SUMMARY OF THE ARTICLE
- Why utility contracts matter in property purchases
When buying a property, it is crucial to review not only the deed and the status in the Land Registry, Cadastre, and Town Hall, but also utility contracts for water, electricity, gas and other essential services.
- What to check
Ensure contracts are definitive (not provisional or construction-related), that ownership is correctly registered, and that the supply address matches the property.
- Occupation licence and new connections
Some providers require a valid occupation licence, even if the supply is active. For new connections, a responsible declaration may need to be submitted to the Town Hall. Urban planning issues, lack of sewage connection, or other irregularities may prevent activation of utilities, leaving a legally owned property without essential services.
As we have pointed out in previous articles, buying a property is probably one of the most important decisions a person can make. Signing the deed before a Notary is only the final step. Before that, it is necessary to carry out a series of checks to ensure there are no legal or administrative problems. This includes reviewing the property’s status in the Land Registry, Cadastre, and Town Hall, among others. One often-overlooked essential aspect is utility contracts. This week, we look at the importance of property purchases and utility contracts such as water, electricity, gas, and other basic services.
Types of utility contracts.
In practice, utility contracts are usually divided by service:
Electricity and gas: contracts with the relevant distributor and retailer, including the corresponding meter.
Water: usually with the town council or municipal company, where it is key to verify that the supply is active and registered to the owner.
Telecommunications (internet, phone, TV): these contracts can be transferred or cancelled depending on the provider’s policies, and the agreement of the parties.
Some properties may have special community or central heating contracts, which should also be reviewed before the purchase.
What to check in property purchases and utility contracts.
It is important to ensure that contracts and supplies meet several requirements. Among others:
Definitive and active contract: The contract must be in force and must be definitive—not provisional or for construction purposes. Also, there must be no pending debts, etc.
- Property address: The supply address must correspond exactly to the property being purchased.
- Correct ownership: The current owner must appear as the contract holder. In some situations, such as when a property is inherited and sold immediately, there may not be enough time to change the contract ownership.
Precautions in property purchases and utility contracts. Occupation license.
When a supply is already active, many companies do not require any special documents for transferring ownership or to direct debit the payments to the account of the new owner. However, there are cases where suppliers may request a valid occupation licence. This also applies when the property has no active supplies and a new connection must be arranged. In these cases, it would be necessary to apply for the occupation license to the Town Hall.
This presents an additional risk. If the property has issues unknown to the buyer (urban planning irregularities, lack of sewer connection, or other problems), the supply may not be activated. And this would leave you, as the buyer, with a property legally owned by you, but without essential services.
Conclusion.
At White & Baos Lawyers, we are experts in real estate law, property purchases and utility contracts. If you are thinking of buying a property in Spain, do not take risks. A legal review of the property (Land Registry, Cadaster, Town Hall, Utility contracts, etc.) will allow you to identify potential issues and understand the property’s legal status. Contact us today, and we will assist you throughout the purchase process.
The information provided in this article is not intended to be legal advice but merely conveys information relating to legal issues.
Carlos Baos (Lawyer)
White & Baos.
Tel: +34 966 426 185
E-mail: info@white-baos.com
White & Baos 2026 – All Rights Reserved.
