Licenses of First Occupation, one of the most important and at the same time, irrelevant official certificates.

Licenses of First Occupation, one of the most important and at the same time, irrelevant official certificates.

A license of First Occupation (LFO) is certificate issued by a town hall which confirms that a newly built property (off-plan) fully complies with all planning and building regulations and is fit to be used as a dwelling; it is also a crucial milestone because it can condition occupation of the property in the following two manners:

-?????????Without it, utility companies will not connect the required supplies of electricity, water etc.

-?????????Authorities have the right to demand an owner of a new properties without an LFO to vacate it or, as is written in the law, “cease in its use” (we have never seen it enforced though).

LFO on secondhand homes is a totally different concept and to a certain extent, irrelevant because owners will not be affected by any of the described situations:

-?????????Thousands of properties -i.e., think of Marbella- don’t have them because they never obtained them or they did but subsequently, were cancelled.

-?????????Thousands of properties had them, but owners have since made reforms that in theory renders the LFO invalid, (think of porches that are closed, basements that are opened up etc.).

-?????????There is now no practical difference in a secondhand property having LFO vs not having it: no issues with supplies, getting financing, registering a title deed, selling etc.

-?????????The one exception is a bizarre Andalusian law where to rent “short term” -8 weeks or less- you need an LFO. Bizarre because you don’t need an LFO for say a 9-week short term rental.

Unlike new properties, an LFO does not guarantee that a secondhand property is compliant with planning regulations and therefore, a word of caution: the existence of an LFO in these cases can give buyers -and their representatives- a false sense of security.