In certain cases in which the public interest cannot tolerate delay, the administration may begin to make actual use of an immovable property without waiting to complete the ordinary steps of expropriation one by one. This procedure, known as urgent expropriation, confers a provisional power to take possession on the basis of a court decision before ownership passes to the administration; the performance of the public service is thereby not spread out over time.
The fields in which this method is resorted to display a particular pattern in practice: power transmission lines, road and railway routes, dam construction, large-scale infrastructure investments and works requiring urgent intervention after a disaster. Urgent expropriation is not, however, an alternative course replacing the general procedure. It is an exceptional legal instrument that can come into play only where a concrete state of urgency and necessity exists.
In this briefing note we examine, in turn, the statutory basis of the procedure, the conditions under which it may be applied, the criteria by which the court determines the compensation, how actual possession of the immovable property is taken and the rights the owner may exercise at each stage of the process.
The Concept of Urgent Expropriation
Urgent expropriation is an exceptional method allowing the administration, in situations in which the public interest does not admit of delay, to open an immovable property to use without waiting for the lengthy steps of the ordinary expropriation procedure.
Statutory Basis
This procedure is not an arbitrary practice but is subject to strict statutory conditions. Its basis is formed by Article 27 of the Expropriation Act No. 2942.
Under that provision the cases in which recourse may be had to urgent expropriation are limited: the needs of national defence, situations concerning public security, natural disasters, infrastructure investments and other cases whose urgency is decided upon by the President. Within this framework the Act confers on the administration the power to take possession of an immovable property without completing the ordinary procedure.
Looking at practice, it is apparent that the overwhelming majority of urgent expropriation decisions are taken by Presidential decision. These decisions perform a decisive function in energy investments, transport projects, dam and road routes and post-disaster reconstruction works. In addition, in certain limited cases it is also possible for the power of urgent expropriation to be conferred directly by statute.
The point underlined in the case law of the Constitutional Court and of the Council of State is this: urgent expropriation is not a rule but an exception. Because it leads to a rapid interference with the right of property, this method may be resorted to only where a real and concrete state of urgency exists. In files in which the condition of urgency is not satisfied, the annulment of the urgent expropriation decision may be sought.
Points of Departure From the Ordinary Procedure
The distinction between the two procedures becomes apparent essentially in when possession of the immovable property is taken and at what speed the process runs. In ordinary expropriation the administration first operates the purchase procedure; ownership passes to the administration once the compensation has been determined and the registration completed. In urgent expropriation, by contrast, possession of the immovable property may be taken before the compensation becomes final, so that the public service is not disrupted.
| Criterion of comparison | Ordinary expropriation | Urgent expropriation |
|---|---|---|
| Moment of taking possession | After the compensation becomes final and the registration is completed | Upon deposit of the compensation determined by the court |
| First stage | Purchase (settlement) procedure | Request to the court for leave to take possession |
| Nature of the compensation | Final expropriation compensation | Compensation for taking possession, of a provisional character |
| Passing of ownership | By the registration decision | By the registration action to be brought subsequently |
Determination of the Compensation by the Court
In urgent expropriation the determination of the compensation is the precondition for taking possession of the immovable property. Once the decision has been taken, the administration applies directly to the court and requests that the value of the immovable property be determined. With the payment into the bank of the sum established as a result of the expert examination, the administration acquires the power to take possession.
The point that must not be overlooked at this stage is that the figure determined by the court is not the final expropriation compensation. That sum is merely a provisional consideration intended to enable immediate possession of the immovable property to be taken. The definitive value of the immovable property is established in the action for the determination of the compensation and for registration to be brought subsequently.
The Administration’s Application to the Court
Once the decision has been taken, the administration applies to the Civil Court of First Instance of the place where the immovable property is situated and requests both the determination of the value and the grant of leave to take possession. It is this application that marks the moment at which the process actually begins.
