Illegal Construction Works in Andalusia

Illegal Building Works in Andalusia

Geographical Referencing in Certificates of Antiquity

Geographical Identification in the Certificates of Antiquity for Buildings

Spanish Mortgage Law and the 03/11/2015 Resolution of the D.G.R.N.

On November 2015 the Spanish Law 13/2015, reforming the Mortgage Law came into force. The revised text states that when the construction of buildings of any kind is inscribed in the Property Registry, the portion of land occupied by the building must be identified by its referencing geographical coordinates.

03/11/2015 Resolution of D.G.R.N.

Also on November 2015, the General Directorate of  Registries and Notaries (D.G.R.N.) dedicated a Resolution to the interpretation of certain aspects covered in the reform of the Spanish Mortgage Law. It states that when the inscription of the geographic referencing coordinates that define the portion of land occupied by a building is required, the geographical boundaries and the list of geographical coordinates of the piece of land on which the building is located will also be required.

Geographical Referencing in Certificates of Antiquity

The reform of the Spanish Mortgage Law makes it convenient that Certificates of Antiquity for Buildings now include a section about geographic referencing, identifying:

• the piece of land where the building is located, unless its geographic boundaries have already been registered previously
• the portion of land occupied by the building.

Georeferenced Coordinates of the Cadastral Plot

If the simultaneous registration of the georeferenced coordinates of the cadastral plot is required, such coordinates can be obtained from a Descriptive and Graphic Cadastral Certification, which shall include them as an attachment. They can also be downloaded, in GML format, from the Cadastre website.

Georeferenced Coordinates of the Portion of Land Occupied by the Building

Normally, the architect assigned to draft the Certificate of Antiquity will have to identify the portion (or portions) of land occupied by the building subject to inscription in the Property Registry, for which he will need to develop an Alternative Graphical Georeferenced Representation. The content and the computer format for such representation have been established by resolutions of the D.G.R.N. and the General Directorate of Cadastre. The file format must be INSPIRE GML, and the information included should be similar to the one contained in the sample file provided by the Cadastre website, which can be downloaded via the following link: http://www.catastro.minhap.es/documentos/formatos_intercambio/BU%20ejemplo%20explicativo.zip.

Rules for the Valuation of Properties According ECO/805/2003 (VII)

Valuation Rules According ECO/805/2003 (VII)

General Warnings

According Spanish ECO/805/2003, we find a ‘warning case’ whenever we have doubts about any of the data used in the calculation of the technical values. At a minimum, we should consider the following cases:

• when there is a discrepancy between the physical reality of the property and its description in the Property Registry or the Cadastre, if such discrepancy does not lead to doubt about the identification and do not affect the calculated values
• when the property is not in accordance with the applicable urban planning, unless some conditioning have been stated or it was not possible to verify the system of protection of the architectural heritage
• when the valued property is subject to expropriation or was constructed on the basis of a license or an administrative authorization containing conditions, which if not met, may result in changes to the certified value
• when the valuation has been calculated using different methods than those stated in Spanish Order ECO/805/2003
• when the maximum legal value was calculated in absence of some of the required documents
• when the valuation was calculated in absence of the necessary documents to calculate cash flows
• in rural properties, when the valuation was calculated in absence of the cadastral documentation or the documents describing the operating system
• in the valuation of buildings under construction or rehabilitation for the finished building hypothesis, when the valuation was calculated in absence of a complete set of the Construction Documents already endorsed by the Architects’ Association, or the final certification of the performed work, or the Building Contract, or the Schedule of Construction Costs
• in buildings whose main use is housing, when the valuation was calculated in absence of the document attesting the expedition of the decennial insurance for property damage
• in buildings in horizontal property regime or building elements different than houses or garages, when the valuation was calculated in absence of the statutes of the homeowners, an equivalent document or a Certificate by the community manager, certifying the limitations of use or other circumstances able to affect the value
• when the Cadastral Reference does not exist or can not be known by the means provided in the revised text of the Law on Real Estate Cadastre, or through the Virtual Office of the Cadastre
• in properties located abroad, when the valuation was calculated in the absence of all the documentation that, in accordance with the rules applicable in the country where the property is located, may have some influence on the value of the property.

Rules for the Valuation of Properties According ECO/805/2003 (VI)

Valuation Rules According ECO/805/2003 (VI)

Documents Required for the Valuation of Properties

The calculation of the value requires to previously have all the documents necessary for the complete identification of the property. Among those documents, the following ones should always be included:

• the Registry Certificate attesting both title and charges associated with the property, or any legal equivalent in alternative media
• the Cadastral Document, with all descriptive and graphic information associated with the property, as obtained directly from the Electronic Site of the Cadastre (www1.sedecatastro.gob.es).

