Claims for compensation for planning damage
What claims can be pursued in the event of planning damage?
In the event of planning damage, the claims described in Article 36 of the Planning and Development Act of 27 March 2003 can be pursued.
Pursuant to Article 36 par. 1 of the above-mentioned Act, if, in connection with the enactment of a local plan or its amendment, it has become impossible or substantially restricted to use the real property or a part thereof in the current manner or for the current intended use, the owner or perpetual usufructuary of the real property may, subject to par. 2 and Article 371 the right to demand from the municipality or the administrator of the closed area if the enactment of the plan or its amendment was caused by the needs of state defence and security:
(1) compensation for actual damage suffered, or
2) redemption of the property or part of it.
Pursuant to Article 36(3) of the aforementioned Act, if, in connection with the adoption of a local plan or its amendment, the value of the real property has decreased, and the owner or perpetual usufructuary disposes of the real property and has not exercised the rights referred to in sections 1 and 2, he may demand from the municipality compensation equal to the decrease in the value of the real property.
The law therefore provides for three different claims to redress planning damage.
These claims aim at compensating only property damage. They are not intended to compensate for non-pecuniary damage, i.e. non-material damage (sometimes referred to as negative psychological experiences) resulting from the adoption or amendment of the local plan.
Claims for compensation for actual damage suffered or redemption of the property or part of it
The legislator has provided for two different claims that are alternative. This means that the both claims cannot be pursued in order to compensate the same damage, one of them has to be chosen. If one of these claims is pursued, the obligation to compensate the planning damage extinguishes. These claims arise if:
- a local development plan has been adopted or amended,
- use of the property or part of it in its present manner or in accordance with its present use has become impossible or significantly restricted,
- there is a causal link between enacting or amending the local plan and restricting or preventing the use of the property in the current manner or for its intended purpose.
The owner of the property affected by the restrictions, the co-owners or the perpetual usufructuary is entitled to assert the above claim.
The responsible entity is the municipality. Exceptionally, the responsible entity is the owner of the closed area, if the adoption of the local plan or its amendment was caused by the needs of state defence and security.
In the context of a claim for compensation for actual damage suffered, it is possible to claim compensation for property damage that is the consequence of the amendment or enactment of a local plan.
In the context of a claim for redemption of real estate, the responsible party may be required to acquire the right that has been depleted, i.e. either the right of ownership or the right of perpetual usufruct, for an appropriate price.
Claim for compensation for decrease in value of property
A claim for compensation for the reduction in the value of the real estate may be asserted in the event of disposal of the real estate after the adoption or amendment of the local plan. It may be claimed only if the aggrieved party has not previously made use of the claims described above, i.e. provided for in Article 36(1) of the above-mentioned Act, as well as of the possibility to conclude a real estate swap agreement with the municipality provided for in Article 36(2) of the above-mentioned Act. The premises of this claim are:
- a local development plan has been adopted or amended,
- reduction in the value of the property,
- the causal link between the adoption or amendment of the local development plan and the reduction in the value of the property,
- disposal of real estate,
- failure to exercise the rights referred to in Article 36(1) and (2) of the aforementioned Act.
The entity responsible for a claim for compensation for a reduction in the value of a property is always the municipality.
Legal status as at 19.06.2024
