Compulsory purchase

01.13.2017

Compulsory purchase is a procedure by which a public corporation (the state, local authorities, etc.) may require a private individual or legal entity to transfer title to an asset that they own, for a purpose of public utility previously established and by means of an indemnity fixed amicably or by the judicial judge.

The French expropriation code defines expropriation as follows: "Expropriation, in whole or in part, of immovables or real rights in immovable property may be imposed only on condition that it satisfies a public purpose beforehand and Formally ascertained following an investigation and that the determination of the parcels to be expropriated and the search for owners, right holders and other interested persons was carried out, inter partes. It gives rise to a just and prior indemnity. "

  • What conditions must be met before a compulsory purchase can be made?

    • Given that a compulsory purchase order infringes the owner's property rights, purchases of this type may only be made if the goal pursued is in the public interest and if the owner receives fair, prior compensation. The courts consider that a goal is in the public interest if:
      -Ÿ the project is genuinely justified;
      -Ÿ it is unavoidable;
      -Ÿ the infringement of the rights of the person concerned is not disproportionate when set against the project's objective.
      Expropriation is legal only if it is justified by public utility.

    • Various schemes have been deemed to be in the public interest, such as: the creation of a municipal housing development or a children's summer camp site; the creation of industrial or artisanal parks; the creation of green spaces or stretches of water; improvements to the public highway; etc.

    • However, if an operation is purely private, and its sole purpose is to generate profit without providing any benefit for the community, it will not be deemed to be in the public interest.

  • Who can purchase property by this means?

    • All of the following bodies may pursue compulsory purchases:
      -Ÿ the state;
      -Ÿ local authorities (regions, departments, municipalities);
      -Ÿ Public institutions and public interest groups
      - Some persons of private law in charge of a public service mission. Examples: Social security funds, public works concessionaires, 

  • How is a compulsory purchase carried out?

    • The procedure falls into two stages:

      1.Ÿ The first stage is administrative. The aim is to check that the project is in the public interest and to determine which properties are concerned. When all the conditions have been met, two administrative documents are prepared which authorise the procedure to continue: a declaration of public interest (which is displayed at the town hall, and which may be appealed against before an administrative tribunal) and a decision confirming that the property may be transferred (which is sent to the person concerned in order to inform them that the property may be transferred to the compulsory purchaser).

      Ÿ2. The second stage is judicial, involving two actions by the compulsory purchase judge. Initially, the judge orders the transfer of the property by means of a compulsory purchase order, and then they determine the amount of the compensation.

  • Is it possible to proceed by mutual agreement?

    • Certainly, it is always in the interest of the purchaser and the owner of the property concerned to reach a mutual agreement. There is nothing to prevent the owner from selling their property to the compulsory purchaser under jointly determined terms and conditions and by agreeing on the amount of compensation. A sale of this type will have the same legal effect as a compulsory purchase order issued by a judge, while avoiding lengthy, traumatic and expensive legal proceedings.

See also
29.11.2016
The letter of the notaries of France in the world / November 2016
25.01.2017
French property market report / N°34