Ibiza Property Development: Self Build Property in Ibiza

You want to build or repair on your home in Ibiza? Not always so easy. It is better to be informed before starting.

You want to build your dream house in Ibiza? Good idea, many of us have done so, and are very happy where we live. But some of us have also had some negative experiences in the process, and would like to pass on these experiences to new buyers.

Some builders offer you a double contract: you buy a plot of land from them and agree in the same document that he shall build the house on the land bought. This is not always fair. In most cases it is better for the buyer to reserve the possibility of getting price offers from several builders.

Furthermore, certain builders often propose in their contracts that the buyer shall only get the title to the property when all money has been paid, meaning both for plot and construction. This can be dangerous, because you would not have good legal protection for the money you have paid out if the builder goes broke during the construction period.

We recommend: Do not accept, unless in special cases, double contracts. Insist on separate contracts, where you get the title to the land at the moment of paying for it, at the notary's office. When you have the title to the land, you can make a building contract with the builder you prefer, and you will be the owner of any immovable object on your plot in case the constructor cannot finish. This will enable you to contract another builder to finish the works, if need be.

Moreover, if the plot belongs to the builder, he sometimes will use this fact to pressure you for extra payments for the construction at the end, and not give you title (or the "certificado de fin de obra") until you pay.

Finding the architect and the builder

To find a good architect (and it need not be the one you asked to make the "anteproyecto" if you are not satisfied with him) is as important as to find a good builder. You can find the names of architects and builders in the yellow pages phone books, but we shall mention some other ways of doing it:

• go to the local bar and ask if anyone knows a good and trustworthy builder in the area. Discard the recommendations given by persons whom you think are "commission-hunters" and also the negative comments based on details like a delay of some weeks.
  

• drive around in the area and stop by well designed and built houses. If you compliment the owner on his house, he will feel more flattered than bothered, and tell you his experiences, prices paid and the name and address of architect and builder.
  

• When you have a list of builders, and the final architects plans ready, you give them to the builders and ask for a "presupuesto", a price offer/quote, based on the plans and the building qualities mentioned. Once you have different building prices, you can compare. But you should not automatically select the cheapest offer. It is important to take into consideration the quality, good workmanship, and reputation for finishing on time.
  

• Some builders will have their own architect, and some architects will propose "their" builder. This is not always a good combination, since the architects task during the building period is to ensure on your behalf that the builder works according to plans and specifications.

What about the middlemen?

If your total investment in plot and house will be above 150.000 Euro, it is worth taking the time to safeguard the investment. Some builders and architects will speak foreign languages and there are translators that can assist you everywhere. Some middlemen, without any other qualifications than appearing to be "nice and knowledgeable" will be happy to contract with you, and then farm the contract out to the real builders. It may cost you a lot of money, or you may end up getting a low-quality house because the middleman squeezed the builder down too much on prices, to increase his own profit.

What if the sales organisation in your own country offers to contract with you for the building of your house through their local builder in Ibiza? If the sales organisation has been in business for a long time, with many satisfied clients, with good builders in Ibiza and someone on location controlling the builders, this may be the best combination.

Even then, do not sign any documents or powers of attorney without knowing exactly the content of it. Some of the powers of attorney routinely presented to the clients by some builders are so wide (poderes generales) that the builder can do anything he likes in your name.

Another point: if there are defects in the construction, the middleman you made the contract with may be gone, or may say: "look, I only contracted for you, go see the builder!" Then the builder may answer: "I have not built any house for you!"

From March 2000 a new law has gone into effect, that obliges all promoters to take out an insurance policy against any structural defects in the building for 10 years. This insurance will only apply to new construction from that time. Make sure it is mentioned in any contracts

Building plans, architect and aparejador

When you have the plot and architect, you must discuss in detail the plans with him. Also, be aware that today an architect from another EC-country may set up office in Ibiza, moreover that from the end of 1992 there are no obligatory minimum tariffs for architect work in Ibiza.

So expect him to discuss all details:

• the siting of the house on the plot (he should visit the place with you and point out the extremes of the building),
  

• what will be the exact level (and view) from your living room or terrace,
  

• how to protect the house against the heat from the sun in the summer, and get as much sun into the house as possible in the winter,
  

• how to protect the open terraces from the prevailing winds,
  

• how much space you and your family will need, not only today, but in years to come,
  

• avoiding steep and narrow stairs if you are sick or elderly,
  

• finding the ways of protecting the foundations and walls against rainflow on that particular plot,
  

• taking into consideration protection against existing or future sources of noise (roads, public pool, bar),
  

• how costly extra foundations and retention walls can be avoided,
  

• the possibility of using solar-heating, catchment of rainwater and recycling of grey-water,
  

• how to build the fire-place so that it is decorative, but also functions properly,
  

• how the airflow will be in the house in summer and in winter,
  

• if it is necessary to have an extra water tank on or under the roof,
  and make sure to have sufficient storage room and cupboards.
  

