201512.12
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ABOUT LAND GRABS

Back in 2005 – 2008 many clients where worried about the articles describing land expropriation in Valencia then called “Land Grabs”.

Still today in 2015 I have been able to witness during my participation at international real estate property shows like “A place in the Sun live”, how this fear still exists. Perhaps it’s not a bad idea to remember what these land grabs (LG) really mean.

The first thing to point out is that these LG are related mainly rustic or rural land and in essence to that land which is not been ready to be developed. Therefore, these LG are not related at all to properties already built.

Secondly, and this is very important, this phenomenon of the LG it’s something created specifically under the Laws of the region of Valencia, it does not exist in Andalusia.  Different autonomous regions (Canary Islands, Andalusia, Madrid, Catalonia Valencia, etc)  can produce different laws to develop land. Each autonomous region chooses their own specific instruments to develop land though it’s true that the most successful ways generally speaking are often used in many different regions.

Existing developments, developments under construction or areas which are already urbanised would never be affected by such expropriations called LG.

Just as anywhere else in the world, towns in Spain grow and in this process the absorb surrounding rural areas. This is done in a ruled way through “town planning”, which is the responsibility of Town Halls.

In the past at Valencia, under the old legal system, when the Town Hall decided to develop a new adjoining area, it required the co-operation of the owners to organize the distribution of the new plots that would be created. This did not mean that the owners had to agree, but they still had to co-operate, willingly or by force. In fact the system was handsomely exploited by land speculators, since they could buy the land from the original owners and block the development long enough for the prices to rise.

The idea in Valencia was to grant the task of organising the land development to a single individual, a Developing Agent, under an agreement with the Town Hall. This agent would take responsibility for overcoming the resistance of the land owners either through agreements or by expropriation. In that way the development would not be blocked.

Despite the horror stories that make sell press, this expropriation in Valencia does not happen very often. Should an Agent ever become involved, it is probably done more energetically so that he may realise his financial gain but it is also true that Agents are weaker than Town Halls when it comes to a legal battle against the owners, battle is theoretically based in the defence of the common interest implied in the production of new developing land. On balance, no Agent has a real chance of developing an area without the agreement of all or at least the majority of the owners. In this respect, it is pretty much like the old system.

Notably, the system in Andalucia is a mixture of the old one and the Valencia system. Things work as they did under the old system, and only when the Town Hall officially states that the owners are not co-operating (which is quite a slow process), they may grant the task to an Agent (provided that somebody wants the job, naturally, something that not always happens).

In order to summarise, one could theoretically be affected by expropriation if owning a property in a non developed land and the following events take place:

  1. The plot becomes classified as developable land, what can be checked at the Town Hall.
  1. The Town Hall decides to develop that particular area (likely together with more private land owners).
  1. The Town Hall informs the owners that the area is to be developed, so that they can decide whether to co-operate or to object.
  1. If the development is blocked, the Town Hall must decide to expropriate by itself, or to do so with the aid of an Agent.

If the answer is NO to points one and two, the chances of being expropriated are more or less the chances of being struck by a lightning bolt.

Nevertheless, even if the process did start, it would take many years to be completed and would eventually entitle the owner to a compensation that does not have to be inadequate. On the contrary, transforming rural land into urban land is usually very good business!

If you wish to elude this possibility just buy your already built dream home and enjoy the climate, diet and lifestyle in Southern Spain!

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