What is LRAU?



It is a law ratified in 1994 to release land for development for social good. Initially the Law was drafted with good intentions. One of the fundamental powers it bestows is expropriation – compulsory purchase, of property and it is here where the abuse occurs.

LRAU ONLY applies Rustic Land. If you live on urbano land you will not be affected.

Development in Valencia and the role LRAU plays.

The Valencian economy has thrived on Agriculture, textiles, ceramics, fishing and shipping. However, recent years have seen a dramatic reliance on tourism and construction. Fuelled by foreigners seeking a “cheap" place in the Sun, a boom has taken place to the detriment of these industries. The textiles industry is facing stiff competition from cheap Chinese imports – witness reports of €70M textile imports into Valencia and in Elche demonstrations held against the import of cheap Chinese shoes.

The Citrus industry is under threat from the introduction of a Golf Law wholeheartedly welcomed by the Valencian Government – although its existence was emphatically denied by Rafael Blasco until his own office leaked a report.

So what?

Coupled with LRAU brings the threat from costal areas inland. Why – because there is little land to site a golf course by the coasts. Where do the developers look to build?

The law gives carte blanche permission to build golf courses and adjoining urbanisations. It makes it possible to use rustic and protected land for this "high social purpose", which is of little interest to property owners and local population.

Town halls have proven financial incompetence - Valencia in debt €10Bn and growing €500M annually and these very offices will be given more powers to fill their ever decreasing coffers.

More seriously – town halls have proven to be corrupt - in Pego the former mayor has been imprisoned and the mayors of Javea and Fleix have been reported for reclassifying land which they owned a substantial amount.

Conflict of interest?

Is it not worrying the very people who have shown such dereliction of duty are given more power to abuse their electorate? What is a “poor" town hall to do? Little money, rising debts, declining tourism and dying industries. The quick fix solution lies in re-classifying agricultural land - suitable for building. Once reclassified they expropriate land.

Inland we’re all right – aren’t we…?

Think so?

Where could you place a golf course?

Take a look at the greenery around you. How long before you’ll be looking at the first tee from your new apartment, involuntarily swapped for your nice house and beautiful orchard?

There are plans for a further 67 further golf courses and already 30+ are awaiting approval. Where will they go? Should the construction industry fail, the Valencian Economy will falter, with dire consequences.

The government have a vested interest and absolute need, to promote development and overcome the resistance of owners who believe the land is theirs. Shouldn’t they realise the community benefit and make their "social contribution", even if the beneficiaries turn out to be developers and town halls

Who are the main players and how do they benefit?

1.Town Hall – Benefit from building licences & more local taxes

2.Generalitat of Valencia – Building and sales tax

3.The Developer – exceptional profits. The more owners are charged the more profit, setting aside prime land and selling it

4.The Owner – Increase in value after urbanisation compensates for lost land and fees paid – well it does if you believe the Hype. But what if the land owners wish to remain? – How do they benefit?

The Process – how it should be

•The Town Hall need more land

•The Owners informed about plans

•Permission requested from Valencia

•Valencia order a feasibility and Environmental study

•Permission granted to Reclassify

•Town Hall inform Owners & announce plans for invitation to tender

•Winning Developer selected based on price, ability, solvency etc

•Plans announced to Owners who have an opportunity to respond

•Owners can present alternative plans

•Owners presented with bill and how much land they will lose

•The urbanisation proceeds

What actually happens?

In most cases the above procedure is completely ignored - owners are told once the plans are approved and have 18 days to respond. Many are absent or don’t speak the language, so don’t know until it’s too late. Town Halls make no attempt to inform the owners.

Environmental impact studies are seldom conducted leading to water shortages, immense traffic and parking problems, sewerage and rubbish.

EU contract law is continually flouted. Town Halls Don’t announce plans for competitive tender. No competition = high cost.

And the social benefit? oh yes green areas, new shiny town offices, police stations – to deal with the influx of new residents, who’ve paid a tidy sum to developers who profit with Town Halls.

