Dangers of the Spanish property market

The Guardian printed a full-page article yesterday about the Spanish property market with some startling figures that underline what we always advise to the thousands of users who write to us with questions about buying a house in Spain.

Anyone intending to purchase a property in this country is advised to first visit the site or house, then pay for the services of one of the many reputable lawyers in Spain (see lawyers fees in Spain) to check out all the legalities PRIOR TO SIGNING ANY DOCUMENTS REGARDING THE SALE and also, of course, before handing over any money.

According to the Spanish Agency for Holiday Homes quoted by the Guardian, Britons currently buy 50.000 houses in Spain each year and a group of Spanish companies specialising in homes for the elderly estimate that 226,000 British, 135,000 German and 35,000 Scandinavians are living here.

However, more and more stories of people buying properties in Spain do not have a happy ending. The Valencian LRAU law has made many properties vulnerable to possible seizure, as has the illegal construction of thousands of houses up and down the Spanish costas. According to the Guardian, a councillor of Alhama (a Murcian village with just 17,000 inhabitants where property developers plan to build 55,000 new homes and no less than 8 golf courses), has suggested that the area's biggest developer, Polaris World, has a London sales office where it is already selling unbuilt houses belonging to developments which have still not received full planning permission (although, in this case, they are expected to receive permission). And, the paper quotes the case of one British couple who have spent all their savings on a new home in Elche, but now risk having it demolished because the town hall says it was put up illegally by the builder they bought it from.

There are many reasons for living in Spain, but buying a house here is not as straightforward as it may seem and it is essential for buyers to get professional advice to prevent their dream home from going horribly wrong.

Valencia Land Law debated in the European Parliament

This week the European Parliament debated and voted on the recommendations of the Fourtou Report on the controversial Ley Reguladora de la Actividad Urbanistica (LRAU).

The law, known by those who protest against its consequences as the Valencia land grab law was originally designed to make sure that areas under development had sufficient infrastructure (roads, street lighting, green belt areas etc.). That was the the theory. However in practice the law has meant that property developers are able to apply to build on land already belonging to other owners where building is not permitted. When their application is approved (as it often is), the land is reclassified by the authorities, and the developers are then allowed to pay exisiting owners prices far below the real market value and build a road, a path or even part of a golf course, sometimes right through the middle of the former owner's back garden.

Most of the people affected by this law are Europeans who have seen their dreams of a perfect Spanish home in the sun shattered by ruthless developers. More than 15,000 people have made a formal protest asking the European Parliament to intervene, and the protest group set up to fight the LRAU, Abusos Urbanísticos No, has been active in attracting national, international, political and media attention to a growing problem and demanding a solution. And recently British law firm Irwin Mitchell decided to register land law victims with the European Human Rights Court .

Valencia's regional government promised in 2003 to revise and reform the LRAU, but seems in no rush to do so. A pre-project was presented to the Valencian parliament in June this year, but nothing has yet come of it. While the government insists that its intention is to change the law and protect the interests, and land, of property owners, opposition and protest groups allege that it is prevented from doing so from the interest of many of its members in the property development underway in the region.

Ever since local and foreign property owners started their active protest, the Government has come under increased pressure to do something. In the Summer a delegation of Euro-MPs visited the Costa Blanca and met with foreign residents, local politicians and property developers to discuss the problem. In November the European Parliament advised the Valencian authorities to modify urban development legislation in the region. And finally this week on 12th December the European Parliament discussed the Fourtou Report and endorsed its contents in a vote on the 13th by a massive majority of 550 in favour, 45 against and 25 abstentions. The Report calls on the European Parliament to urge a moratorium on the approval of new property developments on land where development is not permitted.

Any body considering buying property with land in the Valencian Region is advised to seek legal advice from a lawyer who can help with the necessary investigation to ensure that the land attached to the property is not in danger of being subject to eventual seizure by property developers.


Related:
EU homeowners and ambassadors challenge Valencian land laws
European Parliament delegation visit Valencia to challenge Land Laws
Valencian landlaws "unconstitutional"
Advice from the British Embassy to people purchasing land in Valencia