ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós, Cases Lacambra
• whether there are any litigious procedures con - cerning the real estate. 2.5 Typical Representations and Warranties The parties negotiate the representation and warran - ties within a commercial real estate transaction. The typical representations and warranties in Andorra are as follows: • the buyer must always obtain authorisation for any foreign investment from the Andorran government before the completion of the transaction (which must be notified to the Foreign Investment Registry ( Registre d’Inversió Estrangera )); • at the time of granting the public deed of sale, the property must comply with the conditions for building on the land, being free of charges, encum - brances, tenants and occupants; • the property must be transmitted with all the rights, facilities, elements and equipment that are inherent and accessory to it; • the seller shall carry out all the necessary or agreed acts to avoid the occupation of the property by third parties so that it is free; and • although, from a legal standpoint, an environmental contingency certificate is not requested, it is highly recommended. The buyer’s remedies against the seller for misrepre - sentation include the resolution of the agreement, with the return of any reciprocal benefits, the compensa - tion of damages to the buyer, or the specific perfor - mance of the terms and conditions of the agreement. Depending on the relevance of the transaction, it is customary for the seller’s representations and war - ranties to expire after a certain amount of time. The typical range of that survival period is usually between two to four years. On the other hand, there is usually a cap on the seller’s liability for a breach of its representations and warran - ties, the typical range of that cap being from a limited percentage of the price to the full price. 2.6 Important Areas of Law for Investors The most important areas of law for an investor to consider when purchasing real estate could be:
• civil law, to have the base knowledge of property rights and the different charges and encumbrances that the real estate could have; • administrative law, in order to know the regulations pertaining to planning and zoning; and • tax law, to use the most beneficial tax structure to acquire the real estate. 2.7 Soil Pollution or Environmental Contamination In accordance with Andorran legislation regarding civil liability, the liability for others’ actions must be considered. In this sense, the buyer of the real estate shall be liable for any soil pollution or environmental contamination of real estate, even if it is not attribut - able to said buyer. The liability for others’ actions allows the buyer of the real estate to claim the necessary expenses to com - pensate for the damages against the seller since they had responded previously when it did not belong to them. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law A buyer can ascertain the permitted uses of a parcel of real estate under the applicable zoning and plan - ning law by consulting the Andorran official gazette ( Butlletí Oficial del Principat d’Andorra – BOPA), where the permitted uses for a plot or zones are published. It is possible to enter into a specific development agreement with relevant public authorities to facilitate a project relating to, eg, the execution of a project of national interest or local sectorial plans, a project con - cerning the construction of roads and communica - tions infrastructure, or the execution of the hydraulic and energy policy. 2.9 Condemnation, Expropriation or Compulsory Purchase In Andorra, there is a law of compulsory expropria - tion. The procedure first requires the prior declaration of the public utility of the construction project and necessitates the occupation of the property or the acquisition of the affected economic rights. In order to carry out the expropriation, the expropriator must develop a file, which is public information and be
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