The Royal Decree 2/2008 of 20th June, that approved and amended the revised text of the Land Act ("Ley del Suelo 8/2007"), came into force on 27th June 2008.
The main objective of the Royal Decree was to harmonise the terminology and mechanisms employed by the Act 8/2007, of 28th May, and the Royal Decree 1/1992, of 26th June, with the aim of avoiding any divergence between these and other such Acts.
The first chapter of this Act covers the basic conditions of equality for the constitutional rights and duties of the citizens. They establish socio-economic and environmental rights for all citizens, independent from their activities and patrimony. It regulates the practice of private enterprise with regards to planning, construction and the content of proprietary rights to land, distinguishing the options and burdens contained within that right.
The second chapter of this Act deals with the basis of land law. In order to render the rights and duties of citizens effective in relation to plots of land, some simple criteria for the use of land are put forward and the publication of the above, and of all such rules of townplanning procedure, is a clear requirement of public administration.
Moreover the Act addresses the obligation of public administrative bodies to submit rules concerning land and town-planning proposals to an environmental and economical evaluation in order to perform within their powers in relation to enacting town-planning regulations.
The Act highlights the need to reserve allocated areas for social housing needs subject to public protection measures, through which maximum prices for rent and sale can be established.
However, land law is restricted to two basic situations, namely rural land and urban land.
In this context rural land is that which, for reasons of protection, such for its nature or any other purpose, cannot be urbanised. This category also includes land which planning laws may envisage or may allow to become urban land, and any other such land that does not meet the requirements of urban land.
Urban land is determined as land where a legally integrated nucleus of the population with an effective network of their own services and personnel is found
The third chapter makes reference to the procedure for the valuation of land. It proposes criteria to be used for valuing land and building with regard to replanning, expropriation and indemnification caused by the state, the responsibility lying with the public administrative body.
For the sake of avoiding general speculation, the method adopted by the Act is to judge the land’s worth in its current situation, using independent classification and categorisation, and not to give it the value that the land might have in the future on the basis of proposed planning.
With regards to rural land, comparison can be used as the method. Landowners will rate the capitalisation using the total of real annual rent or potential exploitation, taking whichever of the two produces a greater figure, according to their state at the time of valuation. Buildings, constructions and installations, when valued independently of the land, are estimated by the costs of relocating them according to the state and age in which they are found. Existing plantations and indemnifications are calculated, in accordance with the Laws of Compulsory Expropriation and Rural Rents ("Leyes de Expropriación Forzosa y de Arrendamientos Rústicos"). Forecast profits derived from the potential building development or uses for town planning cannot be used in any case unless they have already been completely created.
Urban land that has not been built upon is valued by taking into account the use and development potential that has been given to the plot by the town planning system, and if this does not exist then the average use of the property and its building potential is calculated by the area in which it is found. Such development potential is judged by taking the consequential value of the underlying land in its current form and then subtracting any charges or pending duties that may burden the land.
When it is a matter of built up land or in the course of being developed, the estimation takes into account the highest value determined by the combined worth of the ground and the existing building employing methods of comparison or determination of the underlying value.
The fourth chapter regulates the procedure for compulsory expropriation and state responsibility.
On the subject of compulsory expropriation, the rules under the Law of Land Rules and Valuation Procedures ("Ley sobre Régimen del suelo y valoraciones") are used. The right to reversion is preserved but modified to the principles and dispositions of this Act. One change is the introduction of the right of revaluation in cases where the use or building potential of the land is altered, by virtue of an amendment to the rules that govern land and town planning and not through the modification of the planning rules, and it supposes an increase in value in accordance with the criteria applied in the expropriation process. The new value is determined using the same factors that are involved the valuation process for new uses and building potential.
The fifth chapter discusses the different methods used to guarantee the attainment of the social goals behind property and land management.
The Act adopts methods to guarantee the social purposes of property, in cases where there is a failure to fulfil duties of building or renovation by the land owners, the corresponding administrative body will be able to expropriate, apply the compulsory replacement or sale procedure, all without damaging any other consequences that could be imposed by land and planning regulations.
It also regulates the function of the assets and resources which form part of the public’s real estate funds, those which should be destined for the construction of social housing as part of the regime for public protection and other uses as long as they are in the public interest.
This Act supplies a system for the right of ground surface development, aiming of centralise and organise the existing defective regulations of this right.
Finally, the sixth chapter, entitled “Judicial Rules” (“Régimen Jurídico”) includes a series of relevant rules for the holders of proprietary rights concerning the procedural matters before the administrative bodies and contentious administrative tribunals, the inscription process for the Property Register ("Registro de la Propiedad") and the classes of entries, and the administrative relations with the Public Prosecutor ("Ministerio Fisca"l) in respect of the swift administrative actions that could be started upon the infringement of town planning rules.