Structural dampness, cracking, and faulty installations often appear only after completion — and the limitation periods to claim are brutally short

Two Overlapping Legal Regimes

Spanish property law provides two separate remedies for property defects — and both may apply simultaneously in a new-build purchase:

Civil Code (Arts. 1484–1490): applies to any sale of property, new or second-hand, where the seller transfers a property with defects the buyer did not know and could not reasonably have known. Time limit: six months from discovery — a forfeiture period (plazo de caducidad) that cannot be interrupted.

Ley 38/1999 LOE — Building Regulation Act: applies to construction defects in new buildings (or significant rehabilitations), with liability for the construction agents who participated in the process. Time limits: 1, 3, or 10 years depending on the type of defect.

When a new-build is purchased directly from the developer and construction defects appear, both regimes may apply: the LOE for defects attributable to the building agents, and the Civil Code for defects the seller (developer) concealed or did not disclose. The choice of regime should be guided by the nature of the defect, the time since discovery, and which parties remain solvent.

LOE Warranty Periods — 1, 3, 10 Years

One year (finishing and fit-out defects): paintwork, flooring, tiling, suspended ceilings, internal joinery, bathroom and kitchen fittings. These are minor defects that do not affect habitability but do affect constructive quality. This is the period most commonly exhausted before the buyer has taken action, particularly where defects appear progressively.

Three years (habitability defects): defects affecting the building’s basic habitability requirements — waterproofing and water-tightness of facades, roofs, and below-ground structures; acoustic and thermal insulation; sanitary conditions; water, gas, and electrical installations. Filtration damp through roofs or facades, condensation problems from inadequate thermal insulation, and plumbing installation defects typically fall within this period.

Ten years (structural defects): defects that directly compromise the mechanical resistance and structural stability of the building — foundations, pillars, beams, floor slabs, load-bearing walls, retaining structures, and any other structural element. Structural cracking, differential settlement, movement of load-bearing walls, and reinforcement corrosion are the most serious defects and carry the longest warranty period.

The warranty period runs from the date of reception of the works (signed between developer and contractor). Within the warranty period, the injured party has an additional two years to bring the liability action. If a structural defect appears in year nine of the ten-year period, the claimant has until year eleven to file.

Liability of Developer, Contractor, and Architect

Developer: solidarily liable to purchasers for all material damage in the building during the warranty periods, regardless of which construction agent is the direct cause. The developer is the most easily identified party and the one against whom initial claims are most frequently directed.

Contractor: liable for execution defects during the one-year period, and also for three- and ten-year defects attributable to execution failures.

Project architect: liable for design defects — incorrect structural dimensioning, inappropriate construction system selection, erroneous or inadequate technical specifications.

Director of works and quantity surveyor/technical architect: liable for defects attributable to their supervision and direction of execution.

Suppliers of products and materials: liable for defects caused by inadequate, defective, or non-conforming materials.

In practice, claims are typically directed against all agents jointly and severally, leaving the court to apportion responsibility between them — which allows the injured party to recover the full amount of loss from the most solvent defendant.

Civil Code Remedies

Rescission action (acción redhibitoria): the buyer returns the property and recovers the price paid, plus contract costs, plus damages if the seller acted in bad faith. Complex in practice for occupied, mortgaged, or improved properties.

Price-reduction action (acción quanti minoris): the buyer keeps the property and claims a proportionate reduction in the price, quantified as the cost to repair the defect. Most frequently used in practice. If the seller acted in bad faith, damages for consequential loss may be added.

Both actions are subject to the six-month forfeiture period from discovery. Formal notification of the defect to the seller on the date of discovery is critical to document the start of the period and to show the action was brought in time.

Decennial Insurance — Claiming from the Insurer

Decennial insurance is the most robust guarantee for new-build purchasers because it allows a claim directly against the insurer, independently of the developer’s or contractor’s solvency — both of whom may have dissolved or entered insolvency years after the handover.

To activate the policy, the insured (owner or owners’ community) must notify the insurer in writing within the warranty period, accompanied by the technical report establishing the existence and nature of the defect. The insurer appoints its own expert. If the insurer rejects the claim or the proposed compensation is inadequate, the decision may be challenged before the civil courts or in arbitration if the policy provides for it.

Expert Evidence — the Decisive Element

In hidden-defect and LOE litigation, the quality of the expert evidence is as important as the legal strategy. The expert report must establish: the nature of the defect (construction, design, or materials); the causal link between the defect and the observed damage; the probable onset date of the defect (determinative for limitation purposes); attribution to one or more construction agents; and the quantum of loss — repair cost, diminution in value, and consequential losses (temporary rehousing, loss of rent, damage to contents).

We coordinate the expert and legal dimensions from the outset, ensuring the report addresses the legally decisive points and is not vulnerable to attack in cross-examination.

This service is part of our real property and civil law practice.