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AFO Decreto 3/2019

Andalusia’s planning amnesty for 320,000 rural homes is good news for the property market, though it might weigh down on house prices in the short run

The regional government of Andalusia has passed a decree that provides a fastrack out of legal limbo for hundreds of thousands of homes built without proper planning permission, which should stimulate the market in the long run, though the more immediate effect might be a pent-up wave of homes for sale that flood the market and weigh down on prices in the short run.

The town planning mess that has built up in Andalusia over the last few decades is just mind-boggling, but finally we see real steps towards sorting it out. Though the chaos and corruption in places like Marbella on the coast are better known, perhaps the biggest problem was in the countryside, where more than 300,000 homes have been built without proper planning permission, many of them bought by foreigners from northern Europe with no idea of the minefield they were buying into.

“For decades the owners of an estimated 327,000 homes in the region of Andalusia have found themselves trapped in a legal vacuum because their house or apartment had been built illegally, leaving them to face an array of problems such as no paperwork (deeds), no permission to connect to services such as water and electricity and, in some well publicised cases, facing the threat of or actual demolition of their property,” explains the homeowners campaign group AUAN (Abusos Urbanisticos Andalucia NO).

“Many thousands of expats, buyers in good faith, fell into this trap when buying their dream home in the sun and thus became hostage to their own home for over a decade at the mercy of planning officials who have attempted, mostly without success, to shoehorn irregular houses into a highly regular and extremely lengthy planning process.”

The Socialists who ran Andalusia like a fiefdom in the 40-odd years since the restoration of democracy are largely to blame for allowing the problem to inflate to monumental proportions on their watch. They never showed much interest in solving it, perhaps to keep the environmental activists happy by avoiding anything that looked like an amnesty for homes built in rural areas without correct planning permission. But they couldn’t demolish them all either, so they just perpetuated a planning mess that trapped rural homeowners for decades. This limbo was particularly hard on expat retirees who couldn’t go back to their home countries when life events called for it.

Andalusia’s new regional government (Junta) run by the centre-right PP and Ciudadanos parties, with the support of the rightwing Vox party, has passed a decree called the Law Decree 3/2019 of the 24th of September 2019 containing urgent measures for the environment and territorial adaptation of irregular houses in Andalusia (Decreto-ley 3/2019, de 24 de septiembre, de medidas urgentes para la adecuación ambiental y territorial de las edificaciones irregulares en la Comunidad Autónoma de Andalucía). The decree came into force on the 26th of September. It just shows that solutions to entrenched problems can be found with enough political will, though the Junta has gone to some length to stress it’s not an ‘amnesty’.

“The new legislation allows all owners of an irregular home, except when the property is less than 6 years old, on protected or flood risk land, or when it is subject to ongoing planning infraction proceedings, to apply to their town hall for their property to be granted the status of assimilado al regimen de fuera de ordenacion (AFO).” Explain AUAN. “With this status the property can then legally access services if available and it also facilitates the registration of the property at the Land Registry. For many of those affected this offers an immediate way out of the legal vacuum in which they have lingered for many years.”

The decree doesn’t legalise all affected properties at the stroke of a pen. It provides a route to legalisation but owners still have to apply for it, which means there will be plenty of work for lawyers in Andalusia helping hundreds of thousands of owners to sort out their paperwork. Fortunately for owners, getting legalised doesn’t involve going to court, where so many legal wrangles in Spain get bogged down, as has happened with mortgage floor clause claims.

Gerardo Vazquez, legal advisor of the AUAN, and spokesperson of CAJU, a national coordinating body for associations seeking justice in planning matters, states that “the Andalusian government is to be congratulated on working on this issue in record time. It is brilliant to see such a firm commitment to change matters. To me it is a breath of fresh air in planning matters.”

Maura Hillen, President of the homeowners campaign group AUAN (Abusos Urbanisticos Andalucia NO) welcomed the decree. “It has been a long and difficult road for homeowners and I am glad that the recent change in the government of Andalusia has brought new impetus and new eyes to this issue and I thank them for listening to concerns and proposals. The decree is not a magic wand solution but it is a practical and workable one which gives the majority of our members a way out of a situation that was not of their making. I am happy with that. The rest is up to homeowners to study their options and act accordingly.”

Market implications of Andalusia’s planning amnesty for illegal rural homes

The rural property market in Andalusia has been hobbled for years by the underlying planning chaos that increases the risk of buying a rural home in the region, so any move to significantly lower risks should be good for confidence and the market. I’ve heard comments from some would-be vendors that the market is absolutely dead and has been for years.

In the long run it could bring in more potential buyers making it easier to buy and sell rural property in Andalusia, and strengthening the foundations and value of the housing market in the region.

However, in the short to medium term it suspect it will lead to a flood of new listings on the market, as owners who have been trapped for years finally get the chance to sell. Though the news might bring in a few more buyers, I doubt there will be a corresponding increase in the number of them looking for rural property in Andalusia, meaning more supply than demand that weighs down on house prices. Even so, compared to the legal limbo that trapped them out of the market until now, owners will be better off with an asset they have a chance of selling. It becomes more a question of price.

This is undoubtedly good news for rural property owners in Andalusia, for potential buyers, and for the economy in general (home sales help drive economic growth, employment, and tax revenues), though environmentalists like Ecologists in Action hate it.

That said I think everyone should think carefully before buying a rural home in any foreign country, unless you are very well-off and never have to worry about material things. Rural homes are typically harder to reach, harder to protect and maintain, harder material for due diligence, and harder to sell than homes in an urbanised environment.

Written by Mark Stücklin

Mark Stücklin is a Barcelona-based Spanish property market analyst, and author of the 'Spanish Property Doctor' column in the Sunday Times (2005 - 2008).

https://www.spanishpropertyinsight.com/2019/10/03/andalusias-planning-amnesty-for-rural-homes-good-news-for-property-market/

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