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Spain's 'land grab' comes to an end

28th November 2005 | back to article listings BACK    print this article PRINT

New rules have been unveiled in the south of Spain designed to eliminate the problem of developers to abuse the system and take large amounts of land for themselves.

A new law being debated in Valencia could bring an end to the so-called 'land grab law', which has been abused by Spanish developers for many years, to the detriment of many property investors forced to pay the prices demanded by the land-owning developers.

Corruption and misapplication have been blamed by Rusticasa property consultants as one of the main reasons for the exploitation of the current law and it is thought that the changes proposed could wash away these problems and provide far greater openness in the Spanish property market. The negative impact of the media campaign surrounding the old LRAU law has led to some people finding it difficult to sell their property, because investors have become increasingly wary as to the potential for unscrupulous developers to take land.

In the past, developers have been able to take advantage of the LRAU law allowing them to appropriate land for the "public good", using a range of arguments to claim that what ever they are using the land for comes under the "public good" requirement. However, such moves have led many investors to shy away from the region because of the reputation for developers to sweep away investments at a stroke by invoking the LRAU.

Therefore, many will welcome the news that the Valencian courts are currently looking at proposals for a new rule, the LUV, which could take the place of the current system and reduce the threat of developers taking over investors' land.

Even better for investors is the news that the courts are understood to be taking into account European Union rules on the right of the individual. The region is conscious that it does not want to be taken to the European Court of Human Rights over the issue and therefore is looking to incorporate European law into the rules so as not to infringe on the rights of individuals.

That can only be good news for investors, who are likely to be protected by such an approach far more than under the current system, which seeks to assert the right of the public over the right of the individual. Rafael Blasco, the minister responsible, has promised to take action on all the points made by the European Union's Petitions Committee.

The changes will be a welcome relief to many investors, for although the current law has in reality only affected a very small percentage of the Spanish property market, its threat has been enough to put many people off, having a negative effect on the property market and making it difficult for Spanish property investors to make headway in the rural Spanish property market.

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