Selling or mortgaging a home with irregular work

Terms used

• Declaración de obra nueva — The declaración de obra nueva is the deed that registers a new building, extension or reform in the land registry.
• Dolo — Dolo is fraud or deliberate deceit, such as knowingly hiding a defect from the buyer.
• Vicios ocultos — Vicios ocultos are hidden defects the buyer could not see, which can let them cancel the sale or cut the price.
• Tasación — The tasación is the valuation of the home by a valuation company, which the bank uses to decide how much to lend.

Key rules

• Registry protection: Only what is registered is protected, so an unregistered extension can be sold but carries a notary warning.
• Fraud: An 'as is' clause never protects you if you knowingly hid the work.
• Mortgages: Banks often lend less, lend only on the registered part, or refuse when the work is unregistered.
• Buyer's price: There is no fixed discount; it depends on how serious the work is and whether it can be legalised.

Can you sell it?

Yes. A home with an unregistered extension can legally be sold. The extension is sold as a physical fact, so the deed must describe it correctly. Whether you can register the work depends on its age and your region's rules.

What the notary will do

If you sell without registering the extension, the notary does not ask for the technical certificates. The notary does warn the buyer in the deed that the building does not match the registry or has no licence.

If you want to register the extension (declaración de obra nueva), the notary will ask for the documents. For old work, you must show it is old enough that the authorities can no longer order it restored to legal condition. Your region sets how many years the council has to order demolition or restore planning legality. The period varies widely between regions, and on protected land there may be no limit, so check your region's current planning law before relying on the age of the work. In the Valencian Community the limit for the council to act against unlicensed work is 15 years. The years count from full completion of the works or from when the building could be used.

What buyers will ask for

There is no fixed discount. The price cut depends on how serious the irregularity is, whether it can be legalised, what that costs and how long the work has stood. Old, minor work that is easy to legalise means a small reduction. Work that cannot be legalised, or risks fines or demolition, is priced as a much bigger problem, and some buyers walk away.

Expect one of three requests:

• Legalise first, then sell.
• Accept a lower price.
• Agree a retention, meaning money held back from the price until the problem is solved, or a legalisation clause.

Selling "as is"

You can sell "as is" (en el estado en que se encuentra). The deed then says the buyer knows and accepts the physical, planning and legal state of the home, including any gap with the registry or missing licence.

The clause has limits. It does not cover fraud (dolo) or deliberately hidden work. If the seller is a professional, mandatory consumer rules still apply.

Can the buyer come back to you?

Yes. The buyer's claim for hidden defects must come within six months. If you knew about the work and hid it, you can owe damages, or the buyer can seek to annul the sale. Demolition or restoration orders follow the property and its current owner; fines are personal to whoever did the work.

Mortgages

Banks lend only against the registered, valid property. If the real area differs from the registry, or the work has no licence, a bank may:

• lend less,
• lend only on the registered part,
• require the work to be registered first, or
• refuse.

The valuation company (tasación) records differences between the registry, the cadastre and the real measurements. Regional or smaller banks can be more flexible, and each bank's policy differs.

If you already have a mortgage

Your current mortgage stays in force. The bank does not act because of irregular work unless you breach the loan terms. If you refinance, switch banks or increase the loan, the new bank runs a new valuation and legal check, and may cut the amount, refuse, or ask you to register or legalise first. A buyer who takes over your mortgage also needs bank approval and the same checks.

Where to start

Ask the bank, before you list the home, whether it will lend on it. Then decide whether to legalise, cut the price or agree a retention.

If you are a non-resident seller, file modelo 210 within 3 months of the sale date; the non-resident return guide has the detail.

Documents you need

• Architect's certificate of the project, issued by an architect.
• Certificate that the work matches the licence, issued by a technician, and the licence or equivalent authorisation, issued by the council. Both are needed only if you register the extension.
• For old work, a certificate of age (antigüedad) showing the work is beyond the period for restoring legality, and that the land is not protected. Issued by a technician or the council, or shown by cadastral records.

Foreign documents: from a Hague Convention country they usually need an apostille, and from other countries legalisation through the Spanish consulate; some EU public documents are exempt, so ask the notary which apply.