RESPONSIBILITIES OF THE PARTIES INVOLVED IN A CONSTRUCTION PROJECT 

When, as attorneys, we are faced with a claim for defects or flaws in the construction of a project, the first thing we must consider is the date the construction permit was granted.

 

Our article is being covered by *Diario Hércules*. 

When faced with a claim for defects or flaws in construction, the first consideration for attorneys is the date on which the construction permit was granted.

In this respect, Article 1591 of the Civil Code (hereinafter "CC") applies when the construction license was issued before the entry into force of Law 38/1999, of November 5, on Building Regulation (hereinafter "LOE"). Conversely, "ad sensu contrario," Article 17 of the LOE applies when the construction license is dated after the LOE took effect.

This interpretation is supported unanimously by case law, as evidenced by the Supreme Court (Civil Chamber, First Section) in Judgment No. 554/2013 of October 4 (RJ\2013\7054), which states:

"3. The recent jurisprudence of this Chamber has addressed interpretative criteria concerning the potential retroactive application of the LOE in construction works and processes governed by Article 1591 of the Civil Code, as exemplified in SSTS of March 22, 2010 (No. 195/2010 (RJ 2010, 2410)) and April 19, 2012 (No. 238/2012 (RJ 2012, 5908)).

In this regard, as per the judgments cited, it should be noted that the Building Regulation Law 38/1.999 of November 5, published in the B.O.E. on November 6, 1999, is applicable to new construction works and works on existing buildings for which projects required an appropriate construction license starting from the law’s entry into force six months later, as stipulated in the First Transitional Provision.”

In the same vein, Judgment No. 1633/2021 of December 14, issued by the Third Section of the Provincial Court of Navarra, JUR\2022\50251, states:

On the other hand, specific legal liability also applies to professionals involved in the construction process, due to their professional status, for resulting flaws and defects in the project.

This legal liability was originally covered in Article 1591 of the CC and further elaborated upon by extensive jurisprudence from the Supreme Court, interpreting this provision to recognize a concurrent legal liability under Article 1591 for damages stemming from what is termed "functional ruin" in construction, establishing a statutory guarantee period of ten years.

Subsequently, Law 38/1999 of November 5 (RCL 1999, 2799), the Building Regulation Law, was enacted to provide a specialized framework covering the legal regulations of the building process. This law regulates the professional liability of various agents involved in construction (with specific definitions of their competencies and functions) for structural, habitability, and finishing defects, each with specific warranty periods (ten, three, and one year, respectively) and a two-year limitation period for filing claims. The LOE’s First Transitional Provision specifies that it applies "to new construction and works on existing buildings for which a construction license is requested after its entry into force."

According to jurisprudence, the LOE is exclusive and incompatible with Article 1591 of the CC, so the LOE applies to new construction projects for which the license was obtained after it came into effect.

Once the applicable legal framework is determined, it is essential to review the limitation periods for actions and the warranty periods for the construction, which, as we will see, are distinct and must not be confused.

Thus, if the license was issued after the LOE’s effective date, Article 17 of the LOE, which governs the civil liability of parties involved in construction, states:

Without prejudice to their contractual responsibilities, individuals or entities involved in construction are liable to property owners and third-party buyers of buildings or parts thereof (if subdivided) for the following material damages occurring within the indicated periods, counted from the date of work acceptance without reservations or from the date of resolution of any reservations:

a) Ten years for structural damage to foundations, supports, beams, slabs, load-bearing walls, or other structural elements that directly compromise the mechanical strength and stability of the building.
b) Three years for damage due to construction defects or faulty installations affecting habitability as defined in Article 3, paragraph 1(c).

The builder is also liable for material damage due to defects in workmanship affecting finishing elements within a one-year period.

It should be noted that these periods are not limitation or expiry periods for legal actions but rather warranty periods, i.e., periods during which the construction agents (developer, technical director, or builder) are liable if construction defects manifest within the stated periods.

Regarding the distinction between warranty periods and limitation periods, it is worth referencing the Supreme Court (Civil Chamber, First Section) Judgment No. 166/2020 of March 11, RJ\2020\881, which declared:

"2.- The challenged judgment appears to conflate warranty and prescription, which are legally distinct concepts (STS 517/2010 of July 19 (RJ 2010, 6559)):

"Warranty is the period provided by law to protect buyers of homes and premises from construction defects over a defined period—ten years. The term does not constitute prescription or expiry but warranty, as repeated jurisprudence has stated, so that for a legal liability action to arise, the defects or flaws must manifest within this period, starting from the date of work acceptance without reservations or from the resolution of any reservations (Art. 6.5 and 17.1).”

Prescription, however, pertains to a time limit that grants claimants the right to exercise corresponding actions.

Therefore, the liability periods in Article 17 of the LOE are warranty periods. That is, defects or flaws in construction must manifest within these periods, counted from work acceptance.

However, the limitation period for filing claims for such defects or flaws is found in Article 18 of the LOE, which states:

"Actions to demand liability as stipulated in the previous article for material damages due to defects will prescribe two years from the date these damages occur, without prejudice to other actions that may remain available to demand liability for contractual breaches."

There is substantial jurisprudence confirming that the limitation period for actions against builders, developers, and technical directors is two years from the occurrence of construction-related damage.

Judgment No. 1633/2021 of December 14, issued by the Third Section of the Provincial Court of Navarra, JUR\2022\50251, further elaborates:

"Article 17 of the LOE establishes the regime of responsibilities and warranties of agents in the construction process, detailing three different types of warranties for which these agents are liable: ten years for structural defects compromising stability; three years for defects affecting habitability; and one year for workmanship defects affecting finishing elements. These warranty periods begin 'from the date of work acceptance without reservations or from the resolution of any reservations.'

Separate from these ten, three, and one-year warranty periods is the limitation period for filing claims, as outlined in Article 18.1 of the LOE, which states, "actions to demand liability... prescribe two years from the date the damage occurs.” Defects must manifest within the warranty periods in Article 17 and, if so, must be claimed within two years (Article 18) from when the damage occurs.

In the present case, the work was completed in September 2011. The complaint states that "shortly after the construction of the property," defects and flaws emerged that underpin the claim. However, there is no documentation on the defect’s manifestation or any corrective action (which could serve as an act interrupting prescription) until the complaint was filed in May 2017."

Judgment No. 1211/2023 of July 25 by the First Section of the Civil Chamber of the Supreme Court, RJ\2023\5059, further clarifies:

As we noted in Judgment 13/2020 of January 15 (RJ 2020, 654):

"The coordination of both provisions requires that material damage occur within the warranty period, and once it manifests within this period, the action must be exercised within two years."

Therefore:

1.-) Article 17 of the LOE establishes the warranty period for construction defects or flaws.
2.-) Article 18 of the LOE establishes the limitation period for claims, which is two years from the occurrence of said damages.

For the developer, the contractual liability derived from the contract for works or services also applies, which typically has a longer limitation period.

SUMMONS ABOGADOS specializes in claims for construction damages or defects, and we are here to help with any questions or clarifications.