In short.
- Handover (recepción) is the act by which the contractor delivers the finished works and the developer accepts them, with or without reservations; it must be recorded in a document signed by at least the developer and the contractor, containing five minimum particulars and with the final completion certificate attached (art. 6.1-2 LOE).
- If the developer neither accepts nor rejects in writing, 30 days after notice of completion the works are deemed tacitly accepted (art. 6.4); from that date —or the date of the record— all the liability and guarantee periods under the LOE begin to run (art. 6.5).
- Reservations come at a price in the insurance: unless otherwise agreed, losses originating in reserved parts are not covered by the LOE guarantees until the remedy is recorded in a new document signed by the same parties (art. 19.9.i).
The acta de recepción de obra —the building handover record— is the document that starts the clocks of the LOE: the ten-, three- and one-year liability periods generally run from the day it is signed (for reserved items, from their remedy), or from the day the works are deemed accepted if nobody signs it. And, unless the policy provides otherwise, a reservation noted "to avoid an argument" leaves that part of the building outside the property damage insurance until another record states that it has been remedied.
For the technical or finance director of a property developer, the site manager of a construction company or the manager of a development vehicle, the handover record is not a key-handover formality. It is a risk document, and it is worth drafting as one.
What is handover of the works?
Law 38/1999 on Building Regulation (Ley de Ordenación de la Edificación, LOE) defines handover in article 6.1 as the act by which the contractor, once the works are completed, delivers them to the developer and the developer accepts them. It may take place with or without reservations, and must cover the whole of the works or complete and finished phases of them, where the parties so agree.
The record must be signed at least by the developer and the contractor (art. 6.2). This is no courtesy: the law frames it as an express obligation of both. Article 9.2(c) requires the developer to sign the handover record, and article 11.2(f) requires the contractor to sign the setting-out record and the handover record.
The professional site management team (dirección facultativa) is not required by the LOE to sign the record, but it does sign the final completion certificate attached to it. We cover its role and exposure in liability of the site management team.
The scope is building works within article 2 of the LOE. In public works, handover is governed by Law 9/2017 on Public Sector Contracts (Ley de Contratos del Sector Público, LCSP), with rules of its own that we summarise below.
English readers may recognise a comparable milestone in "practical completion" under JCT contracts. It is only a point of comparison: it is a contractual concept of English practice, not the legal equivalent of handover under the LOE.
Is there a provisional and a final handover?
The LOE regulates a single handover, with or without reservations, plus the separate record confirming that the reservations have been remedied. The distinction between a "provisional handover record" and a "final handover record" is inherited terminology that still appears in some private construction contracts.
If your contract uses it, it should make clear which of the two records is the "handover" for the purposes of article 6.5 LOE, because the liability periods and the start of the ten-year insurance depend on that date. Any ambiguity on this point feeds straight into how the guarantees are calculated.
What must the handover record contain?
There is no official template, but there is a minimum content. Article 6.2 LOE requires the record to state, as a minimum:
- The parties involved.
- The date of the final completion certificate for the whole of the works or for the complete and finished phase concerned.
- The final cost of material execution of the works.
- The declaration of acceptance of the works with or without reservations, specifying any reservations objectively, and the period within which the defects observed must be remedied.
- The guarantees, if any, required of the contractor to secure its liabilities.
This list works as a checklist for any handover record template you may use: if any of the five particulars is missing, the document is incomplete under the law, whatever format it takes.
The final completion certificate, a mandatory annex to the record
The last paragraph of article 6.2 requires the final completion certificate (certificado final de obra), signed by the works director and the construction execution director, to be attached to the record. It is the document that evidences completion of the whole of the works or of the phase concerned, which is why the record must state its date (art. 6.2(b)).
Who signs it is not a matter of style: the LOE places the obligation to sign the final certificate on the works director (director de obra, art. 12.3(e)) and the same obligation on the construction execution director (director de la ejecución de la obra, art. 13.2(e)).
Its date has an effect of its own. The 30-day period for accepting the works is counted from the completion evidenced in the final certificate, starting from written notice to the developer (art. 6.4). A wrongly dated certificate, or one signed before the works are actually finished, shifts the entire handover timetable.
Letter (e): the contractor's guarantees
The fifth particular records the guarantees the developer requires of the contractor. The LOE itself provides for one: the one-year guarantee for defects in finishing may be replaced by a retention of 5% of the material execution amount of the works (art. 19.1(a)). It is not currently compulsory: the second additional provision of the LOE has made only the ten-year guarantee of art. 19.1(c) mandatory, and only for buildings used mainly as housing; the one-year and three-year guarantees remain a reference. To this are added any bonds, sureties or retentions agreed in the contract; we explain how they work in guarantees in private construction contracts.
