Spanish Property and Land Buyers

Ley Reguladora de la Actividad Urbanistica (LRAU)

Valencian Land Grab Explained

If you are considering buying a property or plot of land in Spain, especially within the Valencia province, this article goes some way to explain what LRAU is, how and where and why it can affect you and provide some useful tips and contacts.

You may have read in the newspapers about some property owners that have been forced into financial problems or even had to sell their property to pay for this ‘land grab’ demand, there are reports of figures as high as €90,000 plus being demanded.

I would first point out that this is not an anti ex patriot law. It affects all nationalities including indigenous Spanish nationals with some 15,000 property and land owners being stung since the law was introduced in 1994.

The contentious law known as Ley Reguladora de la Actividad Urbanistica (LRAU) was brought into law in a bid to utilise the large quantities of what appeared to be, ‘neglected or abandoned land’, classified as 'rural’ (non urban). Local governments of some provinces brought in the law to release this Rural (non urban) land for development, and re-classify it as urbano land.

Areas affected are widespread but are most commonly found along coast where there is a shortage of land and values are at a premium. Other areas of Spain are thinking of/have copied Valencia’s initiative as a way of generating development for local governments.

The law was intended for the purpose of acquiring this ‘Rural (non urban)’ land to be used to improve local amenities, ensuring developments were built with sufficient public services and facilities such as water supply, sanitation, roads, green spaces, and provide affordable housing for workers on areas of land that where totally undeveloped.

Sounds commendable, however in recent years the system has started to be abused and used to seize land from property owners to aid development of new estates whilst creating great profit for both the local authorities and developers.

The implications

The law enables property developers to ask that land be reclassified from rural (non urban) to urbano land without seeking the owners' permission. Not In itself that unusual as the same applies in the UK. However, there is a huge difference; under LRAU law, developers are able to go on to compulsorily purchase the land from existing land owners after reclassification takes place, often at prices far below market value.

Unlike the English compulsory purchase scheme where you the land owner receive market value compensation and have recourse to appeal against the size of compensation payout, LRAU works very differently with some victims of unscrupulous developers being forced to give part of their land back to the local authority and even pay considerable funds for the privilege of doing so.

It doesn’t end there, as in the UK, notices of intent must be published, but LRAU only requires 15 working days notice to be given to landowners to enable them to present an alternative urbanisation plan or an objection. (In addition, alternative plans put forward by residents are often refused because of what many see as collusion between big business and corrupt local government officials). Since the large majority of landowners are absentee and foreign or Spanish 2nd residences, this can cause a breakdown in the process leading to the key problems with the LRAU provision.

One case reported in the CB Freebie makes it even more of a scam. They report on a Mr Berry whose property encompassed 2,800 square metres of land, 1,800 sq/metres was expropriated under this law yet by paying the developer £50,000 he was able to take it back. Sounds, very iffy only the developer gained. Where was the public benefit?

In 2004, Rafael Blasco, the Valencian minister for land and planning promised reform to the law and bolster the legal position of small landowners. The new law was presented before the Valencian parliament in 200.

The LRAU law was amended in 2006 with LUV (Ley Urbanistica Valencia). The new law still referred to by people as LRAU or Land Grab changes little, doesn’t address the key issues and continues to leave land owners open to abuse and some legal opinions suggest it is even worse.

Other areas of Spain have different versions of the law which in some cases are just as outrageous. However the Valencian version of the law, only applies to the provinces of Alicante, Valencia and Castellon. Remember, Valencia is an extremely large province, encompassing the area from its border with Tarragona in the north and stretching all the way down to Murcia in the south, encompassing the entire popular Costa Blanca.

You are most likely to be safe if you buy a property on an 'urbanisation' on the coast. If buying a building plot, ensure it is urbano, with electricity, water and sanitation. However, if you are considering buying a rural (non urban) property, always take legal advice from an abogado, irrespective of whom tells you otherwise. Don’t believe anyone that tells you an area will never be a problem; opinions are not fact and always ensure that all the relevant searches are rigorously carried out at the local Town Hall

We hope we haven’t put anyone off considering moving to any area within the Valencia Region, just use prudence but don't give up. My wife and I live here and both the province and the people are delightful. I'd not live anywhere else. Just be very careful, your legal adviser should check all the legal points but many of the queries I outline are not legal points, they are common sense items you should query yourself.

Helpfull contacts

Help line! I also suggest you contact Mr Jonathan Lambert, Secretary of the Legal Action Group, a non profit organisation set up to combat this problem. Telephone 96 578 6315 or Willem Kamphuis (Dutch or German) on 96 648 2504

Check Out! organization, Abusos Urbanistico No

Before considering a property or area, please read about the other property purchase problems which may affect the enjoyment of your new home. They may also have serious financial implications and I would urge you to seek appropriate professional advice and assurance before proceeding with a purchase.

In 2009 Margrete Auken MEP Condemns LRAU - RTN The Favourite Free ...Written by David Mills. Wednesday, 30 September 2009 ... Parliament calls for the halting of all existing developments where criteria laid down by EU law ...

Article: Maurice Hamlin, Advise is from a lay person and all facts and advice should be checked with an appropriate legal council.

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