Building and renovating in the countryside

There used to be a time, not long ago, when you couldn’t find a renovated rural property for sale in Spain. These days there is a much better choice of done-up country homes for sale, especially in the most sought after rural parts of Catalonia, the Balearics, and parts of Andalusia. Even so, many buyers of country  homes in Spain will find they need to do quite a lot of building work to lick the property into comfy shape.

The problem here is that many buyers overestimate the building permission they will get, and underestimate the costs of refurbishments (often on the advice of estate agents on both counts). The days when you could pick up an old Spanish country property to restore for next to nothing are long gone, and beware of anyone who tells you otherwise. Furthermore, restorations in the Spanish countryside are not cheap, and should only be undertaken with your eyes wide open and with the help of a trusted, local project manager or builder.

Building and planning permission in many of Spain’s rural areas is much stricter than it was, and harder to get than you might think.  It’s likely you will only get permission to refurbish an existing, registered dwelling rather than increase the footprint or build new. Given that most Spanish country properties will need new plumbing, wiring, flooring, damp proofing, plastering and painting, not to mention new kitchens and bathrooms, be realistic about your budget and get some quotes on the work from reliable local builders before you commit to anything. When carrying out refurbishments make a real effort to find a reliable builder as cowboy builders are an endless source of problems – get recommendations from people you trust. Note that many estate agents in rural Spain recommend builders who pay them a kickback, which drives up the renovation budget.

Planning and development risks in rural Spain

By J. Howell.

In Spain all land is categorised. For example, a piece of land could be classified as urban land (“urbano”) or rural land (“rustico”) – more accurately, for planning purposes, known as suelo no urbanizable . There are several other classifications that need not detain us here.

When buying property that is rural land or in a rural area there are always certain risks. Some occur in any country, others are specific to Spain . Keep a sense of proportion. Remember that tens of thousands of foreigners have bought land in rural Spain with no problems at all. A few dozen or hundred have been adversely affected by this law.

The Risks Buying Rural Land in Spain

The first risk is that the land around you will, at some stage, be reclassified as building land. Your beautiful open views will then become views over dozens of houses. This is not what you wanted. As in Britain , there is little you can do to guard against this risk. It is worse if you are near the edge of the present developed area or if your area has good communications and good views or other natural features that make it particularly attractive for development. I always tell clients buying land that the only truly safe assumption is that any land that is not presently built on will, at some stage, be built upon – whatever anyone promises! If you are worried about future development plans we can make enquiries to establish what development projects are currently scheduled but we cannot guarantee that a plan will not be lodged the very next day that will affect your home. The enquiries made will not even guarantee that there are no current plans to the extent that you could take action against the planning authority if something was not reported to us. Nonetheless, if the continuing rural nature of the locality is important to you it is probably worth asking us to make these enquiries as the cost is generally modest. If you would like us to make enquiries we will discuss the options available to you and the likely cost involved.

The second problem is that rural properties have often been around for a long time. This means that there has been plenty of opportunity for rights and obligations to build up in relation to the properties. Not all of these are obvious. Not all of them are recorded at the land registry. You should, therefore, keep an eye out for “suspicious” signs such as conspicuous pathways running across your land, lots of spent cartridges or other evidence of hunting on the property, signs of people extracting water from “your” stream etc. If you see anything of concern, draw it to your lawyers’ attention. They will then discuss what action, if any, can be taken to clarify the situation.

The third and most serious problem – is where your property itself becomes involved in the process of development.

In Spain when plots of land belonging to several people are re-zoned for development the local authority can deal with the situation in a number of ways. Often they set up a ” junta de compensacion “. This is a committee of all of the owners of the land concerned. It has the right to make key decisions as to the redevelopment, such as who will do the work, how it will be funded etc. As a member you may vote, but if your fellow owners outvote you then you are bound by their decisions.

Normally infrastructure works such as the construction of roads, electricity substations and so on will have to be undertaken. It would be grossly unfair if all of these were constructed on your plot leaving you with nothing and your neighbours to reap the benefit of the much higher value of their land as building plots. The junta will, in various ways, therefore re-allocate the land left over after the infrastructure works to make sure everyone has a fair share of the building land.

The owner of land forming part of a development plan has various obligations;

• To bear his share of the cost of any necessary works
• Use his land in a way compatible with the prescribed permitted use
• Give the relevant authority, free of charge, any areas that will be used for access ways, open spaces or for other public purposes
• Build within the design limits established by the plan and within the period stipulated in the plan

In return the owner will be entitled to benefit from the construction process in proportion to the other owners. There are several ways of achieving this. One is that the land ownership is simple redefined. If you had 10% of the original plot, before roads, schools, electricity substations etc were separated from it, your boundaries would be modified so as to allocate you 10% of the available building land after all of the ‘dead’ land has been accounted for.

