The dream of owning your own home in Ibiza can quickly turn into a nightmare if serious defects come to light after the purchase. Spanish property law offers protection to buyers, but it makes a distinction between second-hand properties and new builds. It also sets very short deadlines that are not clearly communicated to the buyers. If you want to protect your rights as a buyer, you need to be fully aware of the following rules.

When purchasing an existing property from a private seller in Spain, warranties are governed by the Spanish Civil Code (Código Civil), in Articles 1484 et seq..

The seller is liable for hidden defects (vicios ocultos) that existed at the time of purchase.

- The defect is not visible.

- It significantly impairs the use of the property, or would have resulted in the buyer not purchasing the property, or only purchasing it at a significantly lower price.

- Important: The seller is liable even if he was unaware of the defect (Art. 1485 CC), unless liability was excluded by contract and the seller was acting in good faith.

- Exclusion: The seller shall not be liable for obvious defects.

The period for asserting these warranty claims for hidden defects is only 6 months from the date of taking possession of the property. (Art. 1490 Código Civil).

Caution: The six months are a limitation period (or expiry period, known as caducidad in Spanish). Simply reporting the defect to the seller does not interrupt the limitation period. In order to preserve the claim, legal action must be taken within this short period if no out-of-court settlement can be reached.

When purchasing a new build from a developer (promoter) or construction company, the Building Regulations Act (Ley de Ordenación de la Edificación – LOE) applies. This law offers significantly more comprehensive protection, as it places obligations on those involved in the construction process (developers, architects, contractors, etc.).

Liability is staggered over three periods and begins with the acceptance of the work (‘recepción de la obra’). The actual limitation period for the judicial enforcement of claims under the LOE is generally two years from the date on which the defect was discovered. This period runs parallel to the respective warranty period.

Coverage: Defects relating to workmanship or completion, such as loose tiles, paintwork, carpentry, scratches on windows.

Coverage: Defects that affect the habitability of the property. The developer and other subcontractors involved are liable for damp, mould, inadequate insulation, installation problems, etc.

Coverage: Structural damage, such as cracks in foundations, load-bearing walls or beams that jeopardise the stability of the building.

Spanish law requires property developers and builders to take out this ‘ten-year insurance’ (‘seguro decenal’). This policy guarantees that the buyer is financially protected in the event of serious structural defects and can make a claim directly with the insurance company.

If, on the other hand, the owner of the land directly commissions a building contractor to construct the house, he becomes the ‘developer’ (‘promotor’) of the project (known as ‘autopromoción’). In these cases, taking out ten-year insurance is voluntary (not compulsory). If they later decide to sell the house within the 10-year period, they must inform the buyer in writing that no such insurance has been taken out. The buyer must expressly accept this condition as part of the purchase agreement.

If a defect is discovered after purchase, communication with the seller or developer must be immediate and verifiable (preferably by ‘Burofax’) in order to avoid missing deadlines. The letter should state the defect, the suspected cause, the estimated repair costs and request that the seller take responsibility.

If the seller refuses to do so, the buyer should take legal action. However, an out-of-court settlement is usually the most effective solution, unless the defect is serious or structural.

Given the short deadlines and complex legal situation, subsequent claims for defects in Spain are often a lengthy and risky process. The best strategy remains prevention before purchasing the property. Buying property in Ibiza requires a high degree of due diligence. Without the early involvement of a solicitor specialising in Spanish property law, buyers risk losing their claims irretrievably.