Licence of first occupation: a complete guide to a safe purchase of your new home

Did you know that, without the Licence of First Occupation (LPO), your new home could remain in legal limbo? This essential permit certifies that the construction complies with all urban planning and safety requirements, and is the key that allows you to register your home in your name.

In this article, the Quadratia team breaks down everything you need to know about the LPO: what it is, how to check it exists and why not to sign without it. With this information, you’ll guarantee the legality of your investment and sleep soundly knowing that your home is ready to move into.

Licence of first occupation: what is it and why is it important?

The licence of first occupation is the administrative document issued by the local councils that indicates that a property, once the work has been completed, complies with all the urban planning, technical and habitability requirements demanded by law. In other words, it is the official approval that certifies that a construction is fit for habitation.

This permit guarantees that the property has been built according to the project previously approved by the town hall and that it has passed the relevant inspections. It is also an essential document for registering supplies, i.e. water, electricity or gas.

For the buyer, it is an essential guarantee: this licence indicates that the property has no urban planning irregularities and that it complies with current regulations.

Buying a property without a licence can involve everything from legal problems to difficulties in obtaining mortgage financing.

Isabel Soriano, Sales and Marketing Office Coordinator at Quadratia

Moreover, in a context of relevant legislative changes in the real estate market (such as the recent elimination of the Golden Visa for real estate investments), it is more important than ever to ensure that each transaction complies with all legal and urban planning requirements.

Licence of first occupation vs. responsible declaration of first occupation

In most of the Autonomous Communities, for the sake of simplicity and administrative agility, the Licence of First Occupation has been replaced by the Responsible Declaration. In this case, it is the interested parties (the Developer, in the case of newly constructed dwellings) who, by providing all the documentation required by the corresponding Town Hall, are responsible for the veracity of the same.

This is without prejudice to the power of the municipal technicians to check, control or inspect compliance with the legally established requirements and the adequacy of what has been executed with the contents of the declaration.

Differences between the licence of first occupancy and the certificate of occupancy

They are often confused, but the licence of first occupation and the certificate of occupancy are not the same thing, although in some autonomous communities their functions overlap.

The first occupancy licence is linked to compliance with the urban planning conditions of the building project, while the certificate of habitability certifies that the property meets the minimum requirements to be considered habitable: ventilation, lighting, usable surface area, accessibility, etc.

In some regions, such as Catalonia or the Balearic Islands, the cédula de habitabilidad is compulsory even for older dwellings, while the LPO is only required for new construction or complete renovations.

Construction requiring a licence and how to verify its existence

Specifically, the licence of first occupation is compulsory in the following circumstances:

• Newly built dwellings.
• Fully refurbished dwellings.
• Change of use (e.g. from premises to dwelling).
• Buildings subject to relevant extension or modification, e.g. to make them more sustainable.

To check whether a property has this licence, it is sufficient to apply for it at the town hall that corresponds to the property. It can also be consulted at the Land Registry or requested directly from the seller or the seller’s legal representative. In many cases, this document is part of the technical dossier of the property.

Requirements and deadlines for applying for the licence of first occupancy

The application for the LPO is usually the responsibility of the developer, builder or homeowner, once the works have been completed. In general, the following documents are always required:

• Final construction certificate, with the signature of the architect and the quantity surveyor.
• Technical project approved by the city council.
• Installation supervision report.
• Proof of payment of administrative fees.

The deadlines for the resolution of the application depend on the location, although it is usual that it is resolved within 15 to 60 days.

Costs and key factors of the licence of first occupation

The cost of the LPO is not the same throughout Spain. Generally, it is calculated on the basis of a fee that can range from 150 euros to 600 euros, depending on the surface area of the property, its typology and the municipality in question.

Factors such as the following may influence the granting or refusal of a licence:

• Strict compliance with the approved project.
• The correct execution of electrical, sanitation, ventilation, etc. installations.
• The adaptation of the work to accessibility and energy efficiency regulations.

If any deficiencies are detected, the administration may require corrections before the licence is finally granted.

Isabel Soriano, Sales and Marketing Office Coordinator at Quadratia

Consequences of buying a house without a licence

Buying a property that does not have a licence of first occupation can have many disadvantages:

• Inability to contract basic supplies.
• Legal risks, especially if the building does not comply with planning regulations.
• Problems in mortgaging the property, as many banks require this licence as a prerequisite.
• Limitations on resale or rental.

In addition, the municipality could impose financial penalties or even order demolition in extreme cases of urban planning illegality.