LRAU Valencian Land Grab
Panic is being spread in the realms of prospective buyers in Spain by misinformation and half truths about the LRAU law that applies solely to the Valencia region. This article is written in order to calm some of the irrational fears about what is, in truth, an absolutely terrible law. Yes, let me get that straight, the LRAU is an awful law, a law that allows private developers to take away up to 40% of your land, force you to pay the urbanisation costs for that land, and make your ideal holiday getaway or retirement haven into a hell of development building and exploitation.
Or is it? In part that is true but if you are guided by expert advice and buy with your eyes wide open then there is no need to feel worried about this law. Let's get a few things straight.
* If the house you buy is on land that is already considered or classed as urbanised then it cannot be touched by private developers. It is only when the area is classed as rustic that there may be a problem.
* Secondly, if you buy in the middle of nowhere then it is very unlikely that anything will happen to your property. It is only when the property is near to the coast or on the edge of a town or village that it is likely to be affected because these are the areas where development is most likely to take place.
* Thirdly, you can use the land law to your own advantage. If you have extra capital with which you wish to invest apart from the initial cost of your place in the sun, then you can use this to fund development which can push up the price of your property by up to 300%. A house on urban land is worth much more per square meter than one on rural land.
* Fourthly, you can find an area where you feel that you could make money by developing and put up your own development plan earning yourself a small fortune in the meantime.
* Lastly, if someone puts a plan in place for our land then there is nothing stopping you from putting in a rival development plan and thus torpedoing the original plan. Then you need not develop for up to five years from that point and it is more likely that the offending law will be off the statute book before that time period is up, thrown out by the EU, and so nothing will happen without your consent.
The main thrust of the argument here is that if you are careful and let yourself be guided by people who know the market and the land classifications, then you need not fear buying in the community and you can even make it work to your advantage.
At Almerisol Properties we are of the opinion that it is totally safe to buy in this area as long as you are aware of any potential pitfalls and we inform all of our clients of what to expect on their property both now and in the future. We know a few things for certain though.
* Our clients will be the best informed about their property.
* We make sure that we know everything possible about the local area through discussions with the current owners and contacts with politicians and builders.
* We are constantly on the lookout for properties that will appreciate in value, that are comfortable and will allow our clients to live the good life under the Valencian sun.
* You will not be misled by us as to the status of a property. So if you are considering buying property within the Valencia province of Spain beware! After completing your purchase you could find yourself to be one of the owners who is forced to give part of your land back to the local authority and pay them considerable funds for the privilege of doing so.
As unfair as it is, you can't fight it. Don't buy unless your Lawyer has confirmed that it cannot happen to you. Ask your legal advisers if there are any problems that may arise from this Land Grab law. This is a law (the LRAU) passed in 1994 when the area involved was almost totally undeveloped. The concept was to assist local authorities to improve the infrastructure of the region. In recent years is has been used to seize land from property owners to aid development of new estates whilst creating great profits for both the local authorities and builders.
This situation can help to improve local amenities, water supply, sewage, etc. sounds commendable, however, unlike the English compulsory purchase scheme where you receive compensation this Valencian law forces you, the owner, to pay the builder for the privilege of what amounts to your land being legally stolen.
It affects all nationalities including indigenous Spanish nationals. Many property owners have been forced into financial problems or even had to sell their property to pay for this land grab demand. We hear of figures as high as €90,000 plus being demanded. All areas of Valencia are affected, the local newspaper has reported cases in Marxqueria, Pedramala, Teulada, Villajoyosa etc but these are only the tip of the iceburg. Anywhere in the Valencian region, you can be a victim. One case reported in the Costa Blanca Free Newspaper makes it even more of a scam. They reported 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 ?
A previous British ambassador, Mr Peter Tory, when attending a protest meeting in December in the Costa Blanca town of Javea stated that, "no one could be totally sure they were safe, the laws permitted, even encouraged unscrupulous builders and town halls to rewcive windfall profits at no cost or risk to themselves, largely at the expense of property owners, and the property owners involved have virtually no defenses. All EEC ambassadors and others outside the community have joined Mr Peter Tory in complaining to the Valencian and National Governments that the Law should be scrapped or radically amended.
Advice! Don't buy in this region without first putting your legal advisers on the spot to ensure they can be held responsible if you buy on their advice and later find that this law affects you. Also, if you already happen to be one of the unfortunate land owners involved, be sure to contact the British Ambassador or the British Consul immediately.
British Consulate. Alicante. Tel 0034 96 521 6022 Work hours 8.30 - 1.30
British Ambassador. Madrid. Tel 0034 91 700 8200
A new National law may help the fight against the LRAU
It is worth reading this law carefully. It seems to be in conflict with the provisions , for example of the LRAU which require the "ceding"- some call it theft, of a substantial portion of land, with no compensation. Unless I misread it, this requires "market value" compensation, which may mean forcing the responsible authorities to actually utilize their expropriation authority, rather than bowing to pressures from developers or agents. There is a process by which "market value" is determined, not detailed in this law, requiring evaluations by qualified assessors (peritos) and an adjudication. Note this is a national law, which should override regional ones, such as the LRAU or its near equivalents in other regions. We do not know if this law has as yet been tested in court against the regional ones. There may be some jurisprudence in Madrid for example. This law was brought to our attention by the Secretary of the Cabinet of PM Aznar, Pita Canas, recently.
If you are considering moving to any area within the Valencia Region, don't give up. The province and the people are delightful. Just be very careful, your legal adviser should check all the legal points.