The administration is capable of rendering the right to property inoperative without striking a single blow of the pickaxe against a property. Where an obstacle to use lasting for years is placed upon a parcel by way of plan decisions, the owner continues to hold the title deed; the right in his hands, however, turns in practice into a registry record that has been emptied of content. In judicial decisions and in scholarly writing this picture is called legal interference.
The scenario encountered is similar in most files: a parcel is set aside in the zoning plan for a public use such as a road, park, green area or school, yet the administration takes no step whatever towards expropriation for years. The owner can neither obtain a permit, nor dispose of the property at its true value, nor derive any economic return from it. Even though there is no physical occupation, the economic content of ownership is exhausted.
It is for this reason that a zoning restriction cannot be regarded as a purely technical act of planning. Where certain conditions come together, it turns into an interference directed at the right to property and confers on the owner the power to claim damages. In this briefing note we address the limits of the concept, the transformation brought about by the case law of the Constitutional Court, the types of action that may be brought and the rules of procedure that must be observed.
The Concept of Legal Interference (Zoning Restriction)
Legal interference is the locking of the use of a property for a lengthy period, or its narrowing to a significant extent, by the administration by means of a zoning plan or similar administrative decisions, notwithstanding that it has not physically touched the property. In such a situation the right to property does not come to an end in law; the owner’s ability to benefit from the property is, however, seriously pruned back.
Restrictions of this kind, imposed by way of a plan and spread over time, are characterised as de facto legal interference where the conditions required are satisfied together. The consequence of that characterisation is direct: the owner becomes able to seek the making good of the loss sustained.
The Points on Which It Differs from Physical Interference
De facto expropriation takes two separate forms according to the manner in which it comes about: physical interference and legal interference.
Physical interference is the situation in which the administration itself enters the parcel and begins to use it. The opening of a route across the property, the laying out of the area as a park or the running of a power transmission line across it may be given as examples of this group. The details of the subject are examined separately under the heading of the action for de facto expropriation.
Legal interference, by contrast, is the prevention or marked limitation of the use of the property for a lengthy period by the administrative decisions taken, without any physical contact with the property. The parcel being shown in the plan as a park or green area and not being expropriated for years is the most frequently encountered form of this type.
Correctly determining into which category the interference falls is not merely a theoretical choice; since it directly determines the type of action to be brought and the procedure to be followed, it must be clarified at the outset of the process.
In Which Situations Does Legal Interference Arise?
The mere fact that a property has been set aside for a public service in the plan does not of itself produce the result of legal interference. What is decisive is that this situation is spread over time and that the owner falls into a position of being unable in fact to use his property. Put another way, not every plan restriction can be assessed within this scope; it is required that the interference acquire continuity and reach the essence of ownership.
Two elements must accordingly be present together for the concept to arise: the benefit from the property must have been restricted to a significant extent, and the administration must not have taken the route of expropriation within a reasonable period of time.
The following pictures may be accepted as legal interference in practice.
Allocation of the Property to a Public Service in the Plan
The most classic form of the concept is the designation of the parcel in the zoning plan as a school, hospital, road, park, green area or a public service area of a similar nature. Such an allocation most often makes it impossible for the owner to erect a structure on the property or to put it to economic use.
The existence of the plan decision on paper is not, however, regarded as sufficient; it is required that the decision in question have created a genuine obstacle to use over the property.
Failure to Expropriate for Years
Keeping a property set aside for a public use waiting for a lengthy period without expropriation is one of the strongest indications of legal interference. If the administration does not open the expropriation file for years, notwithstanding that it has marked the parcel in the plan as a public service, the owner’s property becomes unusable in fact.
For this conclusion to be reached in practice, three facts are required to be present together: the parcel must have been allocated to a public use by way of the plan, no expropriation proceedings whatever must have been commenced despite the lengthy time that has passed, and the benefit from the property must have been prevented without interruption.
Significant Narrowing of the Use
For legal interference to be spoken of, it is not necessary that the property have become wholly unusable; a considerable limitation of its use may also suffice. Building prohibitions, restrictions on use or the failure to meet applications for a permit pull the economic value of the parcel down to a perceptible extent.
