential to obtain a thorough expert report.
4. Recommendations on how to proceed if the property you have just purchased presents defects
When we purchase a property —often with great effort— we all expect it to be in perfect condition or at least in the state promised to us. To ensure this, it is important that we carefully inspect the property before formalising the sale.
It is also essential to seek legal advice prior to signing the deed of sale, to ensure that it does not contain any clauses that may later limit our ability to claim against the seller for possible defects.
However, despite taking these precautions, it is still possible that shortly after moving into our new home we find unexpected defects. In such cases, it is advisable to contact a lawyer as soon as possible for guidance on the best course of action. This will help avoid the risk that, by the time we decide to bring a claim, the legal deadline has already expired.
Moreover, it will be crucial to instruct an expert to prepare a report describing the defects in the property and the harm they have caused. If you do not know any experts who can assist with this, your lawyer will normally be able to help you find one.
In short, although discovering defects after purchasing a property can be frustrating, there are various legal avenues available to protect your rights. Obtaining specialist advice from the outset will allow you to react in time and choose the most appropriate option for your case.En definitiva, aunque encontrar defectos tras comprar una vivienda puede ser frustrante, existen distintas vías legales para proteger tus derechos. Contar desde el primer momento con asesoramiento especializado te permitirá reaccionar a tiempo y elegir la opción más adecuada para tu caso.
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