Could this be the end of the land-grab law?

A former spook, who was director general of the Canadian equivalent of MI5, Charles Svoboda knows a thing or two about fighting terrorism.

But perhaps spying on foreign terrorist groups might seem a push-over in comparison with taking on the Spanish legal system.

Svoboda heads a campaign against the so-called “land grab law”, which, supporters claim, has robbed thousands of house-holders across Spain – both expats and Spaniards alike – of their properties.

Abusos-Urbanisticos-No (No to Urban Abuses) is fighting the regional government in Valencia in eastern Spain, who introduced the law ten years ago. The campaign has spread as other regional authorities have introduced versions of the same legislation.

But now it seems they have won the first round in their protracted campaign to win the back life savings of thousands of expats who have lost out to unscrupulous developers who exploited the law.

A highly-critical report by a group of MEPs to the European Parliament attacked “serious abuses” committed under the terms of what it called this “surrealistic” law.

Detailing the experiences of scores of “victims” the report said: “The law has led to a serious abuse of the most elementary rights of many thousands of European citizens by design or deceit.”

It goes on to condemn the way developers bribe town hall officials and siphon money into offshore banking havens.

Campaigners have also launched a law suit in Valencia to recover lost money and may take their cases to the European Court of Justice.

The law not only allows developers to expropriate part of an owner’s land or house, but also means that they can, in effect, charge them for doing so.

The “land grab,” as the practice has come to be known, is permitted under the Urban Planning Regulation Law, or LRAU, to use its Spanish acronym.

The law allows land to be confiscated in order to “urbanize” rural areas by adding infrastructure like roads, lighting, water pipes and sewerage.

Threats have, on occasions, accompanied orders to hand over land, whose status is changed by town halls which lift building restrictions by reclassifying rural land as urban.

Svoboda first became involved in the campaign after becoming suspicious of developers sizing up property near his own home on the Costa Blanca and decided to investigate.

Despite the potentially embarrassing report by to the European Parliament, Svoboda remains only cautiously optimistic.

“Though this law is totally unjust, the problem is it seems impossible to embarrass the Spanish. They do not seem to get angry about other scandals so why should they get angry about this?” he says.

Svoboda also says there is also the very real problem that even if the European Court were to decide in favour of homeowners who had lost out, getting the Spanish to implement the decision might not prove so easy.

His concern is that as other regional authorities have adopted variations of the same law, the problem has spread; he says he gets complaints from “hundreds” of worried homeowners, both foreigners and Spanish.

But this first tentative victory gives hope to those, like Danny Loveridge, who have already fallen victim to the developers.

Loveridge, who retired to a 130-year-old farmhouse near the Valencian town of Benissa several years ago, believes the EU report could help him recover some of the GBP 150,000 lost after developers moved in on his land.

“They took almost 75 percent of our land and gave us some other land that was worthless,” he explained. “There is now a roundabout where our swimming pool used to be and a bathroom fittings shop where our house was,” he said.

Loveridge was paid GBP 8,000 in compensation, but was then forced to pay the developers GBP 12,500 for the electricity, sewage, roads and other infrastructure for a proposed industrial estate.

He was forced to sell what remained of a GBP 260,000 property for around GBP 100,000.

For others, like Jan Richards and Roger Ranger, the very real worry is that any action against this law may come too late.

Richards left London on medical advice to live a more relaxed life in Spain and bought a two-bedroom house on 1,000sqm of land in Benissa, on the Costa Blanca, 13 years ago.

Now her local council is about to decide how land in her quiet road will be divided up. If her property is “urbanized” should does not have savings to fight the council in the courts and would have to accept “compensation” which would be well-below market price.

“I don’t have any savings to fight this in the courts and would have to sell up and lose my house. We have all this stress but this is what I moved to Spain to get away from,” says Richards.

“I have heard from a doctor that others are falling ill because of the worry this is causing them.”

Ranger, 64, a retired printer from Brighton who lives with his wife Pauline in Pinomar, on the Costa Blanca, was faced with a demand for EUR 18,000 for work carried out by a developer.

After checking papers which said more than 50 percent of householders in the area had agreed to the work, Ranger discovered many signatures and passport numbers were forged.

Ranger, a member of a protest group, has complained to the council.

“It is stressful but fortunately I am one of those people  who will say I am going to fight back.”

Ironically, the urban planning law was passed to crack down on speculators who were holding onto pieces of undeveloped land in the hope that the land which they would sell on later at a higher price.

However, critics claim, developers will often buy cheap, undeveloped rural land that gives him more than 50 percent ownership of a sector designated for urbanization, the remainder of which comprises other people’s homes.

He will then submit an infrastructure plan to the council that receives quick approval because he can accurately tell the town hall that there is majority consent for the project — the majority being the developer and few, if any, other owners.

But if Ranger’s example is anything to go by, these may simply be forged.

The town halls are often happy to approve the plans because others pay for the urbanization and it allows them to incorporate the land into their towns. It can widen their tax base and allows more development.

The builders profit in two ways: from the work they carry out and from the rise in value of their previously undeveloped land.

Perhaps unsurprisingly, Ruben Pérez Castellanos, who runs a building company in Benissa, does not agree with the homeowners’ version of events.

He says: “There are two sides to the coin. One side says, ‘I’m an owner and I don’t want to know about paying for infrastructure.”‘

He added that it “never happens” that projects proceed today without the consent of owners of most of the land in a sector designated for urbanization.

The Valencian government has presented a draft of changes to the law, due to be passed in October.

But Svoboda says: “It would give two months to appeal, but the terms are much more complicated so it is basically the same law.”

However, one factor which might make the Valencian government change their mind is the affect it is having on the property market.

A recent report from Barclays Bank which said four out of every ten new homes on the Spanish coast were bought by Britons.

But Ranger claims buyers are staying away.

He says: “A bank manager I know told me he used to approve four or five mortgages for foreigners each week, but now is only agreeing one every two weeks. People know about this law and don’t want to get caught out.”

Abusos Urbanísticos No! appears to be succeeding on other fronts.

The central government has ordered compensation to be made at fair market value for confiscated land. Due to Spain’s federal structure, however, Madrid’s power to influence activities in the regions is limited.

Manuel Latorre Hernández, head of urban planning for the Valencia regional government, accepted that homeowners had encountered difficulties.

But he claimed these “do not mean the law is bad, even if it turns out on occasion not to have been applied well by some ayuntamientos”.

“You have to take into account that this law grants much authority to ayuntamientos to determine the course of their urban development,” he said. “Staff often do not have adequate means to study deeply all the documents submitted by urbanization agents.”

Despite being presented with the catalogue of alleged abuses, Latorre insisted the law “has generally produced very good results and has been copied with certain modifications by other regional governments.”

For those affected

Abusos Urbanisticos-No (No Urban Abuses)

The group has been campaigning against the so-called ‘land-grab’ law. The group, whose president is Charles Svoboda, is made up of both expats and Spaniards. See www.abusos-no.org

[July 2004]

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Subject: Land grab law, Life in Spain