IS IT LEGAL?
There has been much publicity in the British press and on TV about developer abuses in Spain. The issue is complicated, and deserves explanation.

Whilst the vast majority of homes in Spain are fully legal, it is a fact that a small percentage of them are not. This is not a Brit problem – it affects all nationalities including Spanish people who are unfortunate enough to have been caught in a double-edged trap.

For there is not one problem; there are two with a common cause. Its route lies in the historical and rather engaging 'mañana' manner in which the Spanish used to deal with the whole subject of planning (and everything else) and the impact of the ex-pat boom which started in earnest about 20 years ago.

The first problem
All towns and villages in Spain must by law produce a town plan every 10 years (Plan General de Ordenación Urbana or PGOU) to designate land zones into categories of usage from green belt through to urban. This masterplan must then be approved by the regional government and there is a limit to how much land can be reclassified at each 10 year period – 30% of population growth and 40% of land.

But the huge influx of new residents and home owners meant that long before existing PGOUs were due for renewal, the urban land ran out. The Town Halls were caught between a rock and a hard place. In many rural communities, the council has been formed traditionally from farming folk and shopkeepers, with much collaboration within the political factions, and they faced a challenge that, in comparison to the somewhat tranquil past, was a rather rude awakening. They did not have enough urbanised land allocated for homes available for development. Should they turn away the thousands of eager newcomers that could transform their communities? Many villages and hamlets were dying on their feet, young people leaving in droves because of lack of work opportunities and no prospects, shops and facilities closing, churches emptying, bars (heaven forbid) facing bankruptcy, the financial return on traditional crops and farming collapsing, and no other realistic opportunities for investment – a problem experienced indeed by many English rural communities.

Encouraged by the developers and the influx of people with money, agricultural land deemed as useless and rural land of little value was given local permission for development, with solicitors and politicians promising that all was, or would be, well. Farmers’ useless fields turned into potential goldmines. Little costal fishing towns – fish now largely gone - looked at a dazzling housing boom future. In the past, turning a blind eye to the problem of classification was normal because it always got sorted out, when the newly built land was reclassified on the new PGOU. That is why it used to be common place for new home owners having to wait perhaps a few years before they got their ecrituras (deeds). The famous phrase 'This is Spain, it takes a bit longer. Why are you British in such a hurry' was much used. Mañana!

Over the last 20 years or so, expats and Spanish alike bought in good faith from developers, believing and being told authoratively that there was no problem - and normally that was the case. But in the last 5 years, central policy has changed. To the wide-eyed astonishment of some local authorities, not all new locally produced PGOU’s have been automatically approved by Central Government. As a result, some homes are now - in theory - illegal and a few are under a potential threat of demolition, as are a small number of hotels. There are of course many challenges to these rulings both locally and with the European Government, who are backing the case of the threatened owners on human rights grounds.

Although of little comfort to those few unfortunate people, in many senses the central government is right. In the modern world, land cannot be reclassified willy nilly. Issues concerning the environment, health services and educational availability, water supply, power, sewage and other infrastructure, flood planes and water tables, central and regional planning, population distribution, transportation links, commerce and farming must all be considered holistically. This apart from the problem that some councillors acted unlawfully, taking bribes from developers and awarding contracts to close family members (the major members and planning administrators of the previous Marbela council are all in jail or about to be so detained). Our information is that, now, councillors are acting with rather more care.

But will mass demolition take place? Probably, no. There is little will by local authorities to do so, and they are mindful of the disruption such acts cause to the economics of  planned expat development. But some have and will continue to be exposed to the threat, and great care should be taken by anyone planning to buy in Spain to ensure the property is on the pertaining PGOU – and eventually in all the other newly European Community countries where similar ‘abuse’ of planning laws may be taking place.

So, how do you know if your planned purchase will be legal?
I have to emphasise that the problem, in comparison to the whole housing bank, is small. Buying a property in Spain is probably a safer proposition than in newer EU member states. However, a house will only be safely legal if is on an existing PGOU. Anything else will be currently 'illegal' and - theoretically - could remain so indefinitely.

• If a house was built on land NOT approved for urban development in the last 5 years, it was probably built on rural land (not designated for building), and is almost certainly illegal. (Of course, you would expect it to be so in the UK as well! There are high profile examples of houses that have had to be demolished in the UK because they ran fowl of planning regulations.)
• Owning rural land is quite acceptable and legal, and a land escritura is common. It is when a house is placed on that land the problems start. It is the house which is illegal, not the land. 
• If there is no escritura for your house, it is illegal. 
• If there is no ‘Final Habitation Certificate’ it is illegal. And anyone who thinks that they are safe because they do have a 'certificate of first occupation', should be reminded  that those unfortunate residents at Vera also held that document. 
• Mains supply of water or electric does not indicate legality. 
• Mains sewerage is a better indication of legality, but it must be mains, and not a large (community sized) pozo.
• Roads, street lighting and pavements do not indicate legality. 
• Some houses, in or too near ramblas (water courses), public rights of way, or green belt areas, will never be legal, and indeed a few may need to be demolished. 
• If a house is on rural land, it is illegal, period. Even if it is 'Regularised' via the 4 year rule, it is still 'illegal'. 
• It should take no more than 3 months to obtain an escritura for a legal house. 

The second problem
Stemming from the same needs, some developers in association with sometimes crooked councillors have taken unfair advantage of a law known as LARU. Under this law, developers were able to take land from existing landowners for inclusion in large projects (minimum 50,000m2). The land was either designated as Rustica Land (farm land) or general land, where the Town Hall or Regional Council had given no other planning consents.

The original purpose of this law was to open up more building land mainly for social housing and to keep property prices down as far as possible for first time buyers and low income families. Under the law, the landowner who looses his land to the overall development becomes part of the project and would benefit once the land was developed and sold. As a partner in the development, the landowner would be responsible for his share of any infrastructure costs incurred by the overall project. The law was open to huge abuse has now been replaced (rather unsatisfactorily). The unfair use of this law has been that greedy developers have been lining their pockets and those of their councillor friends by building holiday homes at high prices on huge developments, not social housing.

Some people who bought large plots in rural areas of perhaps 10,000 square meters or more, living blissfully for years in an old olive or orange grove in beautiful houses often converted from old farm buildings, have seen their land bulldozed for housing, magnificent vistas replaced by urban sprawl. No compensation will ever replace their lost serenity, and none are happy to now be part of an urban development and, moreover, having had to pay for the ‘benefit’ of streets, lighting and urban facilities. Some have even had all or part of their actual house torn down to make way for a road.

The European Parliament ruled in November 2004, that this law was illegal. The Valencian Government, the main abuser, now has to consider compensating anyone who has already been affected by this law. To the best of our knowledge no one has been compensated to date.

The number of people affected are relatively few, but anyone buying a rural property in a large plot should take expert advice.

Happy house hunting!
Rod Davis.

PS The Villes del Vent development is a legal site on Jávea’s PGOU, and has full mains drainage. It cannot be subject to the LARU law or its replacement.

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