A "Snapshot" view of the new Valencian Land Law-the "LUV"
Just going quickly through the new LUV as adopted (now available on the website of the Valencian Government) on December 22nd, it seems that Mr. Blasco, rather than the Grinch, is the one who stole Christmas. This is the sort of "gift" that should be able to be returned. Alas, rather than take the opportunity to change the nature of the land laws here to protect the rights of property owners, which would clearly be in the medium to longer term economic and social interests of this region, while being able to "blame" the EU for forcing their hand, Mr Blasco and his department have opted for continuing the quick and easy route - fostering rampant development at any cost, and the predatory practices that have gone along with this. Basically, they blew it, as Mr. Blasco’s political opponents here have been quick to point out. Many have called on the Conseller to resign - or for Mr Camps to fire him. Probably neither will happen, but he may well be moved to another cabinet position in the run up to the 2007 regional elections.
Although the Conseller frequently promised such features as an end to the promoters' ability to use the "notarial" path to present PAI's directly into the
DOGV, nowhere do I see where this practice is to end. The concept that there should be a legal separation between a promoter and a constructor for any given project can easily be got round by what is already a standard practice, that is , the establishment of false front companies, just as is the case in Benissa with at least four of the PAIs.
One new element is that all PAIs involving more than 50 hectares of land will need to be reviewed by the Consultative Judicial Council of Mr Blasco's department. That body may have some influence, but it is merely advisory. It was the one that warned the Conseller some months ago that in many respects the LUV, as it was then drafted, would be in breach of EU law. Judging by the final text, much of that advice was ignored.
When there is a chance to examine the law through more expert eyes, it will be possible to determine if our preliminary analysis is correct. The pre December 22 vote promises - as regards what the new LUV would bring us - were essentially gutted. There are several paragraphs as regards the "disposiciones transitorias"-or transition provisions from the old law to the new one - in fact to the three new ones - the LUV being only the most recent. They do not make it very clear which of the hundred plus development schemes or Golf courses will be termed as ‘under consideration’ and thus covered under the LRAU. At the very least, a lot of disputes will arise over this question alone.
In sum, from the property owners' perspective, the LUV gets the thumbs down Property rights basically get no more protection than before. Ownership is still hostage to the whim and greed of developers and town halls, and this is defended as some sort of "social benefit" when it is basically at heart just money for the promoters and their allies. How the Valencian Government can expect to trumpet the LUV as the "best and most European" of all land laws and thus persuade potential buyers that all will be well for them, must be another exercise in self deception. If I were in the Valencian Government right now, I would be very worried about what we see in recent issues of the El Pais newspaper and other journals about the critical water situation and recent reports concerning the degree to which the government, the banks and households are financially overextended. That should suggest a policy of tightly controlling further construction, but my bet goes the other way, given the rotten shape both the industrial and agricultural sectors are in here. The National Tourist Association, Exceltur, a few days ago issued a scathing report on the damage that overbuilding here has had on the key "quality" tourism industry - and even the short stay business is in trouble to judge by the depressed figures that were released over the Christmas period
Basically, this new law is not what the world is waiting for in terms of correcting the policy failures of successive governments here, whatever political stripe they may have been. In itself it is not going to be the spark that will encourage hordes of foreign buyers to stump up "first world prices for third world services and underworld practices" as someone said. It still leaves the field open to developers, and is clearly designed to permit, if not foment, more land grabs to fuel the main "motor" of the Valencian economy, endless construction. Without virtually free land development at the cost of hapless property owners, profits, after all, might fall to just reasonable levels instead of providing the developers and cash strapped town halls with the new "El Dorado" or “Midas Touch” with which we are all too familiar here. So much of the incentive to cover the region with "Grey Gold" – concrete - might be lost.
Firstly, the LUV only meets some of the suggestions made by the Valencian Ombudsman or Syndic de Greuges - disregarding perhaps the most key ones he put forward more than once. Notably there is still no definition of either “Social
Interest" or "public benefit", which are used to justify the "land grabs".
