Urbanisation turns out to be built on rustic land... buy or run ?

We found a great property near Busot, 15 minutes from Alicante. A private villa with private swimming pool, in an urbanisation of more than a hundred houses. Built 30 years ago. All good and well until the bank guy sent an architect to do a valuation. Appraisal came back 40 thousand euro cheaper than the price we thought to pay (which we thought to be very sharp).  Reason: the house is on rustic land. 

The whole neigboorhood is on rustic land!  How is this possible? and what are the risks? I dont expect an honest answer from the real estate agent and not even from the lawyer since it's the one working with the real estate agents, so I guess he is biased.

Can it be totally ok, I mean is this a common thing to have whole neighboorhoods built illegally.... is this kind of semi-regulated after all?  And most of all. who will tell me the truth? We still like the house... but dont want to throw away our money obviously

RUN.......there are plenty of fully legal properties that you can choose from.  Why buy into a potential problem on day one??

All depends our last Spanish house on Campasol was illegal too but we paid the same money as a second hand park home so after 8 years owed us nothing we sold to people for cash and they knew it was dodgy too.

Buy it if its at the right price

Love Hugh xxx

In other words...you gotta ask yourself - do you feel lucky? 

If the the bank values the property at 40,000 EU less than the asking price how much was the seller's original asking  as hughjardon said if it's the price of a secondhand mobile home around the 35,000 EU mark and you get to live in it for 15 year's then go for it ,but something tells me the owner especially if they are Spanish want big money for it knowing it is illegal so in that case run run run keep on looking.

Run for the hills. I would hazard a guess that there are probably hundreds of Brits who bought properties that they thought were legal, but ended up with the house being re-possessed, demolished and no compensation.  To knowingly buy an illegally built property is madness in my opinion, no matter how long it has been there. Also the bank should not give a mortgage on an illegal property. (If you need one, but as most of them are crooks they probably would). You don't mention how much the property cost, but if it's 40k cheaper than you think ask yourself this question. Can I afford to lose all this money?

After 30 years it is possible those properties can be legalized

If you buy it knowing that it is on rustic land, and want to spend the time and money to try to get it legalised, bear in mind that if it does all go wrong you can't claim that you bought it 'in good faith' not knowing that there was a problem.  We own an illegal property, which was bought in good faith, and it's no fun. 

Just don't. Find something that's legal.

In those cases, where you bought in good faith, thinking it was legal, if a mortagge was provided, there is a possibility for an action against the Bank and refund of all mortgage repayments made with interests and compensation.

If you advanced amounts off plan, an action out of Law 57/68 against the Bank might also be possible