Apartments without habitability certificate up to €760,000 in Barcelona

BarcelonaSearching on any of the major real estate portals for lofts or studios on the ground floor in Barcelona generates a results page full of listings for properties without a certificate of habitability available for purchase –mostly– or for rent, some of which at prices far above the market average and that can reach 760,000 euros. Despite being a legally required document to live in a dwelling, when asked by ARA, Catalan administrations –such as the Generalitat or the Barcelona City Council– do not currently provide data on inspections and sanctions for this matter.

Although substandard housing was consolidated in Catalonia during the post-war period, and has evolved since then, lofts or studios without a certificate extend this reality to new socioeconomic spheres, people who self-identify with the middle class and who until now were excluded from this scourge.

The bulk of properties without a certificate of habitability –the document that specifies that the apartment meets the necessary conditions for people to live in– advertised on portals like Idealista or Fotocasa typically range between 125,000 and 170,000 euros. Regarding the surface area, there are many between 25 and 40 square meters, although there are also those that are up to 60 or 70 square meters.

Real estate agencies acknowledge that the supply of housing without a certificate is a growing trend, responding, on the one hand, to the scarcity of housing supply in Barcelona and, on the other, to the closure of businesses. From the College of Architects of Catalonia, Arcadi Viñas explains that "today, there are many architects who are dedicated to changing the use" of premises to housing. It is after the work is completed that the owner must apply for the certificate.

"Barcelona is full of these apartments, especially on secondary streets. There are them in all neighborhoods," assures a salesperson to ARA who asks not to reveal their name or the real estate agency where they work. "It's not just for poor people; nowadays, practically everyone has difficulties accessing housing," points out a professional from another company in the sector who also requests anonymity.

Is it legal?

Among the lofts or studios advertised on housing portals, some openly acknowledge the lack of a habitability certificate in the property description. In contrast, those that do not explicitly provide this information are very careful not to refer to the property as a "dwelling" or "apartment" at any time.

The existence of these apartments gives rise to various irregularities. To begin with, the head of Civil Law at the Barcelona Bar Association (Icab), Miquel Serra, is categorical in stating that "legally, a property cannot be used for residential purposes if it does not have the consideration" and this consideration is precisely what the certificate provides.

The body responsible for issuing and registering certificates is the Catalan Housing Agency, linked to the Department of Territory of the Generalitat, although it can delegate these powers to local administrations, as in the case of Barcelona. Both the Department of Territory and the Barcelona City Council have refused to detail how many cases they have opened for living in spaces without a certificate and how many have resulted in sanctions.

Alternative ways to achieve the goal

Joan (a fictitious name) is a university professor who, in his thirties, has bought a renovated commercial space in a trendy Barcelona neighborhood as his only way to live alone. It's street level and about 40 square meters, divided into a kitchen-dining room, a bedroom, and a bathroom. "The apartment is very nice, they've just finished renovating and painting it," he explains.

He is aware that not having a certificate of occupancy may entail "certain problems if you want to rent it out," but he states that it involved "little" debate for him when making the purchase, and that he will try to register his residence there. "I am aware of the difficulties I may encounter, and the high probability that the City Council will not accept it," he explains.

He trusts that the council will soon change its position because the practice of living in commercial spaces "is becoming widespread." He argues that it is a "good way out" to access the market, both for purchase and sale and for rent, and he also links it to demographic changes: "Families are getting smaller and smaller and have meager incomes," he says.

Very different is the case of Maria (also a fictitious name), a mother of two teenagers. She bought a commercial space with her partner twenty years ago and they renovated it from top to bottom, "when this way of doing things began to become fashionable." They opted for this option after searching for "a place to live forever" that fit their budget, and not finding one.

She has raised her children in a property with three bedrooms, natural light, and a large patio at the back, an element that was "very important" to her. "At least, if I was going to spend money on it, I wanted to buy something I liked," she recalls.

The absence of a certificate of occupancy was not an obstacle for them: "We didn't want to speculate with this apartment," meaning, to sell it or rent it as such at a much higher price than they had bought it for, although she is convinced that, after the work they did, she would get the certificate today. They are not requesting it because it involves "a lot of paperwork and an investment." Despite her positive experience, she also emphasizes that betting massively on converting commercial spaces into housing "carries a risk, because many times you are putting people in holes."

