Land Grab or Spanish Urban development
Important information when considering buying property here in the Valencian Autonomous Community
Buyers of property in the Valencian Autonomous Community should be aware that under the Valencian Government's Ley Reguladora de la Actividad of 1994 all land may be converted for property development, ‘no urbanizable’ on historical, cultural or ecological Ley Urganística Valenciana ‘urbanizable’ is also, by definition, appropriate for ‘urbano’, since only by checking the status of the property.
Owners of property where a change of classification is approved should receive a notice from the town hall that they have 30 days in which to comment on the proposed new use. They may argue to preserve the to protect their existing rights, but as matters now stand the probability is that the change of use will be permitted, perhaps with some modification. The town hall's decision will be subject to approval by the Valencian government.
If planning is approved, current owners will be obliged to contribute to the new development. This may involve having some of their land expropriated (against exchange or compensation which will depend on the existing classification of the land). Owners will also have to make a financial contribution for the construction of roads, drains, lighting and other urban development costs.
It is important that British citizens who become involved in such cases should observe the 15-day limit for appeal (advice in negotiation with the developer (Prospective buyers should always check that the property they are thinking of purchasing has all the relevant legal planning permissions. Buyers should also be aware that there have been cases of estate agents, both here in Spain and in the UK, advertising properties that do not have the necessary planning permits.
This law has been amended by the Urbanística and passed in December 2005, but the transitionary arrangements are such that the measure in the first law are still in force for some projects.
These laws allow suelo rústico (rural land) to be re-designated as fit for property development if the town hall approves a developer's plan for such change of use. .. It is therefore important, when buying property, to check future development plans at the town hall. This is also advisable even where land is already deemed to be land classed as development land unless it has been deemed grounds can one become aware of the implications of likely future developments.
Prospective purchasers should take professional advice from a lawyer who can help with the necessary investigation.
This is a very serious and much talked about issue which is often in the media - the Spanish Urban Development Activity Act 1994 or the UDA. This piece of legislation which is best unbelievable and used by some to effect robbery of peoples land and human rights with the approval of the State in which they live. Its effect, already noticed by several British property owners is at least devastating. In one instance, a couple presented with a demand for 70,000 euros which when paid were promptly rewarded with a further demand for the same amount again. Many others have been billed with amounts exceeding 60,000 euros from which there seems to be no way out. The problem is that the it is quite within the law for this to happen so there is no real protection against it.
As if this was not enough, many also face the compulsory occupation of large pieces of their land, some losing large chunks of their gardens making their properties impossible to sell and or not for their true value. For many, this terribly unfair act will ruin them unless the Valencia government does something to stop this.
Many, when first hearing of the situation simply don't believe it - How can legal, peaceful people, Spaniards included, be subjected to a law which has no possible connection to anything which resembles basic justice? Well it's not too difficult to understand why this has happened and in part was brought about by Spanish bureaucracy and no doubt passed with the best of intentions.
This law, as was designed as a method of being able skip all the regulations in the Valencia province which had slowed development to a virtual standstill. The intention was to give local town halls the authority to prevent individul landowners from holding up major developments, rather along the lines of a compulsory purchase order in the UK.
The 94 act aimed to speed up holiday home development within the province which because of decreasing sales had virtually dried up partly because of the recession in the UK. It was believed that in the main, Spaniards would not be affected a great deal. However, as the UK economy regained its momentum, Brit's again began to flood into the country which seemed to be so attractive to them and was, already home to many. Prices began to rise again and some developers recognised that the UDA could be utilised to make a considerable amount of money with very little investment required.
Who is at risk? Can property be purchased on the Costa Blanca safely?
Yes, but in theory everyone is at risk, but in practice it is more likely to be anyone living in a property occupying a decent sized plot of land and who is not on an established urbanisation. Any person with such a property could receive notice that a portion of their land is to be effectively taken and on top of that, they could recieve a hefty bill for their contribution for the installation of roads, drains and lighting for the proposed new development. As the law stands, there is no appeal against it although it is being ongoingly fought for and there is now light at the end of the tunnel .
The law only gives residents 15 days to appeal. So this makes it almost impossible. On the other hand, the developers have had months to prepare their demands and prepare a defence against possible objections to their plans.
We asked above if property could be purchased safely on the Costa Blanca. We believe it can be. None of the projects planned or carried out has been done so with any degree of secrecy. Further, very few areas lend themselves to this type of development, the idea of which is to produce large, subsidised profits. So by using a qualified solicitor and a trusted agent you can find out what is or isnt happening in the area you wish to buy, in fact you can actually go yourself to the town hall and ask, you are also well within your rights to look at plans and the area in which you are interested. You can ask to look at the General Plan for the area if there are any developments they will be partial plans.
By avoiding known land grab areas and areas where land grab may be possible and developers involved in this type of development, then the situation should be avoided. You can also get your solicitor to look into this in the exact area where you are thinking of buying, he should be able to find out if there are any such problems past or present.
Although most unlikely, if you are ever involved in any aspect of this iniquitous law you should contact the British Consulate. Alicante. Tel 96 521 6022 Work hours 8.30 - 1.30 Madrid. Tel 91 700 8200
A new national law has now come into our force called Mostrar Ley1125P1TN
It seems to be in conflict with the provisions of the UDAA in that the new law requires compensation for land to be at market value. There is a process by which "market value" is determined, not detailed in this law, requiring evaluations by qualified assessors (peritos) and an adjudication. This is a national law which normally overrides regional ones, such as the LRAU/UDAA or its near equivalents in other regions. This law was adopted on May 20 of 2003.