Second, the so-called "Charter of Rights" for property owners is almost exclusively a list of their obligations. The rights go to the developers, who still do not need to own any land in order to propose plans, which affect many often-unwitting property owners. The only minor concessions to property owners are when they might want to become developers themselves, which understandably very few came here to do, or need. Even then, this process is made more complex and costly.
There is no definition of "Consolidated”, or "semi consolidated" properties - at least that is workable. The full or partial exclusion of such properties upon which legal structures stand, was supposed to be a major aspect of the protection offered property owners under the LUV. But it seems again left to the whim of the town halls. And that will seriously affect how much land or money is to be demanded and what has to be paid. Notification of plans that would affect property owners is no better than the LRAU, depending on the parlous state of Cadastral records, which have a deservedly bad reputation.
So there being no more time given to lodge allegations or present alternatives, the absence for now of any arbitration mechanism or " Reglamento de Gestion", our overall balance on the new law is that it is probably going to be as bad for property owners as the LRAU was in most respects. The short notice time is something that disproportionately affects foreign property owners, given that they are often absent for lengthy periods of time, and don't understand the implications of whatever notice they may actually get, if it arrives at all. Many still simply cannot believe that whatever they have purchased, believing that it is theirs until they chose to sell it, can be grabbed from underneath them, meaning that property ownership can be more of a liability here than a benefit. The more property and the better the view, the truer this may be.
The LUV does not even meet the very low expectations we had based on the promises that Mr. Blasco has repeatedly made over the past two years. The only time extended- is that in which "victims" of the new law (Mr. Blasco will no doubt again label them as "Beneficiaries") will have the Hobson's choice of paying unregulated and doubtless exaggerated development costs in hard cash or undervalued land. The condemned can thus choose the firing squad or the noose, but are not supposed to challenge the death penalty. Both the Conseller and Mr Camps have admitted that the LUV will not comply with EU law, so there should still be room for fireworks from Brussels in the form of Court of Justice proceedings. The fact that the LRAU will still govern plans that are in progress by itself should guarantee that anyway.
The few plusses that we see are first that it is a new law, so it will take developers a while to adjust to it, even though the fact that the promoters and constructors have welcomed it (just as they rush to get their PAIs under way as fast as possible while the LRAU still applies) suggests that this will not be so difficult, given that all the underlying principles they have cherished for the past decade under the "Socialist" LRAU will remain intact. Second, as it appears, as from when the LUV goes into effect all new development plans (PAIs at least) will need to be presented in the Official Bulletin of Europe. This should imply a commitment to all relevant EU laws, not just those on public contracts ( procurement) but also for the environmental and property rights. That remains to be clarified, and it will probably take some court challenges to do so.
We are aware that some are looking at the possibilities of either challenging the new law through the courts while that is possible. It would be possible for the Syndic to undertake this, but I do not know whether he is currently contemplating that option.
We hope to have a more thorough analysis of the LUV in a week or so. But, like its predecessor the new law is very long - probably over 150 pages in the final version, and internally complex. Explicit references to the Spanish Constitution, EU and national laws that might serve to protect property owners are notably absent. The language is the usual turgid, overwritten, legal verbiage with some sentences, full of subordinate clauses and modifying phrases, running to 50 words, and with some paragraphs that are over a page long! Not easy to analyse. Maybe that's why Mr Blasco and his department did not perform that nicety when the law was about to be passed! The only "authoritative" article, albeit very short of specifics, from the Government side was the one by Pedro Grimalt the Conseller’s Director General for ‘Urbanismo’) in a recent copy of the Levante EMV newspaper, just above the piece from our association. It is clear that the main motive for the rush to pass the LUV was not the pressure from the EU, but from the promoters and the constructors who were very upset at having any land at all held back from their grasp. Mr Blasco had promised a very limited moratorium as regards land that would need to be reclassified, until the LUV was approved.
Despite the dismal view we have of the new law, we still have the local and European courts to turn to, and an increasingly watchful European Parliament and Commission. So we have some good things going for us as well.
