The real estate market, as many others, has been hit hard by the pandemic, and one of the effects it had is that many of the commercial premises that had to close after months of inactivity have been bought by investors and individuals with the idea of ​​ converting them into residential units. This conversion of premises has grown in recent years given that it is also a very profitable practice.

Steps to follow

Converting commercial premises into residential properties is not a difficult process, but it is important to take into account several issues. At Peace of Mind Property Management, we provide a summary of the steps to follow.

• Previous checks to verify that the conversion can be carried out since the premises meet the minimum requirements.
• Project and licenses. An architect needs to define a technical project, that will require approval by the Town Hall technicians who will verify the project complies with the regulations and requirements before issuing a license or a declaration of responsibility.
• Carry out the corresponding works on the unit.
• Regularize the change of use of the premise, once the works are finished, the new residential unit needs to be registered in the Cadastre (an administrative register in Spain) and in the Land registry. To do this, the deed of the property has to be changed by a public notary acknowledging that the property it is no longer a commercial unit. With the deed modified and signed it can be taken to the Land registry, and to the Cadastre. With the receipt of presentation, the Town Hall grants the license of first occupation.

Can all premises be converted into residential properties?

No, not all premises can be converted, but there are 2 ways to find out:

• Carry out an urban consultation, which is done directly at the town hall of the municipality, where they issue a binding document: the urban compatibility report. The downside is that being the public sector, the process takes time.
• Request an architectural feasibility study, this is the fastest way to find out if the conversion can be carried out.

Minimum requirements that a premises must meet to be able to carry out the conversion into residential:

Façade:
A minimum of 3 linear.

The lowest minimum space standard:
Depends on the muicipality, but it must be over 38m2, although with at least 25m2 a studio can be built. Premises smaller than 25m2 cannot be converted.

Minimum ceiling height:
At least 75% of the space should have a ceinling height of 250 cm or above, and the remaining 25% of at least 220 cm.

Glass area:
A net clear opening of glass area is required to have the necessary meters of natural light and ventilation.

Building depth:
It influences building circulation and configuration and is limited depending on the municipality. For residential units in general, narrower building dephts have a greater potential to achieve optimal natural ventilation and daylight access.

Surface above ground:
Only surfaces that are above ground are liable for a change of use.

Possible neighbours’ objections

In the significant majority of cases, a neighbour would not be able to have any objections to the change of use. In any case its always a good idea to check the specific rules and regulations of the community in case the conversion in expressly forbidden, something quite unlikely.

Other points to consider

If the property to be converted is located in a building with a façade or in a protected building, this could impact on how the conversion works are carried out, or on the permissions needed.

Consider costs – how much needs to be spent in the conversion?

The fees will depend on the size of the premise and the refurbishing that needs to be done and are provided by each municipality. As an example, and to serve as a reference costs are broken down as follows:

Prior checks:
200€/400€

Project:
Preparation of the technical project is around 1.000€-1500€ depending on the type of renovation/ adaptation works needed.

Licence:
Town hall taxes vary, it can be around 2.000€/ 3.000€.

Regularization:
Notary fees, land registration and taxes around 1.500€.

Summary: 4.000€ + cost of the work + VAT (approximate cost)

Technical-administrative procedures to convert a commercial premise into a residential property.

• Processing by the responsible declaration procedure that covers the works to transform the premises, adapting the spaces and facilities to the new use as a residential unit. For this, the project signed by a competent technician is presented to the town hall to obtain the corresponding building license.
• Once the building works have been completed, the final work certificate is obtained and with this the application form for the license of First Occupation is completed. Once a City Council technician is assigned to the work, he or she will contact the applicant to carry out the verification visit to verify that the work carried out comply with the regulations and thus be able to obtain residential use.
• With the conformity of compliance with the urban regulations and the work completed, we need to communicate the relevant alteration by means of a cadastral declaration that will register the change of use carried out on the property.

Conditions of the new residential unit

Being a new construction, the property must comply with the technical building code and with the urban planning regulations of the municipality where it is located. According to the PGOUM General Plan, a property converted to residential are always considered as a new development and therefore have a series of characteristics, among other:

• The property must have at least the following elements: dining room, kitchen, bedroom and bathroom.
• If a studio apartment is built, bedroom, kitchen, and living room can be in the same area, plus a separate bathroom.
• One of the rooms of the apartment must face the façade and have an area of ​​at least 12m2, and within that area there must be enough space to draw a circle of 2.70m in diameter.
• Door opening sizes: apartment entry door must have a minimum height of 2.03 m and a width of 82.5
• The kitchen must have a cooking fume extractor with an outlet to the outside, complying with current environmental protection regulations, although in some cases charcoal rangehood filters can be used where ducting is not an option.
• All habitable rooms shall have ventilation (not less than 8% of the floor area of the room) and natural light (12% of that same area).
• Interior bathrooms and toilets must be ventilated by an extractor fan.
• The minimum width of interior corridors must be 85cm.

These are just some of the issues that must be considered when converting commercial premises to residential use. Our aim at Peace of Mind Property Management with this blog was to summarize the main points to take into account when converting a commercial unit to residential, the other important part, finding an interested, well-located commercial unit that meets the requirements is in your hands. We also always recommend to seek specialist advice throughout the process.