Among the elements expected to appear in the application file is the urgent expropriation decision itself (the Presidential decision or the statutory authority). To this are added the title deed records of the immovable property, the information relating to the parcel and the project documents. The file is completed with the technical data showing the purpose for which the immovable property is to be used.
At this point the court reviews the procedural regularity of the application and initiates the stage of determining the compensation.
Expert Examination and Valuation
In order to establish the value the court as a rule appoints a panel of court-appointed experts composed of technical specialists; the panel includes members of professions such as a real estate valuation expert, a civil engineer or an urban planner. The panel arrives at a value by assessing together the location of the immovable property, its surface area, its zoning status, the actual manner of its use and comparable sales.
The principal elements weighed in the examination may be listed as follows:
- The values arising in comparable sales
- The size of the parcel and the character it carries
- Its position in the zoning plan and the development rights attaching to it
- The income-generating capacity of the immovable property
- The region in which it is situated and the opportunities it offers in terms of access
- The consideration for the structures and installations upon it
In line with the report submitted by the panel, the court decides upon the compensation for urgent taking of possession.
Payment of the Compensation Into the Bank
The payment of the sum determined into an account to be opened in the name of the owner is one of the most decisive steps of the process. Unless the deposit is made, there is no legal possibility of taking possession of the immovable property.
The principle applicable in practice is clear:
No urgent expropriation may be carried out without the compensation being deposited.
From the moment the sum is transferred to the bank account, the administration acquires the power to take possession and may begin to use the immovable property for the purposes of the public service.
An Important Point in Practice
Three observations may be made as to the nature of the compensation determined at this stage. That sum is not the definitive expropriation compensation; it consists of no more than a provisional consideration making the taking of possession possible, and it may change at the later stage either upwards or downwards.
For this reason the owner may at any time request, in the action for the determination of the compensation and for registration to be brought subsequently, that the true value of the immovable property be established.
Withdrawal of the Deposited Compensation by the Owner
Under Art. 27 of the Expropriation Act No. 2942 there is no legal impediment to the collection by the owner of the sum determined by the court and paid into the bank. The withdrawal of the money means neither that the compensation assessed by the administration has been accepted nor that consent has been given to the expropriation.
The reason for this is plain: in urgent expropriation the sum deposited is not the final consideration for the sale of the immovable property but merely a provisional compensation making the taking of possession possible. The true value of the immovable property will be determined in the action for the determination of the expropriation compensation and for registration to be brought subsequently.
The collection of the money at the bank therefore does not extinguish the right to claim a higher amount.
Matters to Be Observed When Collecting the Sum
Although there is no legal obligation to do so, it is recommended in practice, in order that no doubt should arise later, that a reservation of rights be entered when the money is withdrawn or when a petition is submitted to the court.
Wording of the following kind may be used for that purpose:
"I collect the compensation with my rights in excess and my rights of action for an increase in the compensation reserved."
That reservation is regarded as a safe practice which removes the risk of a loss of rights in the action for the determination of the compensation and for registration to be brought.
The Settled Approach of the Court of Cassation
According to the settled case law of the Assembly of Civil Chambers of the Court of Cassation and of the chambers concerned with the matter (foremost among them the 5th Civil Chamber), the withdrawal from the bank of the compensation for urgent taking of possession does not produce the consequence that consent has been given to the transfer of ownership or that the compensation has been accepted. The act carried out within the framework of Article 27 is an act of determination; it does not carry the character of performance (payment of a debt).
Taking Possession of the Immovable Property
The taking of possession occurs after the compensation determined by the court has been paid into the bank account. This is the phase producing the most concrete consequence of the process for the owner, because from that moment the administration may embark upon actual disposal over the immovable property and begin to give effect to the project.
It must nevertheless be emphasised that the taking of possession does not mean that ownership has passed to the administration. What is provisionally taken over at this stage is the use of the immovable property; the transfer of ownership takes place with the conclusion of the action for the determination of the compensation and for registration to be conducted at the later stage.
