Decree 218/2005 - How to comply with Decreto 218

With our new “Questions & Answers…” section, the community at Comply218.com is getting involved more than ever. With Miguel Lameiro’s experience and knowledge in Spanish laws, people are feeling comfortable about asking us their doubts fearless, knowing that there are experts that are going to help them without trying to confuse or get a benefit from.

This is an excerpt from the section, a very discussed topic…

QUESTION

nick alderton Says:

We use Infocasa and share with a number of agents. Some of the agents properties are shown on our website; I have taken these off now. Can you confirm if we can advertise shared properties without directly listing them or have a DIA.

Also can you confirm if you need both the DIA and New build information sheet for off plan properties sold overseas; ie Dubai and Morocco.

Many thanks
Nick

—

ANSWER

Dear Nick,

As an intermediary (real estate agent) who is a professional charging for services, it is required to have all relevant information and documentation, whether the home is listed directly by you or by another collaborating agency. The legal requirements of Decreto 218/2005, Andalucía, does not differentiate between any of the possible number of “links” in the chain of professional involved in offering the home to the public and to clients. All intermediary real estate professionals and agencies are responsible for the required information and documentation.

Regards,
Miguel Lameiro

As you can see, now you can ask an expert directly from Comply218.com if you can’t find the information that you are looking for in our site. But don’t forget to check out all of our sections before, your question could have been answered earlier!

Note to all Private Landlords and Vendors…

After further research, we can now confirm that private vendors and private landlords are exempt from the new Decreto 218/2005 law. The rules and regulations only apply to real estate professionals, so if you are advertising your property on an FSBO site (For Sale By Owner) or are renting your property privately, you DO NOT have to comply with Decreto 218. We hope this clears up any confusion.

Thanks for Complying!

If you managed to stay awake while reading through the English translation of the Decreto218 Law (which is now Printable, so why not take it out on to the terrace with a [very] strong coffee?), a few thoughts are likely to have hit you. The first is probably “Come again?”; while the second may well have been “Ok, but that could mean any number of things…” Far be it from us to suggest that the law is intentionally arcane and obdurate, but it certainly seems open to various interpretations. Hence, and triggered by the comments being raised in Your Questions, the following statement is our latest take on the matter:

Just a note to all of the unanswered questions appearing on the boards thus far…

From our understanding of the law, and our dealings with agents already directly affected by it, our advice would be to err on the side of caution, ie, if you are unsure enough to ask the question, then make provisions to cover your back. The law is lengthy and complicated, so it is a far more sensible option to cover all bases. So, if you are only renting out your property short term, for example, why not just compile the relevant info on the DIA? As we have stated, and until we know otherwise for sure, it is unclear whether this is necessary. However, far better to spend minutes and man-hours than fines and Euros! As ever, we will bring you further updates/news when we have it. Until then, keep asking – and answering – questions.”

We are working hard here at Comply 218 to give you the most useful information about Decreto 218, and now we are very pleased to bring you a Decreto 218 English Version with the official information of this Spanish Law translated into English!

Check out our Decree 218 Download Section to get a copy right now!

Please, note that this is not a legal translation, and it’s provided as is without any warranty for accuracy whatsoever.

The Decreto 218 affects everybody who is looking to rent a property in Andalucia, so if you are a prospective tenant or your company deals in rental properties, read on to ensure that you comply with 218…

You’re a Rental Agent: If you are an agent acting on behalf of a landlord, you need to do the following:

• Print off and fill out a Documento Informativo Abreviado (DIA – Download DIA form here).
• Have enough copies to hand to ensure that every prospective tenant who views a property and asks for a DIA can be given a clean, fresh copy, free of charge, upon request.
• Give a free, printed and completed DIA to the tenant upon their signing of the rental contract – whether requested or not, it is now compulsory to do so.

You are a prospective or existing tenant: If you are currently renting a property, or are in the process of seeking out new rented accommodation, you can choose to do the following:

• Request a fresh, printed and completed copy of the property’s DIA
• Expect to be given a completed DIA form upon signing a rental agreement – although it is advisable to request to view a copy before agreeing to sign a rental agreement. That way, you are armed with all the necessary information required to make an informed decision.

This law is being enforced NOW, so do not hesitate to follow suit,– you do not want to be hit with a hefty fine now, do you? Thanks for Complying! Check back soon for more updates on Decreto 218/2005.

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.

Don’t get caught out!

Comply218 recently spoke with Adam Gale, Managing Director of Duchy Estates, and discovered that the inspectors are already doing the rounds, with fines for non-compliance being handed out indiscriminately.

Full interview posted here soon, so watch this space!

Queries from agents are already pouring in. Below is just an example of the kinds of questions being raised:

“Hi

Having just been informed about the changes, could someone please send me a list of the required forms we have to collect from the seller of the property?

Your help is very much welcomed.”