Finally, the handover record forms part of the as-built documentation that makes up the Building Logbook (Libro del Edificio, art. 7 LOE). Regional housing legislation may add requirements to that logbook; it is advisable to check the rules of the region where the development is located.
Accepting with reservations: how to draft them and what they entail
The LOE requires reservations to be specified objectively and with a period for remedy (art. 6.2(d)). Once the defects have been remedied, this is recorded in a separate document signed by the signatories to the handover.
Reservations have two consequences that are often overlooked at signing.
On the liability periods. Article 17.1 LOE sets the liability periods "from the date of handover of the works without reservations, or from the remedy of those reservations". Reserved items do not follow the same clock as the rest of the building.
On the insurance. This is the effect with the greatest financial consequences. Article 19.9(i) provides that, unless otherwise agreed, the LOE guarantees do not cover losses originating in parts of the works subject to reservations recorded in the handover record, until they have been remedied and the remedy is reflected in a new record signed by the signatories to the handover. At the same time, article 19.9(d) excludes damage arising from alterations or works carried out after handover, except those remedying the defects observed at handover: repairing a reservation stays within the system; a later refurbishment does not.
In practice, four points deserve care when drafting a reservation:
- Identifiable: room, building element and specific defect. A generic reservation ("snagging pending in common areas") can drag more of the building into the exclusion than necessary.
- With a specific period for remedy, as article 6.2(d) requires.
- With a responsible party: who remedies and who checks.
- With its remedy record. Without it, the exclusion in article 19.9(i) remains live even though the defect has been repaired. It is the most frequent oversight and the easiest to avoid.
If the ten-year policy contains a different agreement on reservations, what it says prevails, subject to the policy conditions: which is why that clause is worth reading before signing the record, not after.
Are you about to accept a development with reservations outstanding? We will review the impact on your ten-year cover with you.
Rejecting handover and tacit acceptance
The developer may reject handover if it considers that the works are not finished or do not conform to the contractual conditions (art. 6.3). The rejection must be reasoned in writing in the record, which will set a new period for handover.
Unless expressly agreed otherwise, handover must take place within 30 days of the completion date evidenced in the final completion certificate, a period counted from the written notice given to the developer (art. 6.4). And if that period elapses without the developer having stated reservations or a reasoned rejection in writing, handover is deemed to have taken place tacitly.
The practical reading differs depending on which side of the table you sit:
- For the contractor, what starts the clock is the written notice of completion to the developer. Without provable notice, there is no clear count of the 30 days.
- For the developer, silence is equivalent to accepting without reservations. If there are defects, they must be recorded in writing within the period; otherwise the guarantee periods start to run as if they did not exist.
Effects: why the date of the record matters
Article 6.5 LOE is brief and decisive: the liability and guarantee periods laid down in the law run from the date on which the handover record is signed, or from when handover is deemed to have taken place tacitly.
The three periods of article 17.1 hang on that date —ten years for structural damage, three for habitability defects and one, for the contractor only, for defects in finishing—, counted from handover without reservations or from their remedy, which we develop in our article on ten-year latent defects liability.
The date of the record is also a milestone for the policy:
- Premium paid at handover. For property damage insurance under the LOE, the premium must be paid at the time of handover of the works (art. 19.2(b)). If payment by instalments has been agreed, failure to pay later instalments does not release the insurer from its obligation.
- Hinge between covers. Handover generally closes the works-in-progress stage and opens the LOE regime. How cover is split between contractors' all risks or works liability and the subsequent period is a decision best taken before handover, not on the day of signing.
- Exclusions that depend on that date. In addition to reservations, unless otherwise agreed the guarantees exclude alterations or works after handover, except remedial works (art. 19.9(d)), and the maintenance costs of the building once accepted (art. 19.9(f)). Damage to neighbouring properties is not included either (art. 19.9(b)).
In residential developments, handover between developer and contractor is not delivery to the buyer, which is the event relevant to the guarantee of advance payments on homes.
The technical inspection body (OCT) and handover
The LOE does not mention the "OCT" (organismo de control técnico, technical inspection body). It regulates building quality control entities (art. 14), which provide technical assistance in verifying the quality of the design, the materials and the execution of the works. In insurance practice, the technical inspection body is usually one of the quality control entities provided for in art. 14, engaged by the developer to meet the requirements of the ten-year insurer.
