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ILLEGAL PROPERTY TRANSACTIONS IN MARBELLA THE LEGALISATION PROCESS

According to Marbella’s New Draft Town Planning Regulation, there are around 30.000 dwellings in the municipality which either have been built or are in the process of being built with illegally issued building licences. Basically, these were given in spite of the fact that they violated the 1986 Town Planning Regulation in force at present. The violations range from constructing houses on land not designated for building, for example in green belts or on land set aside for public facilities, to granting licenses in spite of the fact that buildings did not meet regulations or building codes, for example, building more homes or square metres on a plot than regulations allowed. Many of these dwellings have been completed and have been purchased by bona fide owners who have registered their title in the land registry and inhabit them. Now they have found out that they are illegal despite the fact that their solicitors had checked that the Land Registry showed the developer had a clean title and the latter had obtained a presumed legal building licence. Furthermore, in some instances the property even has a license known as the “First Occupation Licence” which is granted by the Town Hall and allows people to occupy their dwelling. Now some of these buildings are in danger of being demolished as result of court orders that declare their building licences null and void, and this has given rise to certain social alarm.

This situation has been reached by a number of factor. First of all, developers signed planning agreements with the Town Hall and were paying in exchange for building licences that the future Town Planning Regulation was supposed to support. The Town Hall had started working on that future Town Planning Regulation in 1992, however it was never approved by the Andalusian Regional Government (Junta de Andalucía), which must give its approval in order for any Town Planning Regulation to be legitimate. Secondly the chief of Marbella’s Urban Planning Department has committed a number of irregularities together with developers and some of the former Town Counsellors. These irregularities are under investigation and pending trial for those criminally involved in the so called “Malaya Case”. As result of this critical situation, the Spanish Parliament took an unprecedented decision to “dissolve” Marbella’s Town Hall and appoint an interim Committee until the next municipal elections. The Andalusian Regional Government in turn took over in planning matters in Marbella. The municipal elections took place on the 27.05.2007 and the Popular Party has won majority control of the Council. Immediately after the elections the Andalusian Government decided to give back the competence on planning matters to the Council and has given a draft of the town’s new Town Planning Regulation. The Council will examine same and will introduce the changes they deem fit in the document and will proceed for its initial approval.

The legalisation of illegal dwellings by the Town Plan.

The town’s new Town Planning Regulation can legitimately establish conditions that allow many of the buildings constructed with illegal building permits to become legally approved structures. The Town Planning Regulation can determine the conditions under which these buildings can be integrated in the new planning scheme. However, this capacity of the planning commission to legalise illegal buildings is limited in that legalisation cannot be gratuitous, with the sole purpose of avoiding court orders declaring the building licences null and void. This means that new green belts or public facilities will have to be guaranteed in the new Plan to replace of those occupied by illegal buildings, and compensations will have to be obtained from those who benefit from legalisation of their buildings in order to pay the costs of building infrastructure and necessary facilities.

It must be clarified at this point, that the objective of the legalisation does not mean that the new Town Planning Regulation will establish blanket conditions to permit all illegal buildings to be made legal. On the contrary, those developments which are incompatible with the objectives of the new Town Planning Regulation will not be accepted. For example, imagine a site has been set aside for public facilities in the 1986 Plan but now homes have been built on it. Imagine that in the new Town Planning Regulation it’s also been reserved for public use for a train station, for example. Now imagine that land for the train station cannot be obtained at a nearby location. In a case like this, the new Town Planning Regulation may declare that the illegally built homes are incompatible with the town’s plan. The buildings in a situation like this could only be subject to maintenance works but not to refurbishing or improvement works and may end up demolished by a court order.

For each particular site where an illegal building has been erected, the new Town Planning Regulation will determine the conditions for legalisation, if possible. Thus it is essential for the owners of property in this situation to at least have the initial approval of the New Town Plan as soon as possible to see whether their property can be legalised and also to see what the conditions to so might be. The Local Council has indicated that the new Town Planning Regulation will be initially approved in Autumn. It will then be subject to public allegations, followed by a further provisional approval once the aforementioned allegations have been dealt with and then finally definite approval by the Andalusian Regional Government.

