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LATEST NEWS ON LAND-GRAB (LRAU)
From the Daily Telegraph, International News, Sunday 12th June 05

"Spain to scrap 'land grab' law and compensate Britons who lost homes
Spain's notorious 'land grab' law, under which hundreds of expatriate Britons have lost homes on the Costa Blanca, is to be scrapped in three months.

Faced with the prospect of being hauled before the European Court of Justice, Spanish provincial legislators have pledged to redraft the property laws by September and work out a compensation package for homeowners and those who have already lost their properties.

The move is a huge relief to thousands of residents on the Costa Blanca, many of whom faced financial ruin after their homes were seized for far less than their market value.

Under a loophole in the law, known at the Ley Reguladora de la Actividad Urbaniste (LRAU), property agents could compulsorily purchase prime rural land by saying it was for urban development.

Owners were often ordered to contribute large sums for further improvements in local development projects.

After a long campaign by local and expat homeowners, the Valencian regional government has finally dropped its opposition to reform the law and agreed to speedy amendments supervised by a Spanish parliamentary ombudsman. A spokesman for Rafael Blasco, Valencia's minister for housing, said: 'The LRAU has a lot of problems, and the government of Valencia is working with the European Parliament to replace it with a new one by September.'

The apparent breakthrough was announced last week by Michael Cashman, the former East Enders actor who is now a Euro-MP and a vice-president of the European Parliament's petitions committee.

Mr Cashman, who led an investigation by Euro-MPs into the law last year, said that Spanish politicians had conceded that the law had been abused.
The Euro-MPs investigation found that the law had led to collusion

between corrupt developers, officials and lawyers, although its call to end the practice was initially ignored. Spanish officials are said to have had a change of heart after the European Commisssion threatened Madrid in April with huge fines unless it resolved the matter."

Note: the article ends with words of caution from Charles Svoboda, the former head of Canada's intelligence service who led the anti-land grab campaign. His view is that the Valencian government will bring a draft replacement law to parliament, but will keep procrastinating.. Meanwhile the existing law will remain on the statute books.

However, Madrid is certainly now taking notice.

Update August 06: As predicted in the previous paragraph, very little has been done. If you are considering buying property in the affected areas - principally the whole region of Valencia (map here) and Andalusia - please be very careful!