What is the Valencia land grab law?

The Valencian state government passed a controversial law to speed urban development in 1994.

This law, the ‘Ley Reguladora de la Actividad Urbanistica’ (LRAU), set out to ensure developments were built with sufficient public services and facilities including sanitation, green spaces, roads, etc. However, subsequent abuses by unscrupulous property developers have resulted in some small landowners having their land expropriated and/or receiving huge bills for ‘urbanising’ their land. This law was replaced by a similar law known as LUV Ley Urbanistica Valenciana' in 2006.

From rural to urban

The law enables property developers to ask that land be reclassified from rural to urban land without seeking the owners' permission. In itself this is not so unusual. In the UK anyone can apply for permission to build on someone else’s land! However, under this law, developers can go on to compulsorily purchase land from existing owners after reclassification takes place, often at prices far below market value.

As in the UK, notices of intent must be published, but currently just 15 working days are allowed to present an alternative urbanisation plan or an objection. Since many landowners are absentee and foreign, this can cause havoc. 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.

Areas affected are widespread but are most commonly found along coast where there is a shortage of land and values are at their highest. Other areas of Spain are thinking of copying Valencia’s initiative as a way of promoting development for cash strapped local governments.

Valencian parliament

Vigorous campaigning by an organization called Abusos Urbanistico No (http://perso.wanadoo.es/abusosurbanisticos-no/) and a group of British and Spanish Euro MPs has forced the Valencian government to give ground. In January 2004, the Valencian minister for land and planning, Rafael Blasco, promised to reform the law and strengthen the legal position of small landowners. The new law will be presented to the Valencian parliament later in 2004.

As with all property matters, using a lawyer can help safeguard your investment. On the positive side, the risk of getting caught up in this law can be minimised in many ways.

When considering buying a property you should discover the planning status, particularly the land classification. Under Spanish law, all land is classified as one of three categories: urban, developable, or non-urban.

Urban costs more

In fact, if you want peace of mind the answer is to simply buy property on land that has already been classified as urban - then you are normally protected from any land grabs. However, land designated as urban is generally more expensive than land designated as non-urban.

Remember that property on urban or developable land that has not had infrastructure installed will attract costs at a later date; and property situated on non-urban land may well be affected by a future reclassification to development or urban land and this may constitute a land grab.

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