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Land Grab Law - Should You Worry?

As the co-owner of www.valuvillas.com, an estate agency in the Valencian Community of Spain, I am somewhat surprised I have never had any issues with the so called "land grab" problem in this area. But I am told by my Spanish friends here that this is now less common in modern Spain. However, we have seen this happen recently in Malaga where a whole raft of people, Mayors, Developers and Lawyers were arrested en bloc for money laundering.

The local government has stated they will warn anyone well in advance if this is likely to happen in an area where they have purchased a property. I have been reliably informed that there has been only once local case, where this happened to 300 to 400 properties. They were all on a hill and were all in danger of subsiding. The local Town Hall came to the rescue and built the necessary infrastructure to save them all. They exercised the said law and charged each owner about 25% of their then property value for the privilege. Of course some objected and were forced to pay in the end. The others paid up as they could see they may end up with nothing if they didn't. The result was that all were saved and all the properties doubled in value, since they suddenly became a desirable area with some excellent infrastructure in place.

We hope this helps answer your questions about various articles that appear in the UK Press from time to time. We sometimes discuss this with friends who are living here and none of them are worried about their own properties, all of which are in the country, but which mainly are only up to about 3,000 square meters. One had 16,000 sq meters and was also not worried about the matter.

In 2005 the old LRAU law was replaced with the new supposedly better LUV law and the EU are watching the situation very closely. The EU believes that the LUV law does not go far enough to protect the owners, so are in a constant dialogue with the Valencian Parliament.

However, in a statement in June 2006 Francisco Real, the President of the Valencian Council of Lawyers, stated: - Neither the European Commission nor the European Parliament were competent to determine the legality or not of the Valencian Land Laws (LUV). In the communiqué, Mr. Real stated the view that the constant criticism of the LUV represent a transgression against the principle of sovereignty of the Valencian Community and that the European Parliament is not the adequate forum to verify whether or not any abuses had taken place, but that these should be heard by a tribunal of a member state in this case Spain.

The statement added that a large amount of the complaints were made from property owners whose homes were built outside any urbanising project and on top of that, built on ground qualified as non-buildable, which has resulted in the appearance of clandestine urbanisers, as a result of the scant discipline in this regard undertaken by the local town halls.

New Spanish Land Law

A new Spanish law came into force on July 1st 2007 to help clean up the Spanish Property Industry and help regain its reputation which has been tarnished after several public scandals over recent years, regarding the legitimacy of planning permissions and corruption in the allocation of permits to build new homes.

The new law covers 3 main areas: The Land Legal System, Property Valuation and Citizens Rights and Duties which between them have the potential to change the way the Spanish Property industry works.

The law specifically addresses the issue of the growth of cities which can be sustained and managed and the protection of the environment in the country which attracts many of Spains millions of annual visitors.

The law aims to add transparency within the planning system, as it will now be against the law not to make public who will benefit from land which has been reclassified for building. This is intended to ensure that public officials who have ties to the property industry, a property developer or a particular piece of land will be obliged to disclose this publicly as part of the planning process.

Isabel Perez Blanco, based in the Marbella office of law firm Irwin Mitchell Abogados said "If the law is adhered to then the levels of corruption which have gained the Spanish property market a bad reputation should be significantly reduced".

The impact of the new law extends beyond those who are landowners. It expressly rules on ownership rights, landowners obligations and the right to have a decent home and to the right of citizens to participate in urban planning proceedings. Ms Perez Blanco continued: "It appears that in the most part, the new law will alleviate many concerns that people have surrounding buying a property in Spain" There seems to be a general consensus that the proposed land law is a positive move from the National Government. As with all Spanish laws, people have the right to appeal particular parts of the law. There were no such appeals so the law was introduced unchanged on the 1st July in 2007.

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