After a very dark scenario for the Marbella real estate world as result of the initial approval of the New Town Plan, the Marbella Council Resolution for the anticipated execution of the Town Plan has shed certain light for business and property owners in buildings with so-called "illegal building licences".

According to Marbella's New Draft Town Planning Regulation, there are around 30,000 dwellings which have building licences which violate the 1986 Town Planning Regulation. Some owners were living in these properties and now face the lack of the Habitation Licence, a possible execution of a Court judgement declaring the building licence null and void, and in any event if they try to sell, the purchaser cannot obtain a mortgage. Some businesses being run in buildings built with illegal building licences cannot obtain the Opening Licence and are therefore trading illegally. With the Council Resolution, those property and business owners can legalise their position before final approval of the Town Plan by the Junta de Andalucía takes place, providing the New Town Plan foresees the legalisation of the buildings. The requirements to obtain the licences are different depending on the following situations:

1. Buildings out of planning, meaning buildings on which the Council cannot redress the violated juridical order since the statute of limitation to do so has expired. The Council will grant Habitation and Opening Licences providing the use attributed to those properties is not forbidden under the New Town Plan.

2. Buildings which violate the 1986 Town Plan where the Council can still redress the perturbed juridical order by the corresponding process. Property and business owners can obtain the licences under the following conditions:

a) They will have to be registered in the Land Registry.

b) The owners will have to waive their right to any compensation in the event that the New Town Plan does not sanction the validity of same.

c) The Licences will be given on a temporary basis. This means that once the New Town Plan sanctions them, the Licences will have to fulfil the conditions, compensations and charges that would be made in order to be definitively obtained.

d) In case of a Habitation Licence, a bond will have to be given to the council to secure the compensations foreseen in the New Town Plan for the legalisation.

3. Buildings with licences being challenged in Court where judgement has still not been issued or where execution of the judgement declaring them null and void has been suspended.

The Council will deal with the application for licences in the order they are presented and we presume those affected will have to wait for the Council to inform them of the sum of the bond they have to give to guarantee the compensations foreseen in the New Town Plan for the legalisation of their properties. It is strongly advised that those property or business owners in buildings with illegal building licences which can be legalised under the New Town Plan in the process of being approved, lodge the corresponding application with the council for licences, as if they obtain same, this will facilitate the sale of the property as bank will have to change their approach when sorting out mortgage applications.

Regards