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Spanish Government faces flak over property scams

Tuesday 23rd March 2010

Yesterday in the European parliament's Petitions Committee, the Spanish government attracted widespread condemnation for Spain's failure, over many years, to act on extensive property scams, affecting British and other buyers of Spanish holiday and retirement homes.

In the meeting, the Director General for Sustainability of Coastal Regions, Alicia Paz, asserted that the Spanish Coastal Law, implicated in many of the forced expropriations of seaside property, was intended to preserve Spain's fragile coastal environment. But she failed to explain how such a law could be applied retrospectively, how it could be used to deny basic property rights to Spanish and foreign investors, who had bought property on the basis of binding contracts and land registration, and why the expropriations seemed to apply to private householders, but not to hotels and major developments.

Speaking in the debate, East Midlands Conservative MEP Roger Helmer said that he had received dozens of complaints from constituents or former constituents, many telling tragic stories of elderly couples who had spent their life savings on a dream retirement home on the Costas, and lived there happily for months or years, only to wake up one morning to find an eviction notice on the doormat, and bulldozers at the gate. Some have seen their dreams, their homes, and their life savings literally reduced to rubble before their eyes.

In addition to the Coastal Law, which has seen thousands of properties taken into public ownership without proper compensation (at best owners are offered a temporary lease on the properties they previously owned), the region of Valencia has seen extensive expropriations based on local planning laws. There are widespread and credible reports of collusion between developers and corrupt local politicians. In some cases, to add insult to injury, owners are presented with bills for tens of thousands of Euros for the provision of utilities to the very land they've had taken away.

Speaking in the debate, Roger Helmer pointed out that countries wishing to join the EU had to demonstrate that they had a functioning market economy, which required the rule of law, rights of property, and enforceability of contracts. Spain was failing to meet these criteria. Helmer argued that if Spain were now applying to join the EU, it could be excluded on those grounds. He particularly criticised the attitude of the European Commission, which claimed it was unable to take any action under EU law, despite Article 17 of the much-vaunted "Charter of Fundamental Rights", which states that a citizen "Has the right to own, use, dispose of and bequeath his lawfully acquired possessions" . The Charter came in with the Lisbon Treaty.

Commenting after the hearing, Helmer said:

"Over many years I have been frustrated that there is so little I can do to help victims of these scams. Now at least during the Spanish EU Presidency we are building up the pressure on Spain, and on the EU Commission, to take decisive action. In the past, Spanish MEPs have tended to support the status quo, but I was struck yesterday that all but one of the Spanish MEPs who spoke demanded action to resolve the problems".