Illegal Construction and Expropriation: Deduction from Land Value Even After Limitation Period

Imagine for a moment: you are the owner in Vauvert, in the Gard department, of a plot where you built a residential house thirty years ago. You have always paid your property taxes, and no one ever said anything. One day, the municipality initiates an expropriation procedure to build a bypass road. The expert values your land at €200,000. But the expropriation judge decides to apply a 30% deduction because your construction, dating from 1985, does not have a valid building permit. You think to yourself: "But the action for demolition has been time-barred for twenty years! The defect is erased!" Wrong.

The question every owner in this situation asks is simple: does the fact that the municipality can no longer require the demolition of my illegal construction (because the ten-year period has passed) mean that this illegality no longer affects the value of my property? The answer from the Court of Cassation, in a judgment of 9 November 2023, is unequivocal: no. The limitation period for the demolition action does not prevent the expropriation judge from taking into account the irregularity of the construction to reduce the value of the land, via a deduction.

What does this mean in practice? That even if you escape demolition, the illegality of your construction continues to weigh on your assets, especially in the event of expropriation. An analysis of a decision that will set a precedent.

The Facts: A Story That Happens Every Day

Take the case of Mr. X, owner of a plot of land in Saint-Gilles, in the same Gard department. In 1979 and 1985, he obtained tacit building permits to erect constructions. But these permits were tainted with irregularities: the 1985 application mentioned an area that did not comply with the local urban development plan. For years, the municipality said nothing. Until the day it initiated an expropriation procedure for a planned development zone (ZAC).

The expropriation judge then assessed the value of the land but applied a 40% deduction to take account of the illegal nature of the constructions. Mr. X challenged this, arguing that the action for demolition had been time-barred since 1995 for the 1985 construction, and therefore the illegality could no longer be invoked. The Nîmes Court of Appeal agreed with him on this point, but the Court of Cassation overturned that decision.

The twist? The High Court recalled that the limitation period does not erase the illegality: it only prevents a claim for demolition. But the illegality remains as a legal fact, and the expropriation judge can take it into account when determining the value of the property, because expropriation compensates for actual loss, not a fictitious value.

The Court's Reasoning — Analysed

The Court of Cassation relies on Article L. 322-1 of the Expropriation Code, which provides that the expropriation compensation must cover the entirety of the direct, material and certain loss caused by the expropriation. However, if a construction is illegal (for example, without a building permit or in violation of planning rules), it reduces the market value of the land, because a potential buyer would face a risk of non-compliance, even if demolition is no longer possible.

The legal basis for the illegality lies in Article L. 480-4 of the Urban Planning Code, which penalises constructions without a permit. But the limitation period for public prosecution (10 years) does not erase the irregularity on the civil level. The Court therefore distinguishes between two things: the action for demolition (which is subject to limitation) and the assessment of the property's value (which remains free).

The judges rejected Mr. X's argument that the limitation period precludes any deduction. They stated that the expropriation judge does not have to rule on a serious dispute about demolition: it is enough for him to note that the construction is illegal to infer a deduction. This is an application of the principle of full compensation: the compensation must not compensate for a value that does not exist on the market.

This decision confirms a jurisprudential trend already underway: the Court of Cassation had already ruled in 2019 that the absence of a building permit could justify a deduction (Civ. 3e, 12 September 2019, No. 18-19.876). But here, it goes further by specifying that the limitation period does not change anything. This is an important development, as it closes the door to a frequent challenge by expropriated owners.

What This Changes for You — Practically

For owners: if you are expropriated and your construction is irregular (even old), expect the judge to apply a deduction. Let's take a numerical example: in Saint-Gilles, a 1,000 m² plot with a 100 m² house built without a permit in 1990 is valued at €150,000. With a 30% deduction, you will only receive €105,000. That is a loss of €45,000. For landlord owners: if you rent out an irregular property, the deduction will also apply in case of expropriation, reducing your compensation.

For buyers: if you buy a plot with an old construction, check the permits. Even if demolition is no longer possible, the illegality can affect the resale value or the expropriation compensation. For co-owners: if a common area was built without authorisation, this can reduce the value of the units.

If you are in this situation, you should: 1) Gather all planning documents (permits, certificates of compliance); 2) Have the property valued by an expert who will take account of the illegality; 3) Negotiate with the expropriating authority in advance to limit the deduction; 4) Challenge the deduction if the judge applied it without proof of illegality.

Four Tips to Avoid This Type of Dispute

• Check your building permits: even a tacit permit must comply with the local urban plan. Request an operational planning certificate to find out the applicable rules.
• Regularise your situation: if your construction is irregular, file a modified building permit or a prior declaration. This can avoid a deduction in case of future expropriation.
• Keep all your documents: retain permits, plans, and certificates of non-contestation for at least 30 years. In case of expropriation, they will prove regularity.
• Anticipate expropriation: if you know your land is in a development zone, have the property valued by an expert before the procedure to know its real value, with or without deduction.

Further Analysis: Related Case Law and Developments

This decision is part of a line of case law that is harsh on owners. In 2020, the Court of Cassation already ruled that the limitation period for demolition action did not prevent a claim for compensation for abnormal neighbourhood disturbance (Civ. 3e, 10 December 2020, No. 19-22.517). Here, the same principle is applied to expropriation.

Conversely, the Conseil d'État held in 2018 that the administrative judge could not order the demolition of a time-barred construction (CE, 22 March 2018, No. 398587). But the Court of Cassation, in civil matters, takes a different approach: it distinguishes between demolition (penalty) and compensation (reparation).

The trend is therefore clear: civil judges are increasingly inclined to take into account the illegality of constructions, even old ones, to reduce compensation. This means that owners must be more vigilant than ever about the compliance of their properties.

Checklist Before Taking Action

1. Do I have a compliant building permit? Check the date, area, height. If not, consult a lawyer for regularisation.
2. Is my property in an expropriation zone? Consult the local urban plan of your municipality (in Vauvert or Saint-Gilles, for example) to see if a project is planned.
3. What is the limitation period? The action for demolition is time-barred 10 years from completion of the works. But this does not protect against a deduction.
4. Can I challenge the deduction? Yes, if the expropriating authority does not prove the illegality or if the deduction is disproportionate. A lawyer can help you.

Are you in a similar situation? A 30-minute initial consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →