LRAU - 'Land-Grab'

Background and latest news on LRAU

Many people contemplating purchasing property in Spain are worried about the implications of the so-called 'Land-Grab' law which has resulted in some people losing their property.

Background:

Some popular parts of Spain are at risk from the possibility of 'Land Grab', but it is important to put this into perspective. Most of the people who have been affected by this law bought their properties many years ago - probably 20 or 30 years ago. At the time they bought them, they may or may not have taken legal advice. The law, which is being vociferously contested in the European Parliament was brought about because a lot of what was classed as 'Rustic' land (as opposed to 'Urban' land) was, or appeared to be, neglected and abandoned. The local governments of some provinces, notably Valencia and Andalucia, brought in the law to release this Rustic land for development, and re-classify it as Urban land. If some unfortunate owner had a property in the re-classified area, the developers had the right to compulsorily purchase the property in order to develop the whole area, or at least to purchase areas of 'garden' which may be in the way of, for instance, a new road. To add insult to injury, some developers then also demanded payment towards the cost of the new infrastructure - internal roads, street lighting, etc.

So whilst on the one hand, the law has allowed development of large tracts of land, and therefore provided more accommodation for the many people wishing to retire to Spain or have a holiday home there, on the other hand, a few people have been caught up in it, and as a result have suffered considerable anxiety and financial penalty.

Valencia is a very big province, stretching from its border with Tarragona in the north (the province in which the Ebro Valley is situated) right down to Murcia in the south, thus covering the whole of the extremely popular Costa Blanca.

How big is the risk to you? If you buy a property on the Costa Blanca on an 'urbanisation' you are likely to be safe. (Some of the developers of these urbanisations are the very people who have benefited from 'land grab'), and your property will have only a small garden. However, if you are considering buying a rural property, it is extremely important that you take legal advice and ensure that the relevant searches are rigorously carried out at the local Town Hall. Check to see if there are any plans for further development in the area - new roads, airports, golf courses, urbanisations, etc. It is usually the Notary, who is a government official, who will carry this out for you. You cannot be too careful, but of course, you can only check the information which is available at the time. It is certainly worth keeping an ear to the ground and talking to the local people, because they often hear 'rumblings' about possible future development long before it reaches the public domiain. But do bear in mind that there is still a lot of coastline yet to be developed - and that is the prime target. If you spot a beautiful villa completely on its own overlooking the sea, it would probably be a risky purchase in this area.

The Ebro Valley is not one of the areas affected by the LRAU laws and is mainly classed as Rustic land - much of it designated as Natural Park which is protected by law. However, it is still important to be vigilant, especially near the coast on the edges of the Delta, because there may well be further development here. It is easy to see why there has been so much development on the 'Costas' because people flock there in their tens of thousands, but one question worth asking when assessing potential risk is: Is this area likely to appeal to the sort of people who love the vibrancy of the Costas? If it is a rural area with virtually no 'nightlife' the answer is probably 'No'. That being so, it would seem logical to suppose that development on a massive scale is unlikely to happen. However, there is no room for complacency - make sure your legal people (usually the Notary) do all the necessary checks with the Planning Department at the local Town Hall. They will have a list of Long Term Projects.

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Latest News from the UK Daily Telegraph, International News, Sunday
12th June 05

"Spain to scrap 'land grab' law and compensate Britons who lost homes Spain's notorious 'land grab' law, under which hundreds of expatriate Britons have lost homes on the Costa Blanca, is to be scrapped in three months.

Faced with the prospect of being hauled before the European Court of Justice, Spanish provincial legislators have pledged to redraft the property laws by September and work out a compensation package for homeowners and those who have already lost their properties. The move is a huge relief to thousands of residents on the Costa Blanca, many of whom faced financial ruin after their homes were seized for far less than their market value.

Under a loophole in the law, known at the Ley Reguladora de la Actividad Urbaniste (LRAU), property agents could compulsorily purchase prime rural land by saying it was for urban development.Owners were often ordered to contribute large sums for further improvements in local development projects.

After a long campaign by local and expat homeowners, the Valencian regional government has finally dropped its opposition to reform the law and agreed to speedy amendments supervised by a Spanish parliamentary ombudsman. A spokesman for Rafael Blasco, Valencia's minister for housing, said: 'The LRAU has a lot of problems, and the government of Valencia is working with the European Parliament to replace it with a new one by September.'

The apparent breakthrough was announced last week by Michael Cashman, the former East Enders actor who is now a Euro-MP and a vice-president of the European Parliament's petitions committee.

Mr Cashman, who led an investigation by Euro-MPs into the law last year, said that Spanish politicians had conceded that the law had been abused.The Euro-MPs investigation found that the law had led to collusion between corrupt developers, officials and lawyers, although its call to end the practice was initially ignored. Spanish officials are said to have had a change of heart after the European Commisssion threatened Madrid in April with huge fines unless it resolved the matter."

Note: the article ends with words of caution from Charles Svoboda, the former head of Canada's intelligence service who led the anti-land grab campaign. His view is that the Valencian government will bring a draft replacement law to parliament, but will keep procrastinating. Meanwhile the existing law will remain on the statute books. However, Madrid is certainly now taking notice.

(To the best of the author's knowledge the information above is correct, e & oe)

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By Angela Bennett
Go-to-Spain - http://www.go-to-spain.com 
Country property with land for sale in the Ebro Valley, Costa Dorada; villas and apartments on the Costa Blanca. Personal,
friendly service.

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Other comments

  • BOB DUNFORD, 07 June 2011 Reply

    ILLEGALLY BUILT PROPERTIES IN LAND.

    WHAT ABOUT THE 1.5 MILLION PEOPLE FROM BRITAIN.FRANCE GERMANY.HOLLAND SWEDEN.IRELAND.WHO WITHOUT KNOWING BOUGHT A ILLEGAL HOUSE IN SPAIN.THE LAWYERS EVEN DREW UP PROPERTY DEEDS BY A ARCHITECT.THE PROPERTY DEEDS WERE SIGNED BY A ABOGADO.STAMPED BY A NOTARY PASSED BY THE LAND REGISTRY .LOCAL COUNCIL.THEN AFTER THE NEW BUYER MOVED IN TO HIS HOUSE WAS TOLD YOUR HOUSE IS ILLEGAL.YOU CANT DO NOTHING ABOUT IT,YOU WILL NEVER EVER HAVE MAINS WATER.NEVER HAVE STREET LIGHTING.THE SPANISH LAWYERS TOOK YOUR MONEY FOR THE HOUSE LAWYER FEES.COUNCIL TAX.AND YOU ARE LEFT WITH A HOUSE YOU WOULD NEVER HAVE BOUGHT IF YOU KNEW IT WAS ILLEGAL,ALL THE MP FROM 6 DIFFERENT COUNTRIES IN THE EU HAVE BEEN FIGHTING THIS SCAM .FOR YEARS NOW.LETS HOPE THAT THIS WILL BE INCORPORATED IN THE NEW CHANGE OF SPANISH PROPERTY LAWS.EVEN THE HUMAN RIGHTS HAVE SAID THIS IS AGAINST ALL HUMAN RIGHTS IN THE EU,SO LETS ALL FIGHT THIS SCAM.FOR ALL THE OLD AGE PENSIONERS WHO GAVE THEIR MONEY THINKING THE SPANISH LAW S WAS SAFE,