The European Union has given Spain two months to modify the now infamous “land grab laws” that have affected hundreds of British property buyers or face action in the European Court of Justice.

The town planning laws at the centre of the controversy were originally introduced in the Valencia region of Spain, which includes the Costa Blanca, in 1994 to prevent land owners holding town councils to ransom over development plans.

At the time speculators were buying up huge areas of green belt land in the hope of selling it on at a later date as urbanisable land, but the LRAU laws allowed planning authorities to take land from its owner by citing “public or social interest”.

However, during the huge building boom that has taken place in Spain during the last ten years or so, the laws have been increasingly abused by both councils and developers, with greed and profit rather than public interest said to be behind many of the 20,000 or so compulsory purchase orders.

In many cases people who have lost both land and property with little or no compensation have also been asked to pay for part of the costs of the new infrastructure for the affected areas.

One case that has been hitting the headlines in both Spain and around the world this year involves a Belgian couple who have lived in their 150 year old property set amongst seven acres of terraced vineyards and olive groves in the the Coma del Pou area of Benissa in Valencia’s Alicante province for the past 18 years.

Last November they were told that under the LRAU laws, two thirds of their land was to be declared urbanisable and that they would have to pay a whopping €700,000 (about £470,000) for the infrastructure - roads, drains, street lighting - required. The alternative was for them to sell their land to the developer who had earmarked it for 17 new houses.

In February this year, the LRAU laws were replaced by LUV laws which were meant to improve the situation in Valencia, but in reality little has changed. Certainly not enough for the European Commission which is looking for significant changes to bring it into line with EU law.

British MEP, Michael Cashman, has been leading the fight against the land grab laws from the European Parliament and he welcomes the Commission’s latest move against Spain.

“I’m delighted to hear the Commission are continuing their actions against Spain in what has become a long and painful fight for justice for many EU citizens of all nationalities who have been affected by this unjust and inhumane law. The regional and national governments in Spain have not convinced the European Parliament or the European Commission that their new land laws are any better than their old ones.

“Under EU public procurement law, which regulates the development of land, it is clear to me that Spain is breaching her obligations in Valencia and probably in other regions as well.”

“I hope that the Spanish national government will take this legal and political opportunity to resolve the problems as soon as possible.”

The sooner the better as far as estate agents in the Valencia region are concerned because the widespread adverse publicity surrounded the land grab laws has most certainly had an effect on the number of property buyers coming to the region and indeed Spain.

Sales of Spanish property to foreign buyers in general was down 13% for the first half of 2006 according to government figures, due in the most part to affordability issues and the overdevelopment of once popular areas, but those sales figures will not have been helped by the negative media attention that the LRAU and LUV have attracted.