Both documents must have been issued within three months prior to the valuation date.

Documentation for Valuations in the Mortgage Market

In the valuation of properties intended to serve as mortgage warranty for loans that are or will be part of the portfolio of mortgage securities issued by institutions, developers and builders, the Registry Certificate can be replaced by any of the following documents:

• original or copy of a Registry Note (‘Nota Simple’, in Spanish), issued within three months prior to the valuation date, at least expressive of ownership, the complete description of the property, the real rights and the limitations of domain
• photocopy of the Registry Book of the property
• photocopy of the Title Deeds
• any document equivalent to the above ones, issued by the Property Registry by the use of telematic procedures.

Documentation for Valuations Outside the Mortgage Market

When the purpose of the valuation is the coverage of the technical provisions of insurance companies, the determination of the assets of the institutions of collective real estate investment, or the determination of the real estate assets owned by pension funds, the inclusion of the Cadastral Document will only be necessary in the following cases:

• prior valuations
• regular valuations of real estate in which changes have occurred that affect the description.

Documentation for the Valuation of Assets of Institutions of Collective Investment

If the purpose of the valuation is to determine the assets of the institutions of real estate collective investment, the Registry Certificate is only required in previous periodic valuations of the properties under construction; in other cases, the Registry Certificate may be replaced by any of the documents considered as valid in the mortgage market.

Rules for the Valuation of Properties According ECO/805/2003 (V)

Valuation Rules According ECO/805/2003 (V)

Statement of the Values. Checks. Land Area. Mortgage Value. Intermediate Valuation.

When valuing a Real Estate in Spain, the values should be stated in a report and, where appropriate, a Certificate of Valuation.

Minimum Checks

The valuation of a property requires to perform all necessary checks to know the characteristics and the actual condition. Among the checks that should be performed, the following ones should always be included:

• physical identification of the property, through its location and visual inspection, checking if its floor area and other characteristics match the description
• identifying all visible servitudes
• conservation status or condition
• occupancy status
• use or exploitation intended for the property
• public protection regime, if it’s about housing
• architectural heritage protection regime
• agreement of the property with all applicable urban planning regulations
• where applicable, availability of right to the valued urban use.

Land Area

In order to calculate the value of a land or a country estate, the area to consider should be checked by the appraiser. If this testing is not feasible, the appraiser should use the lowest value between the Registry Area and the Cadastral Area.

Definition of Mortgage Value (VH)

The Mortgage Value or VH (‘Valor Hipotecario’, in Spanish) is defined as the value of the property as determined by a prudent valuation, taking into account all market conditions, the use at the time of the valuation and any possible alternative uses.

Definition of Intermediate Valuation

The Intermediate Valuation of a construction work is any of the valuations that are issued after the initial valuation and during the construction or rehabilitation process of a building or an element of a building. The Intermediate Valuation reflects the progress of the works and the percentage of work performed, but its issue does not involve the updating of the values ​​contained in the initial valuation.

Time Planning in Feasibility Studies

The Time Schedule in the Feasibility Study

Time Frame Estimation for Real Estate Projects

The Work Program is a scheme that assigns each activity a start date and a completion date. Due to the scarcity of data that is usually inherent in the initial phase of the building project, it is usual that the time schedule is not very detailed, consisting rather in a preliminary plan that will have to be part of the Feasibility Study. The time schedule is performed through four interactive processes:

• definition of activities, which requires the breakdown of the tasks associated with each phase of the real estate project to a level which allows the estimation of the time frame
• arrangement of activities, establishing the sequence based on the dependence between them
• estimation of the time frames, which will depend on the magnitude of the resources used in the performance of each activity
• calculation of the program, usually by applying the Critical Path Method.

Estimation of Time Frames

The PERT (Program Evaluation and Review Technique) prescribes the estimation of three possible durations for each activity:

• the most probable duration
• the pessimistic duration, estimated by considering very unfavorable conditions
• the optimistic duration, estimated by considering very favorable conditions.

The use of these three estimates allows the calculation of a weighted average duration which is the one considered in the study.

Calculation of the Program

The Critical Path Method, commonly used in the timing of projects, consists of following, within the network of activities, all possible paths, adding durations and lags. Thus, it’s possible to estimate the earlier and the later date for the start and the completion of each activity and the entire project. The result of subtracting from the earliest dates the latest ones is called “clearance”. The "total clearance" is the time that an activity can be delayed without affecting the time frame of the project. The Critical Path is the one that provides zero clearance for all activities, so a delay in any of them involves an inevitable delay in the completion date of the project.