And the owners. Why should anyone care about them – weren’t they daft enough to buy rustic land - who cares if every law to protect them has been broken.

We all should because doing nothing helps promote the abuses.

What Abuses?

1.Consultation

In any civilised country the land owners are consulted. A basic right? A right overlooked and ignored in Valencia.

2.Feasibility and environmental impact study

Few projects have a study and where carried out it is questionable they are indeed factual.

3.Notification of owners

These typically are non resident foreigners and no attempt is made to contact them because a challenge would hold up the project. Where attempts are made, contact details are out of date – and it really isn’t in their interests to identify owners

4.Invitation to tenders.

Typically a developer initiates the process and applies pressure on town halls, in terms of social benefits and inducements

5.Expropriation of land.

The town halls have the right to steal – lets not mince our words, this is theft – land. They take up to 70%

Let’s say we agree development is a good thing and we don’t mind losing land – or paying a bit for the urbanisation. But 70% of your land building roads and infrastructure - that’s a lot of roads!

Where does this land go?

I was given some facts about a local urbanisation and was told 10% was for roads, 10% for green areas, 10% for public use. I am no mathematician but thats 30%.

The landowners lost 40% in total. So where did the other 10% go? This is a typical urbanisation - if 40% is enough why do others need an additional 30%.

Think about that for a moment.

Many mayors and promoters become VERY rich afterwards. How lucky to have so much land in an area being urbanised. I wish I had their foresight.

6.Urbanisation fees.

To add insult to injury the owners who have lost 70% of their land are presented with an urbanisation bill. At an AUN meeting in Benissa, I met a Lady who told me she had a house and 1000M plot. The developers took 700M leaving her with 300M. Not enough to keep a house – she needs 800M so she must buy back 500M of her OWN land – which she cannot afford. She is presented with a bill for €200,000 for an urbanisation she neither wants nor benefits from. But land she has is worth about €225,000. She may be lucky and come out with a 2nd hand caravan – so why complain? What did she do wrong?

She bought a plot of rustic land.

CRIME of the Century!

Hold on, surely this counters the argument that a benefit to owners is their land is worth more afterwards and the increase compensates the losses.

In what way has our lady benefited. If she is lucky she’ll sell her land – but who’ll buy it. The developers – at a knock down price because its no good to anyone else. This will pay the urbanisation fees. Where is her benefit?

We live Inland – we’re safe

Most recent cases have been in such places as Javea, Calpe, Altea, Benissa, Moraira. Hey you know what – that’s miles away – its not going to happen to us.

Here’s a secret.

From the list of towns affected at least 30 are Inland. Places such as Pego, Alcoy. Pedreguer, Villalonga, Albaida.

If you think it won’t happen to you – think again.

Not all Town Halls are the same. There are some conscientious Town Halls and public officials but they are the exception.

What is the EU doing about it?

In May 2004 the EU sent a delegation o the Valencia to see what the fuss was about. They came in response to a petition raised by Charles Svoboda (Petition 609/2003) and spoke to a number of people affected able to give first hand accounts of their plight. They reported their findings and the recommendations of this report are

•A moratorium should be decreed on any proposed new land developments in the Valencia region until the existing legislation is adapted to conform with European legislation and the fundamental rights of European citizens to their property.

No such Moratorium has been entertained by the Valencia Government. .

•Consideration must be given to an appropriate level of compensation for those people who have already had their property confiscated or destroyed and been denied due process.

No such consideration to owners has been given before, during or after. Cases are still being reported.

•The Valencian authorities have the responsibility, and therefore should be obliged to document such cases and each one should be assessed on its specific characteristics.

Yet the Valencian Authorities have done absolutely nothing on this issue.

A new delegation came in May 2005 and spoke to those directly affected. This time attended by Michael Cashman, MEP, Ms Janelly Fourtou, Rapporteur & Ms Maria Panayotopoulos. They interviewed 100’s of people affected and met Snr Blasco (The minister responsible) and Snr Camps (President of the Valencia Community).

