A plot zoned as buildable by the local plan (plan local d’urbanisme, PLU) is compulsorily purchased (expropriation) although, at the reference date (date de référence), a holding perimeter pending an overall development project (périmètre d’attente d’un projet d’aménagement global) limited building on it. The acquiring authority wants to deduct a loss of value; the Court of Appeal refuses to take that limitation into account. In a reported decision of 28 September 2023, the Third Civil Chamber of the Cour de cassation (the French supreme court for civil and commercial matters) settles the point: only permanent easements and administrative restrictions enter the valuation of building land. For the valuer, each constraint must be characterised before it is quantified.
The facts
By prefectoral order of 13 January 2021, a plot belonging to a property company (société civile immobilière, SCI) was declared transferable for public utility to the public development agency Bordeaux Euratlantique. The expropriation judge (juge de l’expropriation) ordered the transfer of ownership on 30 March 2021; as the compensation offer was not accepted, the agency applied to the judge to set the compensation for dispossession.
At the reference date, set at 26 May 2016, the plot was classified in buildable zone UDp3 of the local plan, but lay within a holding perimeter pending an overall development project, which limited building possibilities. According to the appeal, this temporary limitation was lifted on 16 November 2017.
The Bordeaux Court of Appeal, by a judgment of 27 April 2022, set the compensation without taking that limitation into account; the Cour de cassation’s decision gives neither the area of the plot nor the amount awarded. The agency appealed: in its view, building possibilities are assessed at the reference date, and the perimeter, which existed at that date, limited “building possibilities drastically” (translated from the French, as are all quotations below).
The decision
The Cour de cassation dismissed the appeal (Cass. 3e civ., 28 September 2023, appeal no. 22-21.012, reported).
It starts from article L. 322-4 of the Expropriation Code, which brings into the valuation of building land the easements affecting land use, including administrative restrictions on the right to build, “unless their institution reveals, on the part of the acquiring authority, a fraudulent intent”. It observes: “This text does not specify whether the easements to be taken into account at the reference date must be permanent.” Article L. 322-2, for valuation according to actual use, by contrast retains only the easements and restrictions “permanently affecting the use or exploitation of the property at the reference date”.
Yet the parliamentary debates preceding Law no. 85-729 of 18 July 1985 show that “the legislature intended to align the valuation of land according to its actual use and that provided for building land as regards the taking into account of easements”. Hence the rule: “only permanent easements and administrative restrictions must be taken into account for the valuation of building land”.
It deduces from this that “the easement arising from the existence of a holding perimeter pending an overall development project, which is temporary and becomes unenforceable against the owner by the mere passage of time, does not constitute an element of loss of value and need not be taken into account in valuing the land”. Applying the rule to the case, it holds that the Court of Appeal “rightly held that this temporary limitation was not to be taken into account in valuing the plot”.
The Court does not rely on the lifting of the perimeter in November 2017: it is the temporary nature of the easement that excludes it. It does not rule on the amount of compensation.
What this changes for valuation
Classify, then value. Article L. 322-3 decides whether the land is building land; article L. 322-4 decides how to value it once classified. The decision concerns the second: the plot, in zone UDp3, was building land. The classification of a plot in a red zone, despite a draft revision of the risk prevention plan (plan de prévention des risques, PPR), is the subject of another 2023 decision, discussed in Expropriated red-zone land: a draft risk plan does not count; proof of utilities is dealt with in Compulsory purchase in a ZAC: who must prove the utilities?.
The test: does the restriction lapse by itself? The holding perimeter is the typical example of a temporary restriction: article L. 151-41, 5° of the Planning Code (code de l’urbanisme) limits it to five years at most, pending approval by the municipality of an overall development project. The decision rules only on that perimeter and says nothing about other constraints, but its test, an easement that becomes unenforceable “by the mere passage of time”, can serve as a grid for examining them. The report lists the easements and restrictions in force at the reference date, with their source and date, and characterises each.
The land is valued without the holding perimeter. The building rights retained are those of the buildable zone, with no discount for the temporary limitation. The comparables are building plots subject to the same planning rules, a requirement recalled in pre-emption cases in Pre-emption in France: comparables under the same planning rules. A sale concluded within the same perimeter while it was in force may have built the limitation into its price: the report flags it, then sets aside or adjusts that reference. Otherwise, the loss of value refused in law would come back through the comparables.
One rule for both categories of land. Article L. 322-2 already required permanence for valuation according to actual use; the decision reads the same requirement into article L. 322-4. The sorting between permanent and temporary restrictions is therefore the same for all expropriated land, at the reference date. On the reference date for a property subject to the urban pre-emption right (droit de préemption urbain), see Building land and pre-emption: the same reference date applies.
The proviso of the authority’s fraud. Even a permanent restriction is set aside if its institution reveals a fraudulent intent (intention dolosive) on the part of the acquiring authority, that is, if it was instituted in order to depreciate the land and lower the compensation. Where a restriction was instituted shortly before the operation by the authority carrying out the purchase, the valuer sets out the chronology; the judge draws the consequences. The decision did not have to apply this proviso.
What the valuer takes from it
- In valuing expropriated building land, only permanent easements and administrative restrictions are taken into account.
- A holding perimeter pending an overall development project, temporary and bound to lapse with time, is not an element of loss of value, even if it existed at the reference date.
- The report lists the restrictions burdening the land at that date, with their source, and characterises each as permanent or temporary.
- Comparables are chosen or adjusted so as not to reintroduce the temporary limitation that was set aside.
- Classification as building land (article L. 322-3) and its valuation (article L. 322-4) are two steps that the report deals with separately.
Further reading
The Compulsory purchase and pre-emption page describes the assignment, its timescale and its fee. The guide Pre-emption by a public body in France: setting a defensible price and the glossary entries date de référence, moins-value and juge de l’expropriation complement this article. The decision of 8 June 2023 on the red-zone plot is discussed in Expropriated red-zone land: a draft risk plan does not count. On the same theme: Compulsory purchase in a ZAC: who must prove the utilities? and Building land and pre-emption: the same reference date applies. The decision is available on Légifrance.
What next
Is a planning restriction being used to reduce the compensation for your expropriated land?
I list the easements and restrictions that burdened the land at the reference date, separate the permanent ones from the temporary ones and value the building land accordingly, for the memorandum before the expropriation judge.
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