The following may be listed as examples of situations that may be assessed within this scope:
- Applications for a permit being left without result by the administration
- The right to build being closed off entirely
- The disposal or use of the property becoming difficult in fact
- A marked decline being experienced in the economic value of the parcel
The Interference Becoming Permanent and the Essence of Ownership Being Impaired
For the concept to be applied, the interference must not be temporary in nature. Short-term restrictions or temporary plan amendments do not of themselves constitute legal interference.
For this reason the courts conduct their assessment along three axes together:
- Whether the restriction has been spread over a period of time that cannot be regarded as reasonable
- Whether the use of the property has been affected in a permanent manner
- Whether the core content of the right to property has been touched
How the Constitutional Court’s Case Law Transformed the Concept
Whether damages could be claimed where the administration failed to expropriate notwithstanding that it had set the property aside for a public service by way of a plan remained a contentious area for many years. Interpretations differing from one another were produced, particularly in files in which the parcel had not in fact been entered, as to whether it was possible to claim its value in reliance on the plan decision alone.
The judgments given by the Constitutional Court largely removed that uncertainty. The Court established clearly that where the property is not expropriated for years and the owner falls into a position of being unable to use his property, the right to property is violated. This approach both drew the limits of the concept and strengthened owners’ claims for damages in law.
As at today, the criterion taken as the basis in the assessment is not whether the administration has made a physical interference. The question asked is this: has the failure to expropriate the property for a lengthy period impaired the essence of the right to property?
The Earlier Practice
In the past period, the fact that the parcel had been set aside for a public service in the plan was not regarded as a sufficient basis for a claim for damages. The failure of administrations to expropriate the property for years, notwithstanding that they had taken a plan decision, was most often not characterised as a violation of property, and owners’ claims could be rejected.
The grounds of rejection were generally gathered around three points: that the property had not in fact been entered, that the administration had confined itself to nothing more than a plan decision, and that the title deed still appeared registered in the owner’s name. The practical consequence of this approach was severe; owners were unable to benefit from their properties for years and yet obtained no value either.
The Constitutional Court’s Approach
The Constitutional Court has accepted the failure to expropriate the property for a lengthy period, and the owner’s inability to use his property, as a disproportionate interference with the right to property. On the Court’s view, the administration’s remaining inactive after setting the parcel aside for a public service by a plan decision produces a result that impairs the essence of ownership.
The principles adopted within the framework of these judgments are, in summary, as follows:
- A plan restriction of indefinite duration may be of the nature of a disproportionate interference with the right to property
- The fact that the parcel has not in fact been entered does not of itself mean that there is no violation
- The right to property may be regarded as violated in the case of a property kept waiting for years without expropriation
- In such a picture, a right to claim damages arises for the owner
Thanks to this line of case law, the framework of legal interference has become clear, and the aim has been to prevent administrations from keeping properties under plan restrictions of indefinite duration.
Actions That May Be Brought in Cases of Legal Interference
An owner who is unable to use his property by reason of plan decisions may resort to one, or to several at once, of the legal routes before him. The type of action to be preferred is shaped according to the nature of the interference, the legal position of the plan decision and the effect of the restriction upon the property.
The two routes most frequently resorted to in practice are addressed below.
Action for Damages (Full Remedy Action)
The basic response to legal interference is the full remedy action (action for damages), resorted to in order that the loss arising from the use remaining locked for years may be made good. This route is taken when the administration has not commenced expropriation proceedings for years, notwithstanding that it has set the parcel aside for a public service by a plan.
The court determines, by the examination of a court-appointed expert, the true value borne by the property as at the date of the action, and may order the making good of the loss sustained by the owner.
This action, whose name in practice is the full remedy action, is as a rule heard in the Administrative Court.
Claim for Annulment of the Plan Provision or Removal of the Restriction
If the zoning plan or plan decision constituting the source of the restriction is unlawful, the owner may seek the annulment of that act or the removal of the restriction over the property. This claim is advanced by way of an action for annulment of an administrative act.