Well, first of all, you can check out our latest posts to find related information, or use the search bar to find a specific thread or phrase. If you can still not find what you are looking for, check out our Downloads Section. Here you can find useful documents that will help you to comply with Decreto 218.

The required forms you have to include in the DIA (Documento Informativo Abreviado) that must be enclosed with any property offer can be downloaded right here. Click here - Informative Document on Property for Sale for an example of the forms that you are required to fill out (you can modify it for rentals according to the official Decreto specifications); located in our Downloads Section. Filling out this document properly should ensure that you are following the correct procedure at all times.

If you have any further queries, questions, doubts or comments to add, please feel free to post your thoughts, tips, advice or anything that springs to mind, right here.

Thank you for Complying!

It’s been said that there are no foolish questions, only foolish silence. So, what could be more foolish than paying the penalty for not complying with a law that is, by all accounts, pretty simple to adhere to?

Decreto 218/2005 has been introduced to protect the consumer and ensure that all real estate professionals are playing by the rules. Ignorance or oversights are no longer valid excuses, and the penalties for continued non-compliance can be severe. Which is why, if you have a question – whether you are an estate agent, property developer or a consumer – and you cannot find an answer, you should post it here, and we will do our best to help you as accurately and as quickly as possible.

Comply with Decreto218 and everyone benefits. Don’t know how? Get in touch with us now!

If you are thinking of buying, selling or renting a property in Andalucia, or you are a real estate professional, sales agent or property developer operating in Andalucia, it is extremely important that you get to grips with the new Decreto 218/2005 Law. As with any new law, confusion can often reign, so the following breakdown has been designed to make things a little clearer for all concerned.

First and foremost, the Decreto 218/2005 Law has been implemented to safeguard the consumer against unscrupulous, unprofessional and inaccurate practises in the real estate industry in Andalucia. In a similar vein to the UK’s Home Information Packs (HIPs), the aim of the Decreto is to provide consumers with as much accurate information relating to their intended property purchase or lease as possible. So, the following information has been compiled to inform both the consumer and the professional – what to do, what to expect and what penalties will occur should protocols be ignored…it’s all here.

Who does the new law apply to?

All real estate professionals operating in Andalucia (such as Real Estate Agencies and Property Developers) that deal directly with the consumer must abide by the new stipulations in the law. Even if your company only sells property in Morocco, or France, or Dubai – if you conduct business in Andalucia and this is where your contracts are drawn up and signed, Decreto 218/2005 must be adhered to.

What protocols do professionals need to follow?

There are just a few protocols to remember, which should soon become second nature and simple good practise. Firstly, a Decreto 218 Notice must be displayed in all sales offices in a visible location that the customer can see. This ‘seal of quality’ denotes that your company is adhering to legal protocol and will not only instil your customer with confidence but it also ensures that you, as a company, are not in breach of the new legal requirements. You can then adapt your sales pitch accordingly: your company can GUARANTEE clients maximum protection during the buying/renting process because, should you fail to deliver, it is YOU who pays the price.

What documentation do professionals/consumers need to be aware of?

The names of the documents are as follows: for new-build properties, the seller must complete and present a Documento Informativo Abreviado (Essential information about the property) to any consumer who visits a house or unit. This document lists the home’s address, its description, its price, purchasing methods, land registry information, year of build, utility connections and additional information. This document is also required for resale properties that have undergone architectural alterations. For rental properties, should a prospective tenant request this document, it must also be presented and, regardless, MUST be given to a tenant upon signing a rental contract.

For normal resale properties (where a second or subsequent transfer of title deed has taken place) that have had no alterations, a Ficha Informativa (Home Inventory) detailing information about the property must be presented to all potential buyers who attend a viewing.

* All documentation must be presented complete, in printed format and free of charge. The vendor or professional intermediary (Estate Agent) must attest to the accuracy and validity of the information presented.

** Sales offices also need to display two notice cards stating that consumers have the right to request these documents at any time during their viewing process.

How do consumers benefit?

All home buyers and rental tenants will be able to make an informed decision, safe in the knowledge that all information pertaining to the property in question has been presented to them by professionals who are operating according to the letter of the law.

How do industry professionals benefit?

They have no choice – this is not an ‘opt in’ scheme, this is the law. By following the law, they can guarantee peace of mind for all consumers, which in itself is most certainly a good thing.

And the penalties for non-compliance?

In a word – severe. Take a look at the following fines…

Minor Offences up to €5,000

Serious Offences up to €30,000

Very Serious Offences up to €400,000

Now, a Minor Offence is simply not following the above rules. Yet this quickly escalates to a Serious Offence or Very Serious Offence should a company continually ignore the law or is deemed to be habitually abusing it.

So there you have it: a new law, a new set of practises to follow. There really should be no need for further confusion because, if adhered to, the Decreto 218/2005 Law ensures that everyone is a winner.

You can have a look at our Downloads section to find useful documents about Decree 218.