Actual Entry Onto the Property After the Deposit
With the payment of the compensation in the name of the owner, the administration obtains the power to enter the immovable property in fact and may begin to use it for the purposes of the public service.
In the field this situation typically presents itself in the following forms: a site office is set up on the land, construction activities are commenced, the existing structures are demolished and the immovable property is allocated to the public service.
This is also the picture the owner most frequently encounters in the urgent expropriation process: the immovable property being opened to actual use within a short time.
Consequences of Taking Possession for the Owner
The act of taking possession produces significant legal consequences for the owner; these do not, however, mean that the right of property has been extinguished altogether.
At this stage the owner loses the possibility of making actual use of the immovable property and the power of disposal over the immovable property is narrowed. The right of property, by contrast, continues in law to remain with the owner.
In short, the taking of possession in urgent expropriation is not the extinction of the right of property but an interference of a provisional character directed at that right.
The Settlement Stage After Taking Possession
The fact that an urgent expropriation decision has been taken and possession of the immovable property has been taken does not mean that the expropriation is at an end. On the contrary, from this point onwards the administration must initiate the steps directed at taking over ownership if the process is to be concluded in law. Within this framework the administration is first obliged to operate the purchase (settlement) route.
Article 8 of the Expropriation Act No. 2942 imposes on the administration the obligation to purchase the immovable property by agreement with the owner so far as possible. Even where an urgent expropriation has been carried out, it is for this reason a compulsory step of the process for the administration to attempt the settlement route before bringing an action.
The Invitation to Settle
Following the taking of possession, the administration establishes the value of the immovable property through its valuation commission and invites the owner to negotiate with a view to reaching agreement on the compensation. The invitation is as a rule made by way of written service and the owner is asked to take part in the meeting within a certain period.
This step is the official negotiation process in which the possibility of agreement between the parties is tested before recourse is had to court proceedings in expropriation.
Drawing Up the Record
According to whether the meeting ends in agreement or not, the process proceeds in two different directions.
If Agreement Is Reached
If the parties agree on the compensation, a record of settlement is drawn up. That record is binding on the parties and makes it possible for the expropriation to be completed without an action being brought.
In such a case the agreed compensation is paid to the owner, the owner executes the conveyance at the land registry, the immovable property is registered in the name of the administration and the expropriation process comes to an end without ever reaching the litigation stage.
If Agreement Cannot Be Reached
Where no understanding is reached on the compensation, a record of non-settlement is drawn up. That document demonstrates that the legal condition required for the administration to bring an action has been fulfilled.
Thereafter, in order to be able to take over ownership, the administration must bring, pursuant to Article 10 of the Expropriation Act No. 2942, the "action for the determination of the expropriation compensation and for the registration of the immovable property in the name of the administration".
For details on the subject, reference may be made to our note entitled What Is Settlement in Expropriation? Conditions and Legal Process.
Failure to Reach Settlement: The Action for Determination of Compensation and Registration
Where no understanding is reached, the process is taken to the judicial stage and the expropriation is completed only by this action. The fact that urgent possession of the immovable property has been taken does not by itself pass ownership to the administration; while the decision on the taking of possession gives the administration only a power of use, the person appearing as owner in the land registry does not change.
The passing of ownership to the administration depends on the registration decision to be given by the court. The conclusion of the expropriation in law is therefore possible only with the conclusion of the action.
The Administration’s Obligation to Bring an Action
Where no settlement is achieved, the administration must bring an action in order to complete the process. Unless that action is brought, ownership does not pass to the administration and the expropriation is not regarded as completed in law.
The sequence followed in practice is generally as follows: a settlement meeting is first held, a record of non-settlement is drawn up when the parties fail to agree, and the administration brings its action before the Civil Court of First Instance of the place where the immovable property is situated. At the conclusion of the proceedings the court establishes the true value of the immovable property and orders its registration in the name of the administration.
In these proceedings the court’s task does not consist merely in determining a figure; it also decides upon the transfer of ownership. That is why the action is regarded as the most critical stage of the expropriation process.