Insurance can be obtained by way of protection against the effects of the LRAU and whilst this is a welcome service, the simple fact of the matter is that most buyers in the area are seeking primary residences. Financial compensation for most will do little to make them feel better over what may be the loss of their home.
Over 200 people met in Benissa in November 2004 to talk about their concerns and the effects of this law as more & more regions become affected by LRAU. The president of the group Abusos Urbanisticos No, Charles Svoboda’s was present to give his report on recent meetings with the Valencian ombudsman and the Promoters Association of Alicante. He also updated those present on the progress being made on taking cases to the Valencian and European courts.
The early prospect of a land grab insurance policy was also announced. By the end of the meeting a unanimous decision was made not to give in to abusive land laws and to fight the LRAU until it is scrapped and those affected by it properly compensated.
Valencia 'Land Grab' Law Explained in English
There has been much scaremongering in the British press and on TV (Holiday Homes from Hell) of late, which although it has helped by highlighting an issue of relevance to some, has tended to sensationalise rather than properly inform. Bad news is always good TV and there are hundreds and thousands of expats setting up home here most without too many problems other than the ones you would expect when setting up home in a foreign country. Headlines and quotes from angry expats have suggested that a cruel Spanish system is kicking people off their land completely or forcing them to pay for infrastructures they don’t want and/or taking some of their land for private gain.
The majority of this coverage about the difficulties facing some British buyers of homes in Spain, relates to emphasis on those affected by a law that came into force in the Valencia region in 1994.
In brief, the issue revolves around three classifications of land -
- land already urbanised,
- land suitable for urbanisation and
- rural land.
As in any country, when an area grows then rural land is sometimes re-classified by the local authorities as suitable for urbanisation (development). A law was introduced in Spain to prevent individual owners of rural property in areas that have been re-classified standing in the way of developments that would benefit the community as a whole, by improving services or creating affordable local housing. In recognition of the fact that the value of their property would increase significantly, the laws oblige these rural owners to contribute with cash and/or part of their land towards bringing in benefits such as mains water, sewerage, new roads etc., even though they may not want such facilities, preferring the old rural ways. They see the owner as benefitting as well as the developer when the land is reclassed and therefor worth more than it was.
Unfortunately, in one area of Spain the law was badly drafted, allowing a small number of developers and local authorities to exploit the situation against the interests of property owners, principally in coastal areas where land is in shorter supply and values are at their highest. As in the UK, notices of intent must be published, but just 15 working days are allowed to present an alternative urbanisation plan or an objection. Since many landowners are absentee and foreign, this can cause a breakdown in the process.
Firstly and most importantly, this particular version of the law only applies to the Valencian Community, i.e. the provinces of Alicante, Valencia and Castellón. In practical terms this means the Costa Blanca and the Costa del Azahar, plus their inland areas. The rest of Spain has different versions of the law and we have not had reports of any problems, although there qualified legal advice should always be taken wherever you buy.
Secondly, the law does not affect anyone with an interest in property in an area already urbanised or designated as such. This represents virtually all apartments, townhouses and other linked properties, plus a large majority of villas. The Spanish designation ‘urbanised/urbanisation’ does not necessarily mean a complex with a pool etc. - most streets of detached villas are in such zones. Purchases in such zones remain unaffected, although buyers should still take independent legal advice whereever and whatever they buy. There are nearly a million British people with an interest in a home in Spain. Only a small fraction could be faced with this problem. The large majority of owners of property in Spain have never experienced any significant problems in their many years of owning property here.
Thirdly, these cases are not an anti-British campaign by the Spanish, the small group affected has Spaniards and other nationalities as well as British.
Lastly, anyone who purchased and used the services of a good independent lawyer should have been fully informed as to any effect this law might have on them. They can then decide with their help what the risks are and whether to go ahead or not................
In summary independent legal advice continues to be the best way of protecting yourself when buying a property in Spain, in fact in any country so no matter what the property or location you need legal representation and that with and indemnity insurance would make sence, Ie one who will take full responsibility for what they have informes you. Beyond that, only those considering buying property in the area of the Valencian Community AND outside of an existing urbanisation (be it of apartments, townhouses or villas) need concern themselves about this particular law, although the same principals relating to advice apply wherever in Spain you wish to buy.
For more information on the fight against LRAU or details of how to join the AUN
Latest- 200 employees at Alicante’s European Patents Office have sent a dossier on land law abuses to the director general of the EU Market, Alexander Schaub. The dossier denounces the harmful effects of LRAU and highlights how the 10 year old law has infringed EU property rights."the European Court of Justice has just condemned the seizures and the Law after a class action brought by victims, and it looks as though massive compensation will eventually have to be paid out to the victims by the Spanish Government." (Updated April 2005)
New Land Law Approved
The new Ley Urbanistica Valenciana (LUV) to replace the LRAU has been approved, however will probably not come into place untill 2006
Although it is claimed that this new law will be fairer & more transparent critics are saying that it still lacks the necessary rules & procedures document which would provide property owners greater protection..........We will see
Taken from The Costa Blanca News 27th May edition
LRAU Update from 27th May taken from CB News 3-9th June
The commission is intent on persuing this matter through the courts in Luxembourg if necessary if Spain does not respond to a letter sent to official weeks ago!
Cashman who was heading the mission said the UN had recieved approximately 15,000 complaints and it was quite possible that these could lead to formal charges being laid against Spain. He added that a solution to the problem could be found, but only if the authorities take action and respond to to the commissions letter.
Up untill now the Valencian government has ignored all recommendations made to them following the visit last year
Lets just hope that with the threat of action from Luxembourg that something will happen soon.
So now whats happening........
The EU have now taken this to the European Courts and it is thought that they may now act.
Here is the report by Micheal Cashman for the petition that has been put forward Here
HELP with this law