The following is a statement from FOPDAC ( Federation of Overseas Property Developers, Agents and Consultants):

There has been much scare mongering in the British press and on TV (Holiday Homes from Hell) of late, which although it has helped by highlighting an issue of relevance to some, has tended to sensationalise rather than properly inform. Headlines and quotes from angry ex pats have suggested that a cruel Spanish system is kicking people off their land completely or forcing them to pay for infrastructures they don't want and/or taking some of their land for private gain.

The majority of this coverage about the difficulties facing some British buyers of homes in Spain, relates to emphasis on those affected by a law that came into force in the Valencia region in 1994. In this document we clarify the general position and also how it relates to the vast variety of properties and locations throughout Spain. In brief, the issue revolves around three classifications of land - land already urbanised, land suitable for urbanisation and rural land. As in any country, when an area grows then rural land is sometimes re-classified by the local authorities as suitable for urbanisation (development).

A law was introduced in Spain to prevent individual owners of rural property in areas that have been re-classified standing in the way of developments that would benefit the community as a whole, by improving services or creating affordable local housing.

In recognition of the fact that the value of their property would increase significantly, the laws oblige these rural owners to contribute with cash and/or part of their land towards bringing in benefits such as mains water, sewerage, new roads etc., even though they may not want such facilities, preferring the old rural ways. Unfortunately, in one area of Spain the law was badly drafted, allowing a small number of developers and local authorities to exploit the situation against the interests of property owners, principally in coastal areas where land is in shorter supply and values are at their highest.

As in the UK, notices of intent must be published, but just 15 working days are allowed to present an alternative urbanisation plan or an objection. Since many landowners are absentee and foreign, this can cause a breakdown in the process. Firstly and most importantly, this particular version of the law only applies to the Valencian Community, i.e. the provinces of Alicante, Valencia and Castellón. In practical terms this means the Costa Blanca and the Costa del Azahar, plus their inland areas. The rest of Spain has different versions of the law and we have not had reports of any problems, although there qualified legal advice should always be taken wherever you buy. Secondly , the law does not affect anyone with an interest in property in an area already urbanised or designated as such. This represents virtually all apartments, townhouses and other linked properties, plus a large majority of villas.

The Spanish designation ‘urbanised/urbanisation' does not necessarily mean a complex with a pool etc. - most streets of detached villas are in such zones. Purchases in such zones remain unaffected, although buyers should still take independent legal advice.

There are nearly a million British people with an interest in a home in Spain. Only a small fraction could be faced with this problem. The large majority of owners of property in Spain have never experienced any significant problems in their many years of owning property there. Thirdly , these cases are not an anti-British campaign by the Spanish, the small group affected has Spaniards and other nationalities as well as British. Lastly , anyone who purchased and used the services of a good independent lawyer should have been fully informed as to any effect this law might have on them.

So, in summary, the use of a FOPDAC member company and independent legal advice continues to be the best way of protecting yourself when buying a property in Spain, no matter what the property or location. Beyond that, only those considering buying property in the area of the Valencian Community AND outside of an existing urbanisation (be it of apartments, townhouses or villas) need concern themselves about this particular law, although the same principals relating to advice apply wherever in Spain you wish to buy.
If you require any further information, please contact FOPDAC.

FOPDAC has now amalgamated with the NAEE.