A public body pre-empts a property (préemption, the right of a public body to step into the buyer’s place when a property is sold), the expropriation judge (juge de l’expropriation) sets the price, the public body appeals, then decides not to buy. The seller claims damages, arguing that the withdrawal came too late. The reported decision of the Third Civil Chamber of the Cour de cassation (the French supreme court for civil matters) of 29 June 2017 answers that the withdrawal is not late as long as the appeal is pending, because the judgment setting the price is not yet final. For the seller as for the valuer, the price set at first instance is therefore not yet a sale price.
The facts
The Plaine commune inter-municipal body (communauté d’agglomération), whose rights are now held by the Plaine commune territorial public body (établissement public territorial), pre-empted a flat belonging to several owners, the sellers. As the parties could not agree on the purchase price, it applied to the expropriation judge, who set that price by judgment of 17 June 2014.
The inter-municipal body appealed. On 7 April 2015, while the appeal proceedings were under way, it withdrew from exercising its pre-emption right; on 14 April 2015, it discontinued its action (désistement).
The sellers claimed damages as compensation for the losses linked to the exercise of the pre-emption right. On 28 January 2016 the Paris Court of Appeal held that it had jurisdiction to hear that claim and ordered the inter-municipal body to pay them €7,500. Its reasoning: since the public body had discontinued its action, and therefore its appeal, the date on which the price was judicially set was that of the first-instance judgment; the withdrawal, made more than two months later, was therefore late. The territorial public body appealed to the Cour de cassation.
The decision
The Cour de cassation partly quashed the judgment (Cass. 3e civ., 29 June 2017, appeal no. 16-14.622, reported), under article L. 213-7 of the French Planning Code (code de l’urbanisme). That article gives the parties, after the price has been set by a court, a period of two months from the day the decision has become final to accept the price set or to abandon the transfer.
The Court of Appeal had looked at the date of the first-instance judgment. The Cour de cassation looked at the date of the withdrawal: the Court of Appeal breached that article, “whereas, on the date on which the inter-municipal body withdrew from the pre-emption, the appeal proceedings were still pending, so that the judgment had not become final” (translated from the French). The order to pay €7,500 in damages was quashed, and the case was sent back, on that point, to the Versailles Court of Appeal.
Two points limit the scope of the decision. First, the withdrawal of 7 April 2015 came before the discontinuance of 14 April: the Court does not say on what date the judgment becomes final when the appellant discontinues before withdrawing. Second, it does not decide which court has jurisdiction over a claim for damages linked to a late withdrawal. The territorial public body argued that only the administrative courts did. The Court set that objection aside without examining it: the public body had raised it too late, after another defence, contrary to article 74 of the French Code of Civil Procedure. The Court noted that the Court of Appeal’s reasons on that point were “rightly criticised” (translated from the French), without saying whether the ordinary courts or the administrative courts have jurisdiction.
What this changes for valuation
The price set at first instance is not yet a sale price. While the appeal is pending, and then for two months after the final decision, the holder of the pre-emption right can still withdraw. Here, the withdrawal came almost ten months after the judgment setting the price, without being late. The valuation report produced before the expropriation judge serves to set a price; it does not guarantee the sale. The valuer points this out in the conclusions, and the seller bears it in mind before any other purchase.
The valuation date and the sale date come apart. The price of a pre-empted property is set according to its condition on the day of the first-instance judgment, as the 2025 decision discussed in Pre-emption price in France: run-down common parts count confirms. If the appeal drags on and the public body then withdraws, the property returns to the market at a much later date. The seller then needs a value at that new date: the market, the condition of the property and its occupation may have changed. The original report is dated and cannot be reused without an update.
The appeal on the price reopens the debate on method. On appeal, the price can be recalculated, and the public body can still withdraw while the proceedings are under way. The method rules that frame the price, comparables falling under the same planning rules, discount for occupation, agency fee, are set out in Pre-emption in France: comparables under the same planning rules. The arithmetical consistency of the calculation is itself reviewed, as Pre-emption price: an inconsistent total, a distorted judgment shows.
A claim based on a late withdrawal first requires the lateness to be established. The period runs from the day the decision setting the price has become final, not from the first-instance judgment. Before quantifying a loss attributed to a late withdrawal, that date must therefore be established. The decision says nothing about other possible bases of liability, nor about the existence or the measure of such a loss; where it is argued, the assessment rests on dated values, established by comparison, and not on the price set at first instance alone.
Other mechanisms, other rules. The withdrawal of the holder of the urban pre-emption right is not the same as the seller’s withdrawal in a pre-emption by the SAFER (the rural land agency), governed by the French Rural Code: there, the seller who has applied to the court for a review of the price within the six-month period may withdraw the property at any stage of the proceedings, as explained in SAFER pre-emption at a revised price: withdrawal before judgment. Nor is it the same as the right to require purchase (délaissement), where the owner gives the public body formal notice to buy: see Right to require purchase in a ZAC ends if property is excluded.
What the valuer takes from it
- While the appeal on the price is pending, the judgment is not final and the pre-empting body’s withdrawal is not late.
- The two-month period of article L. 213-7 of the French Planning Code runs from the day the decision setting the price has become final.
- The price set by the judge does not guarantee the sale; the report reminds the seller of this.
- The report dates its value; if the property returns to the market after a withdrawal, a valuation at the new date is needed.
- This decision does not settle which court has jurisdiction over a claim for damages based on a late withdrawal.
Further reading
The Compulsory purchase and pre-emption page describes the assignment, how it runs and its fee. The guide Public bodies and pre-emption: setting a defensible price and the glossary entries droit de préemption, juge de l’expropriation and date de valeur complement this article. The two other 2017 decisions discussed separately: Pre-emption in France: comparables under the same planning rules and Right to require purchase in a ZAC ends if property is excluded. On the same theme: Pre-emption price in France: run-down common parts count and Pre-emption price: an inconsistent total, a distorted judgment. The decision is available on Légifrance.
What next
A pre-empted property whose price is under appeal, or which the public body has finally decided not to buy?
I value the pre-empted property at the date used by the judge and, if the public body withdraws, at the date it returns to the market, so that the seller, the public body or their lawyer argue on dated and supported values.
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).