I recently spoke via email to Michael Cashman MEP who said that the EU has drafted a report which they will be submitting to the Valencian Government. He mentioned the EU cannot impose a moratorium – even though he fully acknowledges that local governments are abusing the rights of EU citizens.

Even though the EU know the law is being flouted they are powerless to do anything.

The Valencia Government is in the process of changing LRAU and replacing it with LUV (Ley Urbanistica Valencia). A new law it may be but it is riddled with problems leaving it more open to abuses than LRAU. A point Michael commented on when he said:

“The new replacement is frankly not good enough. It needs to be amended as it doesn't take on board the EP'S (European Parliament’s) concerns!"

More worryingly was his reply that the EU, “Cannot ensure any further abuses. But can constantly monitor the situation and take action under EU law and treaty obligations (ECHR). “

Which begs the question what can we do if the EU cannot help us? It appears developers and town halls have time on their side – even if the EU can do anything - in Michael’s own words

“Process of law is unfortunately extremely slow even when it comes to abuse of EU laws"

In other words it takes such a long time for the EU to act that developments will have been long built and the companies long abandoned before anything can be done – and how do property owners seek redress? The answer is basically you are stuffed.

Is it all bad News?

Help is at hand in the form of a guardian angel. At the meeting on 20th September Hugh Robertson, a representative of the Law firm Irwin Mitchell, responsible for bringing large group action law suits, announced that his law firm had agreed to take on cases to the European Court Of Human Rights on a no win no fee basis.

ECHR usually only accepts cases which have exhausted legal procedures in their own country, but as Hugh stated, because this is practically impossible in Spain, he is confident these cases will be accepted immediately. The hope is that enough cases will be collected to provide a broad spectrum of abuses such that punitive damages may be obtained and urgent orders given to stop Land Grab activities whist the cases are heard.

This is great news because town halls may think twice about granting permission – especially if they may be liable to heavy fines – something which will hit the town halls hard and dare I say it the politicians personally.

It is also worth noting if an urbanisation is granted which hasn’t gone through due process then the town hall are held responsible for any damages – and the Mayor could be held personally liable, something which will hit his pocket. That may be enough to think twice about granting such permission.

How do you ensure you aren’t affected?

Very simply – don’t buy rustic land. Period! If you then don’t cry if you fall foul of LRAU. And DO NOT believe anyone who tells you it will never happen. It may not but will you take the chance. Even insurance companies will not give guarantees of title rights – something obtainable even in most 3rd world countries – but not in Valencia – this speaks volumes.

Is it worth investing in the Valencia Region?

The Valencia region, for all its woes, is a great region to live and/or own a holiday home. Whilst abuses have affected many, for everyone affected there are thousands more who have bought without problems. The region is still undergoing property rises – albeit slower than before but still a respectable 5-7% per annum. Providing you invest your money wisely and only buy an urbanised property your money should be safe.

So the advice is simple.

•Only buy a property on Urbanised land

•If buying a building plot ensure it is urbano, has electricity and water and sewerage

•If you buy from a developer – Ensure the land is legal and correct licences have been obtained

•Always take legal advice and use an abogado – regardless of who tells you otherwise

•Never believe anyone that tells you an area will never be a problem

•Check everything you are being told opinions are not fact

Summary

LRAU and its replacement LUV are an affront to human rights. Many have been affected and these cases are being highlighted in the EU courts, so hopefully one day the Law will be replaced by a much fairer one. Until that time you can ensure you don’t fall foul by only buying urbanised land using correct legal advice.

Special thanks go to Charles Svoboda and Jan Richards of the AUN http://www.abusos-no.org/

Also to Michael Cashman, MEP for West Midlands, www.michaelcashmanmep.org.uk.

If you have been affected or suspect you might be then contact either the AUN Irwin