Owners of property in upmarket Marbella, on Spain’s Costa del Sol, face ongoing uncertainty following a decision by the Spanish Supreme Court to declare unconstitutional the revised town plan passed in 2010.
This plan was introduced to bring order to the chaos of the Marbella real estate market that had existed, predominantly during the reign of now deceased ex-mayor Jesus Gil and currently jailed former town planner Juan Roca, when planning corruption was rife along the coastline.
While recognising some of the laudable objectives of the 2010 revision, the supreme court declared the revised plan null and void on November 4th, 2015, for reasons including failure to comply with environmental protection laws and the lack of an economic viability study. It was rejected mainly, however, because the judges felt the purpose of a town plan should not be to legalise prior planning infractions.
At the introduction of the 2010 plan it was estimated that there were around 18,000 dwellings in the municipality that either had been built or were in the process of being built with illegally issued building licences. The 2010 plan was to legalise an estimated 16,500 of these.
Violations
These were planning permissions issued in contravention of the 1986 town plan in force at that time. The violations ranged from constructing houses on land not designated for building, such as green belts or land set aside for public facilities, to granting licences despite buildings not meeting regulations or building code standards. In many cases this involved building more homes per square metre than allowed, or having a larger plot than regulations deemed allowable.
Many of these dwellings had been completed and were purchased by bona fide owners with registered title in the land registry. Prior to the 2010 planning decision, owners were informed that the properties were illegal despite the fact that their solicitors had checked that the Land Registry showed the developer had clean title and the latter had obtained a presumed legal building licence.
The decision is a serious blow for Marbella’s town hall. The approval process for the revised plan cost it a huge amount of time, effort and money. The decision literally sets town planning in Marbella back 30 years, as it brings back into force the town plan of 1986, which was so widely flouted during the building boom of the 1990s and early 2000s. The ruling places the town in an extraordinary legal and planning vacuum, as returning to the plan of 1986 is practically impossible due to developments in the intervening 30-year period.
This legal turnaround is a huge blow for Marbella’s property business and Spain’s southeastern coastal economy as a whole, as it introduces significant uncertainty for owners who thought their properties had been legalised by the 2010 revision. This revised plan had been approved by both Marbella and Andalusia’s regional government in Seville.
The Marbella property market had been one of the few bright spots in a Spanish market that has really struggled for almost a decade.
Property buyers dislike uncertainty and it will warn potential new buyers of the corruption that can prevail in Marbella.
It may also mean that there will be no new building licences for the foreseeable future, plunging the residential construction business back into crisis just when it looked like it was making a tentative recovery.
Decision welcomed
Some involved observers have welcomed the news. Ricardo Arranz, president of the National Association of Urbanisation Developers, said the decision was “right and expected”, celebrating the rejection of the revised plan. In his opinion, it was an unmanageable plan that had started to deter investors.
He claimed the 2010 plan was rushed and had been conceived by architects who knew absolutely nothing about Marbella and what the property market there needed.
He went on to claim that the public administration at the time approved the plan despite knowing it was not fit for purpose.
While claiming that the revised plan was an “economic disaster”, Arranz recognises that replacing it with a new plan that works for Marbella will be “complicated and problematic”. The current political situation is complicated by multi-party involvement and thus not likely to help facilitate the process.
Compensation
Despite this setback, it is not all doom and gloom for property owners on the Costa del Sol. Since the introduction of recent legislation, there can be no demolition of property purchased in good faith without compensation.
This means Marbella Town Council has a recurrent dilemma on its hands: to either demolish property and pay exorbitant compensation, or again find a way to legalise properties that should never have been built in the first place.
