The Importance of Having LPO (First Occupancy License)

Any owner of a Spanish property may want to let it. A new holiday property rental law was introduced in February 2016, but due to lack of clarity in the document Junta de Andalucía released an additional document (Instrucción 1/2016) in November 2016. The main important requirement is the “tourist” registration of property for which you need to have an LPO. What does this mysterious word mean and why is it so important?

Any owner of a Spanish property may want to let it. A new holiday property rental law was introduced in February 2016, but due to lack of clarity in the document Junta de Andalucía released an additional document (Instrucción 1/2016) in November 2016.

LPO (Licencia de Primera Ocupación; First Occupancy License) is the technical expression of the completed project verification, issued by Town Hall which is granted once the building works have been completed, and allows purchasers to dwell in. It affects the first use or occupation of a building.

It’s always the responsibility of the promoters of residential or commercial property. They request it presenting the construction completion certificate signed by the corresponding architect and building engineer. You should request a copy of valid LPO before signing a purchase house contract at the notary in the case of being the first occupant!

In Andalusia, it must be provided in order to legally have access to the official utilities (gas, water, electricity, telecommunications, etc.) for the first time. But not only! As mentioned, you also need it if you want to let your home on a short-term basis. It is important for the mortgage matters. In the case of purchasing house with a mortgage loan, banks ask for this document to study the concession of the mortgage. You won’t be able to take out a mortgage on the property or remortgage it (if needed be) by any bank other than the developer’s.

Since 1979, the law requires all property developers to register LPO with local Town Halls. If your property was built after 80s, your Town Hall has a copy of LPO for your property which can be obtained there in person/by an authorized person. Keep in mind that this license expires after 10 years so it must be renewed.

“… banks ask for this document to study the concession of the mortgage.”

If your property was built before 80s then obtaining LPO might be a little more complicated. The administration may not have a copy of LPO for your property. But you still need it, therefore contact your local Town Hall in any case. Every Town Hall can choose a different procedure to request an LPO. You may need to submit some additional documents (architectural plan signed by an architect or building engineer; cadastral reference, copy of water and electricity agreements/invoices, etc).

N.B. Completion on a property without LPO is legal in Spain and it will be lodged under your name at the land registry. However, it is not legal to occupy/live in it without the mandatory LPO. So basically, you legally own a new dwelling which is uninhabitable until the LPO is granted after Town Hall’s chartered technicians certify that “the dwelling complies fully with Health, Security, Planning and Construction Laws and is deemed as apt for human habitation”.

Drumelia Real Estate has been in contact with several Town Halls on Costa del Sol, with the intention of getting information regarding particular procedure to obtain LPO. Our specialists will be happy to help you or, if necessary to recommend a lawyer with excellent experience in Spanish property law to ensure your interests are fully protected.

31/08/2018