Whilst property ownership in Spain is for the most part an enormously satisfying experience, it does at times present some challenges. Over the years, several cases of planning breaches, lack of 1st Occupancy Licence, breach of zoning etc, have appeared in both national and international press.
Fortunately, an insurance solution is now available to owners of properties who are experiencing these problems - Title Insurance. A title insurance policy is usually a 10-year policy which protects the owner by providing legal advice in defending any claim, fines and penalties from the Town Hall, any possible demolition and reconstruction costs, as well as any loss in the value of your property if you are forced to demolish the illegal works.
It is possible to arrange cover which insures against problems or concerns with legal ownership or the use of real estate or inherited assets. This covers specific problems identified by lawyers or advisors, and provides peace of mind if you are in unfamiliar territory. It provides warranties that aren't available, or insurance to replace warranties that can't be relied on.
Legal indemnity and title insurance can insure property risks, such as restrictive covenants, lack of 1st Occupancy Licence, access issues, zoning or planning violations. Executor & inheritance protections can insure against problems with inherited assets including a missing will or beneficiary, a challenge to the validity of a will, or claims under the Inheritance Act.
As many expatriate homeowners have found to their cost, no matter how thorough the due diligence is, some properties have associated hidden defects, which could in the future lead to administrative sanctions by the Town Hall, lawsuits, loss of value, and even demolition orders.
Title insurance protects the owner by offering legal defence and support, and expenses cover for fines and penalties. It also covers demolition costs and even provides compensation for any loss of value suffered by the property as a result of the Town Hall taking action against you.
Title insurance can be bought on a specific risk basis, ie lack of 1st Occupancy Licence or an all-risks basis. Policies usually run for 10 years and can be renewed going forward.