Appointing a construction company in Spain: what to look out for?

In our series of articles on a Buy building land in Spain and the building process in Spain, we discussed the steps to build (or have built) a property yourself. Therefore, this article will focus on the building contract in Spain. In short: what should you pay attention to when appointing a construction company in Spain?

Who do you partner with? References

Finding a good contractor in Spain is done on the basis of references. It is advisable to work with contractors who have been active in the Spanish market for years. Therefore, check which projects they have already completed and find out from their clients about how the cooperation went.

Once you have found a reliable partner, you can start negotiating the building contract.

Description of the construction project

It seems logical, yet a good description the construction project is often lacking in the building contract. For example, you can include that the construction must be delivered in accordance with the architect's plans and description (Proyecto Ejecución and the Memoria de calidades).

Price and payment terms

First of all, it is important that you agree on a fixed price for the entire construction. You can also clearly stipulate that any outbuildings provided, such as a garage or swimming pool, are included in the price.

As a rule, you will pay 20 to 30% of the contract sum at the start of the works. Thereafter, you can agree to pay in stages, such as after the contractor achieves a certain milestone. Moreover, it is advisable to deduct 5 to 10% of the items to be paid in the measurement statement as a guarantee of good work.

Finally, I recommend making the final payment only if you have the following certificates: Licencia de Primera Ocupación, Boletín de Instalación Electrico and Boletín de Instalación de Agua. This ensures that your property can be connected to utilities (water and electricity).

After the architect certifies that the works comply with the building permit (Certificado de final de Obra) and the new structure is entered in the property register (Declaración de Obra Nueva), the construction company in Spain can consider its work completed. However, to use utilities, you also need the certificate of conformity (Licencia de Primera Ocupación) required. This document confirms that the construction meets municipal housing standards. It is therefore important to have this document before you provisionally deliver the construction.

Read more about the certificate of conformity

Include taxes to be paid in the building contract

To avoid surprises and discussions, you can also include a list of taxes to be paid in the agreement. How much are the VAT (or registration fee), stamp duty and notary and property registry fees? It is best to know this in advance.

The implementation period

Besides clear payment terms, agreements on the execution period are also important. Provide a fixed execution period in calendar days. If the contractor delivers work late, make sure delay penalties are charged automatically. This gives you an extra means of pressure.

Engaging a construction company in Spain: no mean feat

If you are considering self-building in Spain, it is recommended that you have a conclusive building contract drawn up. This will facilitate the construction of your dream home.

Do you have any questions about building in Spain? Then feel free to contact on.

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