A market of irregularities

The housing crisis and the existence of empty commercial premises in Barcelona have accentuated the dimension of a market with various legal edges. On the one hand, Serra, from the Icab, explains that the transaction of these flats complies with the law as long as the buyer and seller know that it is a property without a certificate and that, therefore, "it cannot be lived in". On the other hand, passing them off as homes is a "very serious infringement" punishable by fines of between 90,000 and 900,000 euros.

However, he warns that in practice there are "grey areas" in operations, conduct that moves at the limits of legality and plays with ambiguity: "You will hardly find cases where according to the deed it is a dwelling and in the end it turns out that it is not. On the other hand, it may be that the seller emphasizes that the property is an «ideal studio for living» or advertises it within the housing category of real estate portals", he explains. The responsibility of the websites "is debatable", because "they are not intermediaries, they only use them to advertise themselves", while "the developer or the person selling it does have a responsibility", adds Serra.

On the other hand, the Generalitat established at the end of March that advertisements must specify whether or not the properties have the habitability certificate. Controlling this is the responsibility of the Catalan Consumer Agency, which, when asked about the number of infringements detected, assures that they will make the data public "later, as it is still very recent".

Fighting the mortgage

Serra warns that the inhabitants of these properties are exposed to strong legal insecurity. Electricity, water, gas, and other utility companies "must demand the habitability certificate" to provide a service. They risk fines of up to 90,000 euros because the law considers it a serious offense. The Generalitat has also not wanted to specify how many investigations it has launched or how many sanctions it has imposed.

Inhabitants also face difficulties in obtaining home insurance for the property; in obtaining profitability – since it does not have a certificate, the price paid by the buyer often does not correspond to the real market value, and it is prohibited to rent it out – or in accessing a mortgage to buy it. In fact, this is the reason why salespeople from advertising companies reveal in the first few minutes of the call that the property is not legally considered a dwelling, as ARA has verified after more than a dozen calls to real estate agencies in response to ads for flats without a certificate published on portals.

"Technically, mortgages for housing have better conditions, but in the end, what the bank looks for is solvency," summarizes Serra. Miquel (fictitious name) managed to get a well-known entity to lend him 70% of the price of the premises he bought in Barcelona at the end of 2020, to then renovate it. "They told me they would only give me 60%, but after fighting for it a lot, I got it," he explains.

Serra points out that in Barcelona there are premises "that could obtain certificates and do not obtain them because, due to density, there is no room for more properties." He opens the door to changing these parameters to expand the housing stock.

In architectural matters, Viñas, from the College of Architects, argues that "the [architectural] conditions to obtain the certificate are very minimal. Believe me: if a property cannot obtain it, it is because it is not habitable." He refers to parameters such as lighting, ventilation, and surface area.

Luxury and sub-standard housing

In parallel, the market for properties without a certificate of habitability has a small luxury niche –difficult to quantify because there is no official data– but it exists. Idealista, for example, advertises a 205-square-meter studio in the Sagrada Familia area of Barcelona for 769,000 euros. It is offered as a "spectacular industrial-style ground floor," which "combines history, modernity, and functionality in one of the most emblematic neighborhoods" of the Catalan capital.

The description of the property admits that "a change of use to residential is necessary" despite having undergone an "integral renovation." The photographs show modern appliances, LED lighting, and very careful interior design. However, the layout makes it clear that it is a commercial space: it is an open-plan space without any rooms, beyond a toilet.

On the same portal, there is an advertisement for a 92-square-meter commercial space, renovated by a renowned architecture studio. It is for sale for 460,000 euros and is divided into two "floors," connected by a staircase: on the ground floor there is a kitchen-dining room and the toilet, and on the upper part, a 25-square-meter loft, described as "ideal as a bedroom or workspace," with built-in wardrobes. "It is a versatile space, ideal as a creative space, showroom or an urban refuge with its own identity. More than a property, it is an architectural experience: a space that embraces, calms, and inspires through light, harmony, and silent beauty," concludes the advertisement's description.

The representative of a third real estate agency explains to ARA that, among buyers of properties without a certificate of habitability, there are those who seek "unique spaces" and, therefore, their motivation for opting for this option is not to access the housing market through a shortcut, given the increase in prices. However, she explains that they are "difficult to sell" properties because they appeal to a very specific segment of demand and, consequently, they try not to have many in their portfolio.