Do not forget: the greatest problem in most Spanish houses is the insulation. You must insulate against humidity: around the foundations, especially where the natural water flow comes, against water being sucked up from the foundations or trapped between them under the floor, through the roof or around windows and doors. Terraces must lead the water away from the house, not into it. Have enough roof overhang so that windows and doors are protected. Look especially into the good insulation of any roof terraces or staircases built into exterior walls.

You must also insulate against extreme heat in the summer and against cold in the winter. During the winter you will be happy to have double exterior walls, with an extra insulation between the two layers, and same kind of insulation in floors; exterior doors with a proper threshold and insulating frame; as well as thermopane windows set in solid frames.

The building description

The building description (memoria de calidades) must form an integral part of the architect plan, the plan and description must be included in and form part of the contract with the builder.

With the intention that you shall be able to discuss the materials to be used in the house both with the architect and builder, the Foundation Instituto has translated basic building descriptions from Spanish to other languages, which you can ask for as a member of the Foundation.

The building contract

You have the plot, the plans, the architect and the builder. Now comes the important document called the building contract. Often foreigners sign a flimsy building contract that puts them in an impossible situation where the builder has all rights and the client none. But this is such an important document you should have a lawyer draw it up or make changes in the proposed contract of the builder, to protect your interests.

First, the name and address of the builder (not only the middleman) must be on the contract, together with his NIF-number and signature, so you know exactly who you are dealing with, also needed later if defects appear. If the builder is a company, where and when it was registered must be mentioned, the CIF-number and the power of attorney given by the company to the person signing on its behalf.

It must then be stated that the construction shall be made on the basis of the plans drawn up by architect so and so, the plans and the "memoria" of the building qualities must be signed and form part of the contract. It must be specified what is included in the total price and what is not.

The builder must give a date for termination. Do not push him too much on this; to do good work, he needs time. But often it is convenient to indicate a date to start the work in addition to the termination of it. If the builder does not terminate at the date stipulated, it should be agreed that he pays a certain sum per day over time, equivalent to your costs of corresponding lodging.

Not to forget

Clarify also, who is going to apply for the building license and any other necessary permits, mention that the license, the Boletin de Instalaciones Eléctricas (the certificate from the electrician that the installations have been properly made) and the architects certificate for the finishing of the work according to the plans, shall all be handed over to you on the last payment.

It is normal to pay up front a certain percentage of the total building price, so the builder can buy the materials. But this should never be more than 30% (remember that the builder will have a credit line with the suppliers of the building materials and pays the salaries at the end of the month, so he will hardly have any costs for the first month). The rest of the payments should not be fixed to certain dates, but to termination of the various stages of the construction, like termination of foundations, roofing, exterior finishing and handing over of keys. The money stipulated for each phase should be paid against certificate from the architect! Either you must have the money ready in an account in Ibiza for payment, or you must calculate sufficient time for transfer from abroad (that still may take a long time). The builder should have the right to charge you interest on any instalment paid too late.

We recommend to retain 5-10% of the total building price for some months after termination, as a security for the repair of any defects you find. When you get the keys, meaning taking over the house, you should not sign any documents where you cancel any rights to have the defects you find repaired.

The "presupuesto" from the builder will have a VAT of 7% added to it. It must be specifically mentioned, otherwise with the law in hand, you can interpret that it was included in the total price given. The VAT should be added to each instalment paid to the builder and he should transfer it to the tax office. Fees for the architect and the aparejador (technical engineer) are separate from the builders price. Be aware that if you have a pool and garage as part and package of the contract for the construction of the dwelling, you only pay 7% VAT, but if at a later point in time you order these additions, the VAT will be 16%

What will it cost?

It depends in which part of Ibiza you want to build and on the construction quality you go for, if the terrain is difficult, whether you have any middlemen involved and if you are a good negotiator.

Below are the prices for the construction of an economical house (chalet sencillo). The prices are for the third quarter of 2004, and for the area of Cataluña, which is a rather expensive area. On the Costa Blanca, builders are still advertising construction from 600 Euro per m2 built (without stipulating the qualities in their ad). But at least these figures should be an assistance to you: (all figures in Euro)

You must not forget to add the VAT of 7% on the construction and study carefully the building description, since the description of the house we have used as a basis here, may not meet your requirements.

The paper war

One of the most important building materials in Ibiza is paper! The papers you need to worry about when building a house, or have someone worry about, are the following:

• "Informe urbanístico" from the town hall telling you what you can build on a certain plot, before you purchase it.
  

• Statutes of the Community of Owners if the plot is situated on an urbanisation.
  

• "Nota simple" from the property register telling who is really the owner of the plot and if it is free from charges.
  

• "Escritura de compra-venta" for the official purchase, signed at the notary's office and registered in the property register.
  

• Building licence from the town hall.
  

• "Boletin de instalaciones eléctricas" from the electrician wiring the house.
  

• "Certificado de fin de obra" from the architect when work is finished.
  

• "Cédula de habitabilidad" from the town hall or regional government declaring that the house is fit to live in.
  

• "Declaración de obra nueva" in the form of a notarial escritura, whereby you inscribe the house on your plot.
  

You may leave to others the task to get these papers, but remember you are responsible. It is better that you get the originals at once and keep them under lock and key.