If you do not want to take part in the redevelopment project your choices are really limited to:

• campaigning against the plan before it is passed
• selling up at once – either to your neighbours or a third party – and using the money to buy somewhere more remote
• going through with the redevelopment and then selling your building plots. This will usually be for much more than you could get for the undeveloped land.

Any property that was on the site before the plan was passed can remain there, unless it is needed for roads etc or the public good – in which case it can be compulsorily purchased. Even if you can keep your house, however, you will not be allowed to extend or improve it. In practice it is seldom possible for you to remain in your house on your plot and permit the building work to go on all around you.

This system is very different from the British way of developing land but it generally works reasonably well.

The rules as to the development of land are one of the areas which, under the Spanish constitution, are delegated to its autonomous regions. In the region of Valencia special rules were passed in 1994. This is the (now) infamous LRAU ( Ley de Regulación de la Actividad Urbanística ). This law was intended to encourage the development of what was then a backwards area where little development was taking place. In that it was very successful.

Unfortunately, recently – in the last 2 or 3 years – greedy and unscrupulous developers have found a way of abusing the position. Equally unfortunately, the region of Andalucia (which covers the whole of the Costa del Sol ) has decided to introduce similar changes.

Under this law the town hall has the right to permit a developer – who may have nothing to do with the site – to put forward or ‘facilitate’ a development plan and appoint him to coordinate and promote the development. Although, in theory, the local residents are protected in various ways this can lead to abuse. The developer can acquire relatively small holdings in the area in question and can often dominate the process, twisting the decisions made to his advantage. For example, if the junta votes to fund the development itself rather than to seek bank finance then anyone who cannot pay his share may find his land being compulsorily purchased for its basic value as rural land – much less than it will be worth once the works have been undertaken. The expenses of the infrastructure can be inflated. His friends can be awarded key contracts.

Many successful and fair developments have been carried out under this law but there is no doubt that it is open to abuse. This is recognised by the Valencian government, whose public works committee is proposing significant improvements in the law. The British ambassador to Spain and the local British consul have expressed their concern. The law, as it stands, has been challenged as unconstitutional and this case will eventually be heard before Spain ‘s Supreme Court and, probably, the European courts. There is case law to suggest that the challenge will be successful. More extensive proposals for reform are also being made. This is all likely to take several years. In the meantime, what should you do?

• Buy a home that is already classified as urban ( urbano ). This problem only affects land currently classified as rustico (rural) – or (possibly) adjacent to rural land. Quite a lot of property in rural areas is in fact urban land. Some land in areas you think of as urban might still, technically, be rustico . Get us – or your lawyer – to check the position.
• If you are buying a home in a rural area always check to see what plans already exist. Your lawyer will be able to do this for you. The extra cost will be worth it. As already mentioned, this does protect not you completely as a plan could be submitted the next day. Again, as already mentioned, the risk is worse if you are near the edge of the present developed area or if your area has good communications and good views or other natural features that make it particularly attractive for development.
• Contact the pressure group: Asociación Valenciana en Defensa de los Derechos Humanos Medioambientales y en contra de los Abusos Urbanísticos (AUN)

There you will see up to date information as to the situation – though be aware that some of the horror stories are from people who seem to be confusing various issues. Much of the press coverage is, as ever, exaggerated and/or one sided.

If you remain worried, buy somewhere else. This law only applies in the region of Valencia and, potentially, Andalucia.. Then write to the governments of Valencia & Andalucia to tell them why you have not bought there!

If you already own a home that is threatened by this problem the most important advice is to act quickly and not to stick your head in the sand. Swift action can protect your position. Delay can be fatal. See your lawyer AT ONCE.

Buying into a development where major improvements to streets, lighting etc are required

If you buy into a development which, over the years, has fallen below current minimum standards. For example, the roads may be less than the minimum permitted width or they may have no street lighting or they may not be surfaced. In this case the municipality may insist on matters being brought up to scratch. You might not want, for example, street lights, but if the town hall says you are going to get them then get them you will. If the law requires street lights they will have no choice but to put them in. If the street lights are not strictly obligatory then lobbying by the residents can affect the decision. If they do have to be installed the way of dealing with it is different from the system in England . Here, generally speaking, where such improvements are needed they would be undertaken by the local authority and thus fall to be paid for by all of the council tax payers in the area. In Spain they will be paid for by the owners of the properties affected. This means that most years your council tax bills are very low – you are not paying for improvements to other people’s property – but sometimes you may have to pay out quite a large amount. The payments for works of this kind tend to be quite large but not huge (say £5,000 to £10,000 per property for a large project). The municipality can also compulsorily purchase such parts of your land as may be necessary to implement the improvements – for example, taking a metre off your garden to permit a road to be widened. The silver lining in this cloud is that, once the work has been done, the value of your property usually increases.

Estate agents in rural Spain

One problem for foreign buyers lies in finding a good estate agent to deal with. Spaniards generally buy rural property through word of mouth or local dealers called corredores who typically charge 1% of the agreed price to each party. Foreign buyers, on the other hand, usually run the gauntlet of dealing with the new breed of out-of-town estate agents that have sprung up in Spain’s emerging rural destinations.

