Legal eagle in Spain

Country:  Central, Other Spanish Places, Spain; Other Spanish Places, Spain; Spain

9 July 2008

Independent legal advice and due diligence are crucial when buying a property overseas. For those UK property buyers looking at property for sale in Spain, the International Law Partnership looks at what it says are the four key legal issues surrounding the safe purchase of Spanish property.

This includes land grab laws, Ley de Costas Coastal Law, illegal planning permission, building in excess of planning permission and failure to secure planning permission.

Ley De Costas
This pertains to how close a property can be built next to the sea. It was introduced in 1988 and states that properties should not be any closer than 100 metres from high tide.

This has been ignored over two decades and only recently become an issue.

When buying a property that is close to the water, visiting the property yourself and hiring an independent lawyer can easily avoid this situation.

Valencia Land Grab
The Valencia land grab laws were a result of legislation introduced to prevent individual owners of rural property impeding developments that would benefit the community as a whole such as the improvement of local services, access to affordable housing and new infrastructure as new roads, sewage and mains water. In addition, it was recognised that the value of the rural properties would increase and the law required these rural owners to contribute either cash or land, whether or not they wanted this to happen.

Unfortunately, Valencia was one region of Spain that drafted the law poorly which created a window enabling local authorities and developers to exploit the interests of property owners, particularly those in costal regions where property is in short demand and the cost of property is high.

Anyone who is intending to buy property in Spain, particularly along the Valencian coast does not need to forget their dream home – employ the services of a good independent lawyer, particularly one with a experience in Spanish property to guide you through the process.

Illegal planning permission
This situation arose when illegal payments to officials were made in return for planning permission. This is highly damaging to the property industry in Spain.

Lack of planning permission
This is happening less and less in Spain but is when developers start building without having applied for planning permission. Again, your lawyer can easily spot this.

Building in excess of planning permission
In some cases, properties have been built with additional rooms or different sizes from that stated on the application for permission. A lawyer checking the original request for planning permission and comparing it to the physical product can easily spot this.

Solutions
There may be a number of solutions - some more pleasant than others. In some cases, an example has been made and the house in question has been demolished.

In other cases, the authorities have chosen to do nothing or have enabled the owner to use the property for their own use in their lifetime (but can’t be sold or inherited upon death). In some instances fines or penalties could be issued.

This is potentially a very volatile issue and a hot political topic. The authorities are constantly threatening to tear down illegally built homes. However, it would be considered political ‘unsound’ to tear down a town of 5,000 homes built to close to the shoreline. This represents quite a lot of votes!
 
For many UK investors, Spain remains a desirable location. Many UK property buyers have an affinity with the region having spent previous holidays there, see it as economically and politically sound, cheap to fly to, sunny.

Like most markets, Spain has recently experienced a substantial downturn and for those who bought at highly inflated prices may experience trouble in making a profit; there are bargains still to be had for those now currently considering investing in Spain.