Retroactivity in the reception of works fornon-compliance by the construction developer

Introduction

In a previous post, we have talked about the construction contract and the regulation on the reception of works. Also of the requirements for its origin and of the reasons for which the promoter can refuse. And that, in synthesis, are summarized in the issuance of an Act or minute on the part of the promoter. This report must document the existence of defects that present a certain entity in relation to what has been agreed. As we explained, this is a requirement imposed by Article 6 of the Law of Ordinance. And reinforced by the Jurisprudence that maintains that it is not sufficient to allege the existence of “imperfections or unadequate finish”. Nor is the existence of defects or omissions.

However, little is said about the effects of non-compliance with the reception of works due to the issuance of an unfounded Act. We specifically refer to the options available to the builder in the face of this passiveness of the developer. On the one hand, it is clear that he can judicially request that the developer be forced to receive the works. But on the other hand, Can he also request for the reception to be applied retroactively? That is what we are going to see next.

The retroactive reception of works

First of all, we would like to point out that there is no specific article that regulates this retroactivity.

Article 6 LOE (Ley de Ordenación de la Edificación), states that the reception will be effective within 30 days after its completion. Unless there is an express agreement to the contrary in the contract. The period will begin to run from the time the developer has been notified in writing. Likewise, it will be understood to be tacit if, after this period has elapsed, the developer has not expressed any reservation or reasoned rejection.

However, nothing is said about its retroactivity if it has to be declared by a Court. This leads us to investigate how our Courts interpret these situations of passivity and non-compliance by the promoters.

Jurisprudential interpretation

Unfortunately, at this point we also have to say that case law does not exactly use the word retroactivity. Rather, it speaks of automatic application. That is to say, if the act denying it is unmotivated, its application is automatic. And it will be, either after 30 days from the date the builder requested it to the developer. Or, from the date agreed by the parties in their respective contract. As we said in the previous point, it is possible that there are other types of agreements in the contracts on the reception period.

But it also grants another possibility of declaring it automatic by unequivocal acts of the promoter. Let’s take a look at some examples from our Courts.

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Judgments of our provincial courts

First of all, we will mention Judgment No. 332/2006 of the Provincial Court of Las Palmas. In it, it is ruled that there is tacit acceptance if the property does not want to cooperate with the act of reception. Specifically, if the property does not accept the work for reasons not attributable to the contractor, this will be understood to be automatic. And it will be so, after the computation of the term provided since the contractor notified the property. From which we can extract, although it is not specified, its retroactive application.

For its part, it is also interesting the position of the Provincial Court of Madrid. In its judgment 329/2013  also speaks about tacit acceptance of works by unequivocal acts of the promoter. That would be for example the use of the works or taking possession of them. So according to its criteria there are two forms of tacit acceptance of the works. One, by the passage of time (30 days or agreed period) if there is no  a reasoned minute that we have talked about so much. And another, the realization of unequivocal acts of the promoter (use or taking possession of the works).

Also its Judgment 189/2015 embraces the theory of tacit reception with effect from the request by the builder. In fact, it holds that, regardless of the existence of remediable defects, the works were completed and delivered. This is clearly revealed by the fact that the urbanization is in use and functioning. (Again, an unequivocal act).

The same line of argument is used by the AP of the Balearic Islands. Thus, in judgment 197/2016 it collects an indisputable tacit reception, although the act of reception has not been expressly formalized. This is reflected in the fact that the principal has proceeded to occupy and enjoy the facilities. This means, for our retroactive effects, to apply from that moment, the reception of the works.

As we were saying, there is no regulation on retroactivity in cases in which the promoter refused, without justification, to accept the works. However, according to the logic and the commented case law, it is possible to grant it. It should be noted that if this were not the case, the passivity of the developer could indefinitely extend the entry of the warranty period. And what is even worse, the payment of the works.

Conclusions

There is no regulation on the retroactive nature of the reception of works in those cases in which the promoter unjustifiably refused.

Only, and according to the provisions of article 6 LOE, the reception will be tacit if there is no substantiated refusal act/minute.

However, there is jurisprudence that can help us to grant this automatic retroactive character.

The Courts, maintain two assumptions of automatic reception:

• By the passage of time (30 days or agreed term) if there is no motivated act.
• By the performance of unequivocal acts by the developer.

It is necessary to seek judicial assistance to prevent developers from indefinitely extending the contractually agreed deadlines and payments.

If this article has been of interest, we also suggest you to read the following article published on our website: Can the validity and enforcement of contracts be left to the discretion of only one of the parties?.