The Spanish countryside used to be the wild west for out-of-town buyers, but things have gotten a lot better in recent years. Even so, foreign buyers tend to end up dealing with foreign agents some of whom may have not been in country long, and don’t really know what they are doing. It is quite common for expats to drift into property sales for lack of professional alternatives.

Many estate agents and brokers selling Spanish country property are just as good as their urban counterparts, but the business does have a recent history full of horror stories. So, just to be on the safe side, look out for the tricks on this list that have known to be played over the years by agents or people posing as agents in rural Spain.

• Listing properties online that are not available for sale, or below the vendor’s asking price. This is what I call ‘web bait’ and it is used to lure buyers into making contact and arranging a visit. When the buyer does indeed visit they are told that the vendor has just put the price up or the property has just been sold. Some of these agents will even take a deposit from buyers without any power to sell the property.
• Misleading clients into believing that the rural property they are buying has correct title deeds. As often is not this is due to incompetence. The estate agents can’t understand title deeds in Spanish, so have no way of knowing that land is included with the title, and what dwellings are legal.
• Defrauding buyers into thinking that a property has more land than is the case. Some agents will intentionally deceive clients into thinking that the property is bigger than it is. It is very easy to point to a distant hill and say ‘that is the boundary’ whilst it is much more difficult for buyers to discover where the actual boundary lies. Buyers have to be able to interpret the deeds and cross reference these with the plans held at the catastro (in the town hall) to find out what they are actually buying.
• Misleading clients, intentionally or otherwise, into thinking that new building or refurbishments can be carried out when they can’t. For starters never buy land in rural areas on the assumption that you will be able to build a new property there. This is almost certainly not the case. Unless shown planning permission from the town hall, which your lawyer confirms as genuine, you should assume that all offers of plots for building on are a scam. Tread carefully with refurbishment projects too. It is likely that you will be able to refurbish an existing dwelling (if it is legal or can easily be legalised), but it is unlikely that you will be given permission to increase the dwelling’s footprint. So you will have to work within the built area that already exists. However if you know how to charm the municipal architect and present an attractive plan in the right way, you may be able to increase the footprint by up to 20%, but don’t count on it.
• Making false claims about access to utilities, or the costs of installing access to utilities.
• Massively understating the true cost of refurbishments, and then recommending builders who add 5 to 10% kickback commissions onto the budget.

Buying rural Spanish property is a complex business that requires help from genuine experts if you wish to avoid serious problems. This is not due to any sinister intentions on the part of rural vendors towards foreign buyers. It simply reflects the fact that traditional methods of exchanging rural property in Spain can create a legacy of title deed and boundary problems, and that issues such as refurbishments, mortgages, and access to utilities in rural areas can be a headache if not dealt with in a knowledgeable and timely way. In other words, take extra care when deciding whom to deal with when buying a home in the Spanish countryside.

Other issues to look out for

If you are looking for rural tranquillity and birdsong then it helps to buy a property with an existing connection to the electricity grid. If not you will might go mad listening to the sound of your generator, assuming green energy sources can’t provide for your needs. Arranging for a connection to the grid can be a crushing experience in time and money.

Access to water is critical issue. Few rural properties in Spain are connected to the mains, though this is not usually a problem as one can easily get by with a good deep well in all but the driest parts of the country. However it is essential to look into the water situation before buying, as trying to live in a rural property without water will send you round the bend.

Another thing to bear in mind when buying a country property in rural Spain is how you will fit in with the local community. This question is especially important if you plan to relocate to the Spanish countryside on a permanent or semi-permanent basis. A few wise and experienced words from Rita Fryer who spent many years helping people buy in the countryside will help illustrate the importance of this issue:

“An important issue I would like to bring people’s attention to is the astonishing attitude that many have when they buy inland. The first wave bought inland because it was cheaper but still expected to find the same tolerance to all day pubs and sloppy flip-flop attire that one finds on the coast. The norm on the coast causes a lot of offence to the more conservative country people. The inhabitants of these little villages resent the appearance of the English cafe offering afternoon tea where no one speaks a word of Spanish. It makes them feel foreign in their own land and they, quite naturally, turn their backs on this type of newcomer. The Brits who buy in rural Spain must understand that their easiest path to happiness and acceptance is to embrace the local traditions themselves. You can find hundreds and hundreds of happily integrated Brits all over Spain and the key is involvement in their community. This is such an important point that it should not be overlooked.” 

Mortgage problems with rural properties, rights of way, hunting rights, land-grab concerns (in Valencia) and septic tanks are some of the other issues that need to be considered in detail before you buy. You might find your rural idyll in Spain but only if you buy for the right reasons, from the right professionals and with all due caution. Otherwise there is a reasonable chance that you will end up another distraught British buyer sobbing in a hotel lobby in rural Spain. They are not hard to find.