The Law 38/1999 of 5th November 1999, which came into force in 2000, tried to bring "some order" to the Spanish construction industry, and amongst other things established a compulsory decennial guarantee insurance Policy be taken out by the developer, for the benefit of the subsequent buyer. This statutory requirement is only in respect of residential property, and does NOT apply to individual homes built for own use. It is worth noting that if constructing for own use, it is still advantageous to purchase the decennial guarantee cover as should you wish to sell the property within 10 years, your Buyer, his lawyer, or the land registrar is certain to insist on the insurance being in place.
The policy is designed to cover the costs associated with a claim which having its origin in the construction period compromises the stability of the structure within a 10 year period from completion of the construction.
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