Valencian Land Grab - The LRAU Law

This law was passed in 1994 with the intention of facilitating the development of the Valencian Community in terms of construction.

The law was designed to assist in the development of the region by allowing developers and the government to compulsorily purchase land for developments that 'improve' the region such as roads or new housing developments. The person wishing to develop the land would simply check at the land registry to find the current use of the land. If the land was registered as barren or farm land the developer would buy the land directly without asking the owner and commence building.

The law has been successful in many respects. However, especially in recent years, it has been abused by some developers and has caused huge distress to people who have had their land expropriated with little compensation and/or have been obliged to contribute large sums to neighbouring urbanisation infrastructure costs.

The problem arises as land is not registered properly or a property is built without being registered correctly and/or without correct planning permission.

In the period up to 1990, most foreigners bought some land and built their own house. In the Valencia region a great number of illegal urbanisations exist, land developments without any planning approval and without the infrastructure foreseen in the national law on urbanising. It is estimated that 2/3 of the developments from this period and in this region were done outside the law. One of the main reasons was that most of the smaller coastal municipalities had no general plans, and without a general plan could not be
approved an urbanisation plan.

Unfortuantely this illegal building still continues today on new developments and obviously still affects the older properties.

At International Mortgages 4 You, we understand the LRAU laws and the way that it affects our clients. As discussed in the section "How to check that the property is suitable for a mortgage" the safest way to purchase a property in Spain is with a mortgage.

To learn how to avoid the problems of the LRAU law please click here for our nota simple checking service page.