A building declared irremediably insanitary (insalubre à titre irrémédiable) is compulsorily purchased (expropriation), but nothing yet guarantees that it will be demolished. Should the lots be valued as homes, by comparison, or as a site to be cleared? On 13 April 2023, the Third Civil Chamber of the Cour de cassation (the French supreme court for civil matters) answered that the order declaring the building insanitary is enough: the value is computed at the bare land value, less demolition costs, save the exceptions provided by the text, whatever the uncertainty about demolition. For the valuer, the legal status of the property dictates the method, not the acquiring authority’s plans.
The facts
Several co-ownership lots (lots de copropriété) belonging to an individual, in a building declared irremediably insanitary, were compulsorily purchased for the benefit of the Société publique locale du Velay, a local public company. According to the appeal, the order is dated 21 December 2007; the Cour de cassation specifies that it is a prefectoral order (arrêté préfectoral).
On 26 October 2021 the Riom Court of Appeal set the compensation due to the owner, setting aside the valuation method laid down by article L. 511-6 of the French Compulsory Purchase Code (Code de l’expropriation pour cause d’utilité publique), known as “land recovery” (récupération foncière). It held that the complete destruction of the property, the only thing capable of justifying the application of that text, rested solely on the acquiring authority’s assertion, the authority not ruling out another solution, and that, faced with a major interference with the right of property, it could not be satisfied with a “mere possibility” (translated from the French). According to the appeal, it then valued the property using the classic method of comparables.
The local public company appealed to the Cour de cassation: in its view, the established order required the bare land value, less demolition costs.
The decision
The Third Civil Chamber quashed the judgment in its entirety, relying on articles L. 511-1, 1°, in the version applicable to the case, L. 511-5 and L. 511-6 of the Compulsory Purchase Code (Cass. 3e civ., 13 April 2023, appeal no. 21-25.771, reported).
It recalled how the texts fit together. The first allows the compulsory purchase of buildings declared irremediably insanitary under article L. 1331-28 of the French Public Health Code. The second refers, for compensation, to articles L. 242-1 to L. 242-7 and to Book III of the code, “subject to the provisions of article L. 511-6”. The third lays down the rule specific to those buildings: in calculating the compensation due to owners, “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 entailed by their demolition, except where the owners themselves occupied the buildings declared insanitary 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 insanitary, nor unfit for habitation, nor subject to a danger order”.
It then held that, by setting that method aside, “although it had found that the building had been the subject of a prefectoral order declaring it irremediably insanitary, the Court of Appeal breached the above-mentioned provisions”. It found no need to examine the second argument of the appeal and sent the case back to the Lyon Court of Appeal.
The decision settles a question of method: it sets no amount and says nothing about the value of the land or the cost of demolition. Nor does it say whether either of the exceptions in the text could apply to the owner: the Court did not rule on that point.
What this changes for valuation
The order triggers the method, not the authority’s plans. The Court of Appeal wanted certainty about demolition; the Cour de cassation looks only at the prefectoral order. The valuer therefore does not have to speculate on the fate of the building, nor to value the lots by comparison with flats in usable condition. The valuer checks the order: who issued it, its date, its irremediable character, any later acts that may have amended it. The words “in the version applicable to the case” also signal that the text has changed: the report states the version applied.
The bare land, valued under the ordinary rules. For everything else, article L. 511-5 refers to Book III of the code. The land is therefore assessed as if free of any building, according to its planning rules and at the reference date (date de référence), from sales of comparable land in the area or, in dense urban areas, from a reasoned charge foncière (land value per square metre of permitted floor area). Land plays the same central role, on a different legal basis, when an unlawful building gives rise to no compensation for the building.
Demolition costs, item by item. The text deducts the “costs entailed by their demolition”. The valuer quantifies them on quotes or sourced ratios: demolition, removal of rubble, asbestos removal if the surveys require it, protection of party walls. For co-ownership lots, the valuer then allocates the net value to each lot according to its share of the common parts (tantièmes), of which the ground normally forms part. Outside this regime, a compulsorily purchased lot is valued by comparison, at a price per square metre that already includes the common parts, as the article on the compulsorily purchased co-ownership lot explains.
The exceptions, examined lot by lot. An owner who personally occupied the building at least two years before notification escapes the bare land value; so does a building that is in reality neither insanitary, nor unfit for habitation, nor subject to a danger order (arrêté de péril). The compensation then reverts to the general rules to which article L. 511-5 refers. In a run-down co-owned building, the valuer gathers the evidence of occupation and the report states, lot by lot, which method applies. Rehousing accepted by an owner-occupier follows its own rules, set out in the article on the rehoused expropriated owner.
Insanitary and unlawful are not the same. Unlawfulness alone does not trigger the article L. 511-6 method: putting up part of the buildings without a permit may justify a discount on the value of the property, a question settled by another 2023 decision, discussed in the article on unauthorised buildings and the purchase notice (délaissement, the owner’s right to require a public body to buy).
What the valuer takes from it
- As soon as a prefectoral order has declared the building irremediably insanitary, compensation is computed at the bare land value, less demolition costs; for a recent order, the valuer checks the current wording of articles L. 511-1 and L. 511-6.
- Uncertainty about the acquiring authority’s intention to demolish does not allow that method to be set aside.
- The two statutory exceptions, owner-occupation for at least two years before notification and a building that is neither insanitary, nor unfit for habitation, nor subject to a danger order, are checked lot by lot.
- The report cites the order, details the bare land value and its references, then the demolition cost item by item.
Further reading
The Compulsory purchase and pre-emption page describes the assignment, how it runs and its fee. The guide My business premises are compulsorily purchased, which also sets out the stages of compulsory purchase proceedings, and the glossary entries indemnité principale, charge foncière and date de référence complement this article. On unlawful buildings: Unauthorised buildings: discount despite time-barred demolition. On the same theme: Compulsory purchase of an unlawful building: no compensation due and Rehoused expropriated owner: allowance for rehousing only. The decision is available on Légifrance.
What next
A building declared irremediably insanitary is being compulsorily purchased, and the compensation has yet to be established?
I check the order and the exceptions the law provides, then apply the method it requires, bare land value less demolition costs, documenting 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).