Its role around handover is market practice, not a legal requirement, and depends on each insurer's conditions. Typically, the ten-year insurer makes acceptance of the risk conditional on an OCT supervising the design and execution from the outset, and its final report usually precedes final issue of the policy around the handover date.
Hence a practical recommendation: if the record includes reservations on structural elements, they should be consistent with what the OCT has flagged in its reports. Discrepancies between the two documents can complicate or delay issue of the ten-year latent defects insurance, whose acceptance and cost cannot be taken for granted in advance.
We coordinate the timetable of the ten-year policy, the OCT and handover. Let us talk about your development.
Handover in public works: what changes under the LCSP
In public works contracts, handover is governed not by the LOE but by the LCSP. Article 210.2 requires a formal and positive act of acceptance or conformity within the month following delivery or performance of the subject matter of the contract, or within the period set in the tender specifications on account of its characteristics.
Article 243 sets out the procedure for works. The act is attended by a technical officer appointed by the contracting authority, the works director and the contractor. If the works are in good condition and in accordance with the specifications, they are deemed accepted, the record is drawn up and the guarantee period begins. If not, the defects observed are recorded and a period is set to remedy them; if the contractor fails to do so, a further non-extendable period may be granted or the contract may be terminated.
The guarantee period may not be less than one year, save in special cases (art. 243.3); return of the performance bond depends on its expiry. If, once the guarantee period has expired, the works collapse or suffer serious deterioration incompatible with their function owing to hidden construction defects caused by breach of contract, the contractor is liable for 15 years from handover; within the same period it is also liable for structural damage, counted from handover without reservations or from their remedy (art. 244.1). The action is time-barred two years after the damage occurs or becomes apparent (art. 244.2).
The role of an independent broker
The record is signed in a morning, but its effects on the insurance programme last ten years. As an independent brokerage, we act on the mandate of the developer or the contractor, not the insurer: we coordinate the handover timetable with the ten-year policy (premium paid, OCT reports), check that the reservations in the record do not leave parts of the building without cover and that the remedy record is signed, and plan the transition from works-in-progress cover to the LOE regime. If your company develops or builds on a recurring basis, we approach it within insurance for construction companies.
We review your construction insurance programme with no obligation: works in progress, handover and the LOE guarantees. Contact us.
Frequently asked questions
Who must sign the building handover record? At a minimum, the developer and the contractor (art. 6.2 LOE); for both it is an express obligation (arts. 9.2(c) and 11.2(f)). The final completion certificate, signed by the works director and the construction execution director, is attached to the record.
What happens if the developer does not sign the record? Unless expressly agreed otherwise, if it does not state reservations or a reasoned rejection in writing within 30 days of written notice of completion, handover is deemed to have taken place tacitly, and the liability and guarantee periods run from that moment (art. 6.4 and 6.5 LOE).
Can the works be handed over in phases? Yes, if the parties so agree and the phases are complete and finished (art. 6.1 LOE). In that case, the record states the date of the final completion certificate for that phase (art. 6.2(b)).
Does ten-year insurance cover defects noted as reservations? Unless otherwise agreed, not until they are remedied and the remedy is recorded in a new document signed by those who signed the handover (art. 19.9(i) LOE). It is advisable to check what the specific policy says on this point.
Is a technical inspection body compulsory? The LOE does not impose it as such: it regulates building quality control entities (art. 14). In practice, it is a usual requirement of ten-year insurers for accepting the risk, and conditions vary between insurers.
Sources and legislation
- Law 38/1999 of 5 November on Building Regulation (Ley de Ordenación de la Edificación, consolidated text): articles 6 (handover of the works), 7 (as-built documentation), 9.2(c), 11.2(f), 12.3(e), 13.2(e), 14 (quality control entities), 17.1 (liability periods), 19.1(a), 19.2(b) and 19.9 (guarantees and exclusions) and second additional provision (compulsory guarantees).
- Law 9/2017 of 8 November on Public Sector Contracts (Ley de Contratos del Sector Público, consolidated text): articles 210 (performance and acceptance), 243 (handover and guarantee period in works) and 244.1-2 (hidden defects and limitation).
The content of the record, the handover periods and the specific guarantees depend on the construction contract and, in public works, on the specific administrative clauses of the tender (pliego de cláusulas administrativas particulares); this guide describes the legal framework and is not a template record. The requirements of the technical inspection body, the issue of the ten-year policy and its timetable depend on each insurer's conditions; neither acceptance of the risk nor its cost is guaranteed. This information is for guidance only and does not constitute legal or binding advice. New Brokers Correduría de Seguros, S.L., registered with the DGSFP under reference J0140.
