What is an LPO and why is it important when buying a property – or is it?
StartGroups CEO Christofer Fogelberg explains about this controversial document in layman’s terms.LPO stands for licencia de primera occupacion or “first occupancy licence” in English. It can also be called cédula de habitabilidad sometimes.
A property can lack an LPO but still be a legal property – how come?
What is a first occupancy licence (LPO)?
When a property is going to be built the first step is to apply for a building licence according to the architectural plans. The Town Hall of the municipality checks that the property to be built is in accordance to Urban Planning (PGOU), approves the building licence and the property gets built according the the plans. When the building is finished the architect issues the “Certificado de fin de obra, CFO” which is a certificate that says the building work is finished. That document is used to apply for the LPO; “firstoccupancy licence”. The Town Hall checks that the property is finished in accordance with the original building licence and if the green light is given the property can be used and services such as electricity and water can be connected.
Between 2016 and 2023 an LPO was an obligatory condition to get a licence for Tourist Rental in Andalucia, but since a change in the law in 2024 it is no longer a requirement. Instead the Town Hall has to certify that the property is compliant with urban planning in order to get a legal rental licence.
Sounds simple and it should be. So why are there so many opinions about this? A colleague at the Real Estate Guild GIPE said to me the other day: “If you ask five lawyers you will get 5 different answers”. So I hope this short explanation will make it easier to understand the situation.
Why are so many properties lacking the LPO?
There are several reasons;
Properties that were built until the mid 1990 can often lack a LPO. Simply because back then ,there was little attention paid to that document by either the builder or the town hall A lot of times – depending on municipality – the builder simply didn ́t bother to apply for the LPO as they considered it finished when the CFO was issued. The electricity and water companies never askedfor it in order to connect (which they do at present).
Solution: These properties are often fully compliant with the Town Planning and can obtain a LPO if required. If they are built before 1986 there are several Town Halls that issue another certificate that validates the property status as long as no alterations have been done, for example a CARA certificate. This is a lot easier, quicker and cheaper than getting a new LPO.
Properties that were denied the LPO because they were not compliant with the building licence. This can happen when the builder builds more m2 than permitted by the licence, the building is too close to the boundary, to give a few examples.
Solution: This is more complicated as most of these properties are not compliant with urban planning. If the property was built more than 5 years ago and there as been no action taken against it by the Town Hall and there is no open investigation it can in many cases be possible to get a “AFO” that stands for “Asimilacion Fuera de Ordenacion”. That basically means that the Town Hall accepts the property as established and legal – but no exterior alterations can be made. So it is not possible to extend properties like this. Until recently a
“AFO” was accepted as a substitute for a LPO in order to get a licence for Tourist Rental, but with the change in the Andalusian law in 2024 an AFO is no longer accepted to get Tourist licences.The property has an LPO but has had extensions built on at some point and the extension does not have a LPO. Or if the property was built long ago without applying for a building licence.
Solution:
If it is compliant with urban planning an LPO for the building or extension can be obtained. This is quite costly and a time consuming endeavor.
Depending on the situation it can often be sufficient to get a certificate on non- infraction from the Town Hall (Certificado de no infracción urbanística “CNI”) andregister the extension in the property registry. In order to do this the extension has to be finished for more than 5 years and a specialized technician or architect has to issue a certificate with new floor plans. This is called a “Certificado de Antiguedad” and must include proof that the extension is older than 5 years, often with satellite images or aerial photos. Those two certificates are then used to make a title deed of new construction (escritura de declaración de obra nueva) in the notary and subsequently registered in the property register.
Do you need an LPO to be able to rent your property out to tourists in Andalucia?
NOW in 2024 the answer is NO. But between 2016 and 2023 it was a requirement. The new updated law that came out at the beginning of 2024 instead states that the Town Hall has to certify to the Junta de Andalucia that the property that applies for a Tourist licence is compliant with urban planning.
Can I live in a property that has not got an LPO?
If the property is of recent construction and the LPO was denied by the Town Hall for not fulfilling the conditions given in the building licence the answer is NO. But in most cases when properties lack LPOs it is because it was simply not applied for back in the day, and in those cases the properties can generally be inhabited and in most cases have been lived in for years or decades already.
My best tips
So there is not one general answer for this. The best guarantees you have as a property buyer is to use a certified Estate Agent, for example by GIPE (gipe.es) or API, when you start looking. When in doubt you can consult a lawyer but it is important to say that it is best to use a lawyer specialized in Property Law in the municipality where you are buying. Using a lawyer from Madrid, London or Paris for a property you are buying in Malaga is simply not good as they lack local knowledge and contacts in the area. The same goes for Estate Agents of course! We can not be specialists on everything! Use a local, certified real estate agent that has local knowledge and experience. Personally I always use a local agent when buying property in other parts of Spain, that is not in my area of expertise.
Please bear in mind that there are different opinions about this topic and in some municipalities or regions the process can vary. I am writing this as a licenced estate agent, GIPE & API-ANAI, working in the province of Malaga, Andalusia since 2001. What I describe is how I see it and also how I do it personally, when buying and selling property for myself after 23 years of experience.
