Two rulings of 2023 recall that the legal status of a building dictates its valuation method in expropriation. In the first, a local public company expropriates co-ownership lots in a building declared irremediably unfit for habitation; the Riom court of appeal sets aside the so-called “land recovery” method, bare land value less demolition costs, because the destruction of the building is only a “possibility” the authority does not rule out reconsidering, and values by comparison. The Cour de cassation (the French supreme court for civil matters), on 13 April 2023, quashed: once a prefectoral order has declared the building irremediably unfit, article L. 511-6 of the Expropriation Code applies, and the indemnity is computed at the bare land value, less demolition costs, save the exceptions the text provides. In the second, on 9 November 2023, it approves an allowance “for unlawfulness of the buildings” on an abandoned plot where a significant part of the buildings had been put up without a permit, “even if the action for demolition were time-barred”. For the valuer, two clear rules: irremediable unfitness brings the valuation back to bare land, and the absence of a permit translates into an allowance, time-barred or not.
The facts
In the first case, the local public company of the Velay expropriates several co-ownership lots belonging to an individual within a building declared irremediably unfit by prefectoral order of 21 December 2007. The Riom court of appeal, on 26 October 2021, sets the indemnities under the classic method of comparables, setting aside the land recovery method: the complete destruction of the property, alone capable of justifying that text, results only from the authority’s assertion, the authority not ruling out another solution, and a major interference with the right of property cannot rest on a mere possibility. The local public company appealed.
In the second, joint owners of a plot burdened by a reserved site for the extension of a cemetery exercise their right of abandonment. For want of agreement on the price, the municipality applies to the expropriation judge. The Aix-en-Provence court of appeal, on 5 May 2022, finds, on the basis of an expert’s report, that a significant part of the buildings did not appear in the 1985 building permit application, and applies an allowance on the value of the property for unlawfulness of the buildings, although the action for demolition is time-barred. The owners appealed.
The decision
In the first case, the third civil chamber quashed, under articles L. 511-1, L. 511-5 and L. 511-6 of the Expropriation Code (Cass. 3e civ., 13 April 2023, no. 21-25.771, reported). For buildings declared irremediably unfit, “the value of the property is assessed, having regard to the unfitness for habitation of the expropriated premises and installations, at the value of the bare land, less the costs of their demolition, except where the owners themselves occupied the buildings declared unfit or subject to a danger order at least two years before notification of the decision provided for in article L. 511-2 or where the buildings are neither unfit, nor unfit for habitation, nor subject to a danger order”. By setting that method aside “although it had found that the building had been the subject of a prefectoral order declaring it irremediably unfit, the court of appeal breached those provisions”. The case is sent back to the Lyon court of appeal.
In the second, it dismissed the appeals (Cass. 3e civ., 9 November 2023, no. 22-18.545, reported). The court of appeal, which found “that a significant part of the buildings on the abandoned plot had been put up without a building permit, could deduce, without deciding a serious dispute, that an allowance had to be applied on the value of the property to take account of the unlawfulness of the buildings”. It “could conclude that that situation constituted a loss of value justifying an allowance for unlawfulness of the buildings, even if the action for demolition were time-barred”.
What this changes for valuation
The unfitness order triggers the method, not the authority’s project. The court of appeal wanted to wait to know whether the building would really be demolished; the Cour de cassation answers that the text applies as soon as the order exists. The valuer therefore does not have to speculate on the fate of the building: he checks the order, its irremediable character, its date, and applies land recovery. That point settled, the property still has to be valued correctly, and that is where the gaps arise.
The bare land value, then demolition. The method requires valuing the land as if free of any building, with references of building land in the area, according to its buildability at the reference date, then deducting demolition and asbestos removal costs, quantified on quotes or ratios. For co-ownership lots, each co-owner’s indemnity is his share of that net value, according to his fractions. The report details the area, the zoning, the land charge adopted and the demolition cost, item by item; the article on the three compulsory purchase rulings of spring 2026 recalls how the indemnity of a co-owned building is apportioned.
The two exceptions in the text. The owner who himself occupied the building at least two years before notification escapes land recovery and recovers an ordinary valuation; so does the building that is in reality “neither unfit, nor unfit for habitation, nor subject to a danger order”. The valuer therefore checks occupation by the owner, with supporting documents, and the actual condition of the property; in a run-down co-owned building, some lots fall under land recovery and others do not, and the report says so lot by lot.
Buildings without a permit are worth less, even safe from demolition. The allowance for unlawfulness rests on a market reality: a buyer pays less for a building he cannot regularise, extend, insure or resell without difficulty, even if nobody can any longer require its demolition. The valuer establishes the share of buildings not covered by a permit, comparing what exists with the authorisations produced, and quantifies the allowance according to what is at stake: impossibility of regularising, cost of bringing into compliance, restriction on use, resale discount. The article on the expropriation of an unlawful building shows the extreme case, where the building is not compensated at all.
The burden of proving the permit lies on the owner. The Court approves the court of appeal for having inferred the irregularity from the comparison between what exists and the 1985 permit application, “without reversing the burden of proof”. In practice, it is for the owner claiming the value of a lawful building to produce the permits and declarations; the valuer asks for them from the start of the assignment and notes in the report what has not been substantiated.
What the valuer takes from it
- As soon as an order declares the building irremediably unfit, the indemnity is computed at the bare land value, less demolition costs, without waiting for the decision to demolish.
- The owner in occupation for at least two years, or a building that is in reality neither unfit nor dangerous, escape that method.
- Buildings put up without a permit justify an allowance on the value, even if the action for demolition is time-barred.
- The allowance is reasoned by what the irregularity costs a buyer: regularisation, use, resale.
- The report compares what exists with the authorisations produced and states what has not been substantiated.
Further reading
The Compulsory purchase and pre-emption page describes the assignment, its timescale and its fee. The guide My business premises are compulsorily purchased and the glossary entries charge foncière, indemnité principale and décote complement this article. On the same theme: Compulsory purchase compensation in France: three key rulings and Compulsory purchase: ordered works, common parts, land reserve. The decisions are available on Légifrance: no. 21-25.771 and no. 22-18.545.
What next
A building under an unfitness order or buildings without a permit caught in an expropriation, and an indemnity to establish?
I apply the method the law requires for the situation of the property, bare land value, deduction of demolition costs, allowance for unlawfulness, and document each item with references, for the expropriated owner or the acquiring authority.
Free quote, by email or by phone. No commitment before the quote is accepted. Fees are never linked to the value of the property (Charte de l’expertise, Title I, §2.1).
