Decree 218/2005 - How to comply with Decreto 218

A fine of €1,000 for not displaying a Decreto 218 Notice in a visible location in the office…an €800 fine for not providing Spanish-language descriptions for properties in the window display…and a €2,800 fine for being unable to present the necessary information on a randomly-chosen property…Adam Gale, Managing Director of Duchy Estates, is now painfully aware of just how serious the new Decreto 218 Law is being taken.

“We received a visit from the Junta (Council Officials) in November 2007 and, without warning, were fined for not complying with the Decreto 218,” says Adam, whose company was one of the first to be visited as part of the council’s crackdown on compliance of the new law. “After we were fined, we received no help or guidance from the council about what the law was, so we had to conduct our own research into it and find out how best to abide by it.”

The Decreto 218/2005 was passed in 2005 and became law in late 2006. However, it has only been very recently that the Junta de Andalucia has started to check that real estate professionals are complying with these new regulations. “Most agents and consumers we speak to are absolutely unaware of the law,” continues Adam. “And there’s virtually nobody who understands it fully – the official website has the full law in Spanish only, and even that is rather confusing. Hence the reason why there is such a clamour for information about it.”

Duchy Estates’ experience has been echoed by Engel & Volkers, who themselves have also received a visit from the Junta and the subsequent fine for non-compliance. So how can you be sure, as a real estate professional or a consumer, that this new law is being followed to the letter?
First things first – every office that is in the business of selling property in Andalucia (whether the actual property is in Andalucia or the contracts are signed in Andalucia) must display a Decreto 218 Notice (download Decreto 218 Notice Example), or face a fine.

Next, every property that the real estate agent or developer has listed for sale or rent – either on a website or in a shop window – must display the property description in Spanish (other languages can also be displayed, but Spanish MUST be displayed) or face a fine.

Thirdly, every property listed for sale or rent must have accompanying it a Documento Informativo Abreviado (or DIA for short – download DIA example) or, again, face a fine. This document must be provided free, and in printed format, to every individual that views a property, listing the following key details:

- Basura Tax (Rubbish tax).
- Nota Simple (Information about the property and any debts outstanding on it)
- Catastral Value of the property (used to calculate the IBI receipt value)
- IBI Receipt (The rateable value of the property according to the town hall)
- First Occupancy Licence
- Community Fees
- Details on the community

In addition, developers must ensure that they provide agents and consumers with floorplans on a scale of 1:100, instead of the normal 1:1000. Adam foresees numerous problems with these new regulations. “It is an incredibly time-consuming practise to translate every property description on our books into Spanish, as is gathering together all of the relevant paperwork, IBI bills, community fee info, etc…”

“However,” he states, “Developers and agents that deal in new build properties have an even more difficult task. Printing 1:100 floor plans will result in greater printing costs [A3 will no doubt be required in abundance], simply adding to the difficulty in what is – as we all know – a tight market at the moment.”

Adam’s colleague at Duchy Estates, Daniel Lloyd, does, however, see some benefits for Costa del Sol’s real estate industry in the long run. “If consumers in the UK, for example, became more aware of these new practises and regulations,” he says, “then the public’s perception of the property market here on the Costa del Sol could change for the better.” Not only will the market be more professional and transparent for the home buyer, but any real estate professional that fails, or is unwilling, to comply with the Decreto 218 will surely not be around for too long, ensuring a greater share of the spoils for those real estate professionals that do comply.

Ignorance is most certainly not a valid excuse. All real estate professionals need to be able to adapt and adopt, otherwise they will face the consequences. “The market is tight at the moment,” concludes Adam. “So this additional expense – both in terms of time and money – is not what most agents need.” However, if this extra care and attention to each property leads to greater consumer confidence, then everyone – buyers, seller, agents and developers - is a definite winner.