Compulsory purchase (expropriation)

Expropriation (compulsory purchase) is the power of the French State, local authorities and certain public bodies to take a property from its owner, against his will, to build a road, a school, a development, social housing or any other scheme recognised as being in the public interest. The owner cannot oppose it once the public interest has been declared, but he is entitled to compensation that makes good his loss in full, and which must be paid before possession is taken.

The procedure has two phases. The administrative phase leads to the déclaration d’utilité publique (declaration of public interest) and the transferability order; it falls to the administrative courts. The judicial phase, before the expropriation judge, transfers ownership by order and fixes the compensation if no amicable agreement is reached. It is in this second phase that the valuer acts.

Where the rule comes from

Article 17 of the Declaration of the Rights of Man and of the Citizen makes any deprivation of property conditional on public necessity and on fair compensation paid in advance. Article L. 1 of the French Expropriation Code restates these conditions. Article L. 321-1 provides that the compensation awarded covers the whole of the direct, material and certain loss caused by the compulsory purchase. Article L. 322-1 requires the compensation to be fixed according to the condition of the property at the date of the order transferring ownership; article L. 322-2 has it valued at the date of the first-instance decision, but according to the actual use of the property at the reference date, one year before the opening of the public inquiry.

The Charte de l’expertise en évaluation immobilière (French property valuation charter, Title III § 1.20) describes the principal compensation, close to the market value of the property in its state of occupation, and the ancillary heads of compensation.

In a valuation report

The report, often produced as a memorandum for the expropriated owner’s lawyer, first classifies the property at the reference date: building land or not, actual use, privileged situation. It values the principal compensation by comparison with sales of property of the same kind, at the date closest to the judgment. It then quantifies each ancillary head: reinvestment allowance, loss of value of the retained land where the taking is partial, loss of rent, removal costs, trading disturbance for a business. Each head refers to a provision and a document, because the government commissioner will produce a competing valuation.

Example

A municipality expropriates a 95 m² house on 600 m² of land to widen a road and create a car park. The municipality offers €180,000. The owner’s valuer adopts, from seven comparable sales, a market value of €215,000. He adds the reinvestment allowance on the usual scale, €22,500, and removal costs on quotes, €3,200. The memorandum concludes at €240,700. The judge will fix the compensation after hearing the parties and the government commissioner, and after visiting the site.

Not to be confused with

Pre-emption, where the owner has chosen to sell and the authority steps into the buyer’s shoes, the price being fixed under the rules of compulsory purchase if there is no agreement; and the public easement, which restricts use without transferring ownership.