The action in question arises in particular in the following situations:
- The restriction taking on a structure that exceeds due measure or becomes permanent
- The plan provision being unlawful
- Expropriation proceedings not being commenced for years as regards a parcel set aside for public use
- The administration failing to give effect to the requirements of its own plan decision within a reasonable time
Where the court finds the plan decision to be unlawful, it may annul the relevant plan provision and may also order the removal of the restriction over the property.
The Obligation to Apply to the Administration Before the Action
In claims for damages arising from legal interference it is not possible to go directly to court. The owner must first apply to the relevant administration and seek the expropriation of the property or the making good of the loss. This step is in the nature of a mandatory preliminary application in disputes of this kind.
The reason for it is clear: since the interference arises from an administrative act or from a plan decision, the opportunity to put the situation right is expected to be afforded to the administration first. An application aimed at settlement is for this reason accepted as one of the preconditions for taking the route of the courts.
Important note:
In actions brought without a preliminary application, the court does not examine the dispute on the merits; the file is dismissed on procedural grounds for encroachment upon the administrative authority. In this respect the process differs markedly from actions for physical interference, which are not subject to any condition of preliminary application.
The accrual of the right of action
Following the application made to the administration, an action for damages may be brought once one of the following situations occurs:
- The claim being rejected by an express decision of the administration
- No reply whatever coming from the administration although the statutory period has expired (implied rejection)
If, despite the application, the administration does not carry out an expropriation or make good the owner’s loss, the route of an action may be taken, since the violation of property continues.
The Courts with Subject-Matter and Territorial Jurisdiction
Since disputes over damages arising from legal interference take their source from administrative acts and plan decisions, they fall within the field of the administrative judiciary. The court with subject-matter jurisdiction in actions of this kind is therefore the Administrative Court.
Since the restriction typically arises in the form of the parcel being set aside for a public service by a plan and no expropriation being carried out thereafter, the dispute is dealt with within the scope of making good losses arising from the acts and actions of the administration. The action is for this reason brought as a full remedy action.
As regards territorial jurisdiction, the rule is the administrative court of the place where the property is situated. In actions brought in the court of another place, a decision declining jurisdiction is given and the file is sent to the administrative court with jurisdiction.
The Period Within Which the Action Must Be Brought
In claims for damages of this kind, the period is calculated according to the application directed to the administration and to the outcome of that application. Since the dispute concerns the making good of loss arising from the acts and actions of the administration, the time-limit regime of the administrative judiciary applies.
The owner must first turn to the administration and request the expropriation of the property or the making good of the loss. Where that request is rejected or left unanswered within the statutory period, the right of action accrues.
The general framework is as follows:
- If the application has been expressly rejected, the action must be brought within 60 days starting from the day on which the decision of rejection is served.
- If the administration has remained silent for 30 days, the court must be applied to within the 60-day period that runs following the expiry of that period.
The periods in question are preclusive periods. Once the period is missed, it is no longer possible to advance the claim for damages before the courts.
Independent Legal’s Assessment
In legal interference files, the element that determines the outcome is more often than not the correct construction of the process in procedural terms rather than the value of the property. Skipping the mandatory preliminary application, or missing the 60-day period, leads to the file being closed without the merits being reached at all. For this reason the nature and duration of the restriction and the conduct of the administration must be established on the basis of documents at the very outset of the dispute.
The interference must also be correctly characterised as either physical or legal, for that distinction alters both the branch of the judiciary with jurisdiction and whether the condition of preliminary application applies. In some files, pursuing the claim for damages together with a claim for annulment of the plan provision may provide more effective protection.
In a particular dispute the following headings should in particular be addressed as a priority:
- Documenting the date of the plan decision and the duration of the restriction by means of title deed and zoning records
- Framing the scope of the application to be made to the administration so as to include both the claim for expropriation and the claim for damages
- Planning the timetable for bringing the action from the outset by correctly calculating the period for implied rejection
- Collecting in advance concrete evidence relating to the refusal of a permit, an attempted sale or the loss in value
- Assessing whether there is a legal interest in advancing a claim for annulment of the plan provision separately
Independent Legal provides advisory and litigation services throughout the whole of the process in disputes arising from zoning restrictions, from the application to be made to the administration through to the conduct of the full remedy action.