What are the possibilities of owners who occupy illegal properties to carry out transactions with them?

Property owners in Marbella may encounter difficulties to carry out a straightforward sale because the purchaser may realise that although the property is registered and has the “first occupation licence”, the bank does not give a mortgage to acquire the property if it detects the property is part of illegal building project. However, this does not mean that one cannot obtain the same outcome by using adequate legal tools. The property can be let to the prospective purchaser for an amount similar to the proposed mortgage instalment. In parallel, a contract can be agreed to dispose of the property by paying a symbolic sum of money as sign of commitment by the purchaser with completion subject to the initial approval of the New Town Plan. The purchaser will at that stage know if the property can be legalised as well as the conditions required to achieve that legalisation and can then take a decision to finalise the purchase. Any economical consequence to achieve the legalisation of the property should be assumed by the vendor and any rent paid by the purchaser can be agreed to be taken as part payment of the purchase price.

In my opinion, most illegal buildings which have been occupied by bona fide purchasers will be legalised as it is highly unlikely that the new Town Council, which has just been appointed, dares not to legalise them for political reasons. Only those buildings which have been stopped at the construction stage and are occupying green belts or public facilities sites or which are totally incompatible with the objectives and values of the New Plan will not be legalised and are likely to be demolished in execution of court judgements.

Therefore, although there may be a degree of uncertainty in what may happen to dwellings in this situation, accentuated by thoughtless statements that they will be pulled down by certain politicians, those who have bought in good faith and who are enjoying the use of the property, could possibly still carry out transactions with their properties by using innovative legal solutions subject to the legalisation that is to take place in Marbella’s New Town Planning Regulation. This together with new democratically elected Council will bring back the necessary normality to Marbella.

Initial Approval of the new Town Plan of Marbella

Subsequent to the foregoing on the 19th July, 2007 the Marbella Council approved initially the new Town Plan. The said resolution was published in the Andalusian Assembly Gazette on the 30th July, 2007. This means that the Town Plan is exposed to the General Public for allegations until the 15th October, 2007. The Town Plan foresees the legalisation of approximately 18.500 dwellings which are at present occupied or about to be occupied by owners. However, the legalisation will be achieved after the owners affected contribute to the acquisitions of green belt or public facility plots in compensation for the irregularities in the granting on the existing building licences. Some 700 dwellings have been spotted not to be legalised on the grounds that they are totally incompatible with the objectives and values of the New Plan. On view of initial approval of the Town Plan we can take for granted that most buildings will be legalised and therefore not pulled down and the question boils down to money. This is how much each of the affected owner will have to contribute to the acquisition of the green belt or public facility site required for the legalisation of the building or urbanisation his/her property is situated in.

In order to assess the sum of money involved it is essential that the owners affected engage a lawyer specialised in planning matters who must in turn seek a report from an specialised architect who should value the cost of acquisitions of the green belt or public facility sites required for the legalisation of their property. With this in hand there should be no problem for them to sell their property so long as a provision for the said costs is made or guaranteed to the purchaser from the sales price until such time all the charges have been paid and the building has been legalised.

On the other hand the lawyer should lodge allegations against the zoning and planning features given by the Town Plan to his client site. It is essential that the owners present allegations against the initially approved Town Plan on an individual basis as the Local Council may consider taking a different approach if they see thousand of owners opposing to same. To this effect the mayoress of Marbella who has approved the Town Plan as had been prepared by the Andalusian Assembly, has made a public statement with her opinion that the owners should not carry the burden of the compensations as this is a problem of the Administrations involved. Therefore, one should not disregard that the entire Town Plan is changed for this reason if there is massive opposition by the owners affected.

Please note the information provided in this article is of general knowledge only and is not to be construed or intended as substitute for professional legal advice.