Does a Costa del Sol property need an LPO? We explain why the answer isn't always straightforward, particularly with older properties, and why getting the right legal advice is more important than simply looking for a yes or no answer.
What is an LPO and why do I need one?
If you're buying a property on the Costa del Sol, sooner or later, somebody is probably going to mention the Licence of First Occupation (Licencia de Primera Ocupación), normally referred to as the LPO.
The LPO is a municipal document which confirms that a completed property complies with the relevant conditions for occupation. With a modern property, you would normally expect the appropriate documentation to be in place, although with an older property, the situation can be quite different.
The LPO system was introduced progressively across the different municipalities during the 1970s and 1980s. As a result, there are many properties built during those years, and particularly before then, that don't have an LPO simply because LPOs were not commonplace at the time. With reference to older properties, I sometimes make the deliberately extreme point that the Alhambra in Granada doesn't have an LPO. Obviously, we are not comparing the average house with the Alhambra, but the point is simply that you can't expect a property to have a document that wasn't part of the system when it was built. So, if somebody tells you that an old property doesn't have an LPO, don't immediately assume there is a problem. Just ask why.
Don't let yourself become too confused. You don't need to understand Spanish planning law inside out in order to buy a property. That is one of the reasons you use a good independent lawyer. Your lawyer will check the legal and planning position of the property, explain anything you need to know and make sure you understand what you're buying before you commit to it.
Why is there no LPO?
This is the important question and is fundamental to understanding the status of the property you are thinking of buying. As we said before, an older property may never have had an LPO purely because of when it was built. A more recent property may not have one for completely different reasons, and those reasons do need to be understood.
Marbella, for example, adds another layer to the question because of the well-documented planning problems that affected the municipality during the 2000s. Some properties from that period have documentation histories that need to be understood in the context of what was happening at the time. In more recent years, the position has become much clearer, but when dealing with older Marbella properties, the answer to "Does it have an LPO?" isn't as straightforward as yes or no.
A point worth considering is that there may also be other documentation, such as the SAFO or AFO, which can give you peace of mind regarding the present legal status of certain properties. Don't worry. You don't need to become an expert on Marbella planning history. That is what your lawyer is there for.
Does it really matter to you?
Once you understand why a property doesn't have an LPO, the next question is: what does that mean for you? Your own circumstances will help determine whether the absence of an LPO is a good reason for you not to buy a particular property or whether it will make little practical difference.
For example, if you need a mortgage, the documentation available for the property may affect whether a lender is prepared to finance it. A cash buyer may have more options, although that certainly does not mean they should ignore the legal or planning position.
There may also be implications depending on what you intend to do with the property in the future.
This is why a simple tick or cross alongside LPO doesn't necessarily give you enough information to make a sensible decision when considering one of the properties for sale on the Costa del Sol.
Get the right advice
We will always try to find out as much pertinent information as reasonably possible before anybody buys a property. Having said that, we are estate agents rather than the buyer's lawyers, and for most people, buying a property involves a substantial amount of money. For this reason, we believe that every buyer should use a good independent lawyer to carry out the appropriate due diligence before becoming committed to the purchase.
It is also important to use a lawyer who has experience of the situation you are asking them to advise you about. Sometimes that knowledge can be very local. A lawyer who regularly deals with a particular type of planning situation in Marbella will understand its history and implications better than an equally competent lawyer who has never encountered it before. As with all things property-related, you are not looking for somebody who will tell you what you want to hear. You want somebody who understands the situation well enough to give you the best advice.
If the lawyer investigates the property and advises you not to buy it, take that advice seriously. Equally, don't necessarily reject a property simply because somebody has told you it doesn't have an LPO without first finding out the background information. The safest advice can sometimes simply be not to buy, but that doesn't necessarily mean it is the right advice for you. What you need is somebody who understands the situation well enough to explain the implications so that you can make an informed decision.
Safeguard your position when you reserve
You may want to reserve the property and not risk losing it while a particular question is being checked. If an issue has already arisen, you can make sure it isn't forgotten.
Our standard reservation agreement provides for the reservation to be conditional on a satisfactory result from the legal due diligence carried out by the buyer or the buyer's lawyer. If you have a particular concern, that point can be specifically covered as a special condition in the reservation. For example, if there's a question about the legal or planning status of the property, the reservation can be made specifically subject to the buyer's lawyer being satisfied with that position. The lawyer can then investigate it properly and advise. If you're happy with what the lawyer finds, you can proceed. If you're not, you don't.
Put the LPO into perspective. An LPO is an important document, but it isn't the holy grail of Spanish property documentation. Having one doesn't necessarily tell you everything about a property, and not having one doesn't automatically mean you shouldn't buy. The important thing is to understand the legal status of the property and what that means for you.
As we've said, you don't need to become an expert yourself. Ask the questions and get the information from people who understand the situation. Have it independently checked by your lawyers and listen to their advice. You can then make your decision.
Does this property have an LPO? It is a good question to ask, but a yes or no answer does not necessarily define whether or not you should buy.
We will always try to help with any queries that you might have in relation to buying or selling a Costa del Sol property. If there is anything that you would like to talk through, please call us on (0034) 952 90 52 00, WhatsApp us, or email info@michael-moon.com. We look forward to hearing from you.
