It is common for the buyer who acquires an off-plan or new-build property to fear that what has been acquired does not correspond to what has been contracted and promised: differences in surface area, inferior qualities to those foreseen, construction defects that are revealed as the property is used, etc. Whether a property is newly built or second-hand, there is always a risk of uncovering hidden defects after use or as time passes. These hidden flaws can compromise the quality, functionality, or safety of the property. At DAVO Law Offices, we specialize in claims related to hidden defects, ensuring that our clients receive the necessary legal support to protect their investments.
What Are Hidden Defects?
A hidden defect is a serious flaw in a property that cannot be easily detected during a pre-purchase inspection. These defects not only affect the functionality or value of the property but can sometimes pose risks to its occupants.
In Spain, hidden defects are primarily regulated by the Civil Code (Articles 1484–1490) and the Building Regulation Act (LOE). These regulations protect buyers from defects that are not visible at the time of purchase.
Key Characteristics of Hidden Defects:
- Difficulty to Detect: They are not visible during a basic or superficial inspection.
- Pre-Existence: The defect must have existed before the property was purchased.
- Significant Impact: They affect the habitability, safety, or value of the property.
Examples include: Dampness hidden beneath fresh paint or structural cracks concealed by cosmetic renovations.
Legal Claims for Hidden Defects
When a buyer discovers hidden defects in a property, they have the right to seek an effective solution to compensate for the damage caused. This can include the repair of the defects, financial compensation, or in severe cases, the termination of the purchase agreement.
It is important to note that civil claims for hidden defects must be filed within six months of signing the purchase agreement for second-hand properties. For newly built homes, the claim period extends to two years.
In this regard, legislation and jurisprudence have been responsible for collecting and developing all the actions that assist the buyer:
- The building actions: referring to the remedial action that gives the buyer the possibility, in the event of a defect or hidden defect (i.e. a defect that could not be seen with the naked eye at the time of the transaction), to choose between withdrawing from the contract, being paid the expenses paid (redhibitory action) or reducing a proportional amount of the price (estimatory action or quanti minoris). It is important to point out that if the buyer is an expert in the matter (architect, builder, …), it will be more difficult to exercise this action, since those hidden defects that could have been easily appreciated by this professional will be excluded. The term to exercise this action is very limited, since it is only SIX (6) months from the delivery of the property.
- Liability actions for fraud by the seller: in conjunction with the above, if it is proven that the seller was aware of the vices or defects of the new work transferred, the buyer, in the event of opting for the rescission of the contract, will also be entitled to claim compensation for damages.
- Action for construction defects: this is the action originally provided for in Article 1591 of the Civil Code and which was later included in Article 17 of the Building Law.
Thus, the aforementioned article 1591 of the Civil Code indicated that the contractor of a building that is ruined due to construction defects shall be liable for damages if the ruin takes place within ten years from the completion of construction, with the architect having the same liability if the ruin is due to a defect in the floor or management.
This regime, however, was quite limited and did not contemplate many of the situations suffered by the buyer, so that the legal regime of this action was completed with Article 17 of the Law of the Building Ordinance, so that the liability for defects was extended to individuals or legal entities involved in the building process (their liability must be individualized whenever possible), setting the following liability regime:
- For a period of ten years, to be computed from the date of acceptance of the work without reservations or from the correction of such reservations, they shall be liable for material damage caused to the building due to vices or defects affecting the foundations, supports, beams, slabs, load-bearing walls or other structural elements, and which directly compromise the mechanical resistance and stability of the building;
- For a period of three years, to be computed from the date of reception of the work without reservations or from the correction of such reservations, they shall be liable for material damage caused to the building due to vices or defects in the construction elements or installations that cause non-compliance with the legally established habitability requirements.
- In addition to the foregoing, the builder shall be liable for one year, to be calculated from the date of acceptance of the work without reservations or from the correction of such reservations, for material damages due to defects or faults of execution that affect elements of completion or finish of the works.
The aforementioned action must always be brought within a period of two years from the date on which the existence of the defect or defect is ascertained.
These liabilities must also be duly covered by the so-called “ten-year liability insurance”, the policyholder being the builder in the latter case (since only the builder is liable for the vices or defects of execution that affect elements of completion or finish of the works), and the developer in the remaining cases (it being possible for the developer to agree with the builder that the latter is the policyholder of the insurance on behalf of the former).
- Action for breach of contract: finally, the buyer will be entitled to bring an action for breach of contract against the seller who is contractually obliged to deliver a dwelling without deficiencies. This action will be subject to the general limitation period of five years.
- The action for special liability regime for damages caused by housing: this action, contained in the revised text of the law on consumers and users, contemplates a special liability for those who build or market housing, within the framework of a business activity, for damages caused by defects in the housing that are not covered by a specific legal regime. The aim is to cover those cases that are not covered by the aforementioned actions for the protection of those persons who are considered consumers and users, although with a limit to such liability of 3,005,060.52 euros.
Types of Hidden Defects
When we talk about hidden defects in a property, we refer to flaws that are not easily detectable during an initial inspection but can compromise its functionality, habitability, or value. These defects can be classified into different categories based on their origin and the impact they cause.
Structural Defects
Structural defects affect the fundamental elements of the construction, such as foundations, pillars, or walls. These types of flaws can compromise the stability and safety of the property, posing a risk to its occupants.
- Aluminosis: Although less common today, aluminosis can be a serious issue in older buildings. It refers to the deterioration of cement caused by moisture, leading to cracks, fissures, and water infiltration in the structure.
Functional Defects
This category includes flaws related to the property’s installations, such as electrical, plumbing, or HVAC systems, that do not function properly.
- Electrical Defects: Problems in outlets, malfunctioning circuits, or errors in the installation.
- Plumbing Issues: Faulty pipes causing leaks, blockages, or water infiltration.
Insulation Defects
Poor insulation can become a hidden defect that affects the property’s energy efficiency and comfort, including both thermal and acoustic issues.
- Thermal or Acoustic Insulation Deficiencies: Caused by improper application of insulation materials, leading to insufficient climate protection or ineffective soundproofing.
Aesthetic Defects
Although they do not directly impact the functionality or safety of the property, aesthetic flaws can reduce its value or lead to long-term problems.
- Finish Defects: Appearance of stains on paint, uneven flooring, or low-quality finishes that deteriorate quickly.
Dampness as a Hidden Defect
Dampness is one of the most common hidden defects and is often related to malfunctioning installations or defects in water pipes. This issue not only affects the habitability of the property but can also compromise its structure.
- Examples: Leaks due to defective pipes or inadequate insulation, leading to mold and deterioration of walls and ceilings.
Defects from Design or Construction
Technical errors in architectural design or the use of low-quality materials can result in serious problems, particularly in new constructions.
- Examples: Structural planning failures causing subsidence or cracks. Use of defective materials that wear out quickly under normal conditions.