The Act does not lay down a fixed period for the bringing of this action. In the case law, by contrast, it is accepted that the administration must bring the action within a reasonable time. A prolonged failure by the administration to bring an action may result in the right of property being restricted for an indeterminate period.
For detailed information, our note entitled Action for the Determination of the Expropriation Compensation and for Registration may be examined.
Failure to Bring the Action Within a Reasonable Time and De Facto Expropriation
In urgent expropriation the administration that has taken possession of the immovable property must bring the action for the determination of the compensation and for registration within a reasonable time in order to complete the process.
In the decisions of the Court of Cassation and of the Constitutional Court it is accepted that a failure to bring the principal action within a reasonable time after the urgent taking of possession may give rise to a violation of the right of property. In practice, prolonged delays — in most files periods of six months and above — may become the basis of an allegation of unlawfulness.
In such a picture the way is open to the owner: they may bring an action for de facto expropriation, claim the value of the immovable property and request that the losses suffered be made good.
In summary:
If the administration does not bring an action within a reasonable time, the expropriation is not regarded as completed in law and the owner acquires the right to bring an action on the ground of de facto expropriation.
The Rights Held by Owners
The taking of an urgent expropriation decision and the taking of possession of the immovable property do not mean that the owner has lost all their rights. The owner may exercise their legal remedies at every stage of the process and may request that the true value of the immovable property be determined.
The rights that come to the fore within this framework are addressed below.
Objection to the Compensation and Increase in the Compensation
The sum paid into the bank within the scope of an urgent expropriation is not the final expropriation compensation; it is merely a provisional consideration assessed in order to make the taking of possession possible.
In the action for the determination of the expropriation compensation and for registration brought where no settlement is achieved, the owner may object to the compensation determined by asserting that the value of the immovable property is higher.
Among the courses open to the owner during the proceedings are objecting to the expert report, requesting that a fresh expert examination be carried out, submitting to the court the comparable sales in their possession and requesting that the true value of the immovable property be reassessed.
If the final compensation determined by the court exceeds the sum paid at the time of the urgent taking of possession, the difference is paid to the owner together with interest.
The Possibility of Bringing an Action for Annulment
Where the act of urgent expropriation is unlawful, the owner may bring an action before the administrative courts seeking the annulment of the expropriation act.
The principal cases in which a request for annulment may arise are as follows:
- The condition of urgency not in fact existing
- The public interest decision being unlawful
- The act having been established in a manner contrary to the proper procedure
- The decision having been taken by an administration without authority
What is reviewed in this action is whether the expropriation act is lawful. If the administrative court annuls the act, the expropriation over the immovable property likewise falls away.
Independent Legal Assessment
In urgent expropriation files owners frequently find themselves obliged to act simultaneously before two separate branches of the judiciary: while the lawfulness of the act is argued before the administrative courts, the true value of the compensation is addressed before the civil courts. A failure to construct this dual structure correctly may mean that mistakes made at the beginning of the process cannot be made good at the later stages.
The misapprehension most frequently observed in practice is that the sum paid into the bank is taken to be the final compensation and that its collection is perceived as a waiver of rights. The act falling within the scope of Article 27 is, however, an act of determination; the argument as to the compensation proper is conducted in the subsequent action. Grasping this distinction from the outset directly affects the course of the file.
The headings to which priority should be given in a particular dispute are as follows:
- Examining whether the ground of urgency on which the urgent expropriation decision rests is concrete
- Entering the reservation of rights in accordance with the proper procedure when the compensation is withdrawn
- Reviewing technically the selection of comparables and the valuation method in the expert report
- Monitoring the date on which the administration brings the action for the determination of the compensation and for registration after taking possession
- Assessing the option of de facto expropriation where the reasonable time has been exceeded
- Not missing the time limits before the administrative courts for an action for annulment
Independent Legal provides advisory services and conducts litigation in disputes extending from the stage of taking possession through to actions for an increase in the compensation and for annulment in urgent expropriation processes.