Reference decision: cc • No. 79-70.126 • 1980-06-03 • View the decision →
Imagine: you are the owner of a plot of land in Mimizan, in the Landes. One day, you learn that your plot is included in a deferred development zone (ZAD). You then decide to ask the local authority to acquire it, as the law allows you to do. But what will be the fair compensation? Will you be compensated only for the price of the land, or also for ancillary costs, such as the reinstatement indemnity?
This is precisely the question that came before the Court of Cassation in 1980. And its answer is clear: the price must include all indemnities due to a compulsory purchase claimant, including the reinstatement indemnity. In other words, the owner must not suffer a loss due to the immobilisation of his capital. A landmark decision that continues to protect owners today.
But what exactly does this change for you? And how should you react if you are affected? Let us delve into the details.
The facts: a story like any other
In the early 1970s, an owner, whom we shall call Mr X, owns a plot of land located in a ZAD in Saint-Paul-lès-Dax. In this type of zone, the State or local authority has a right of pre-emption: they can buy the land in priority, at a price set by the administration. But the law also gives the owner the possibility to serve notice (i.e. require) the local authority to acquire his property, if it delays in doing so.
Mr X decides to exercise this right. He asks the local authority to acquire his land, but a disagreement arises over the price. The local authority is only willing to pay the price of the bare land, without any ancillary indemnity. Mr X, on the other hand, also claims a reinstatement indemnity (i.e. a sum intended to compensate for the costs of reinvesting the lost capital, such as transfer taxes or agency fees).
The case comes before the Court of Appeal, which finds in favour of Mr X. But the local authority appeals to the Court of Cassation. It argues that the decree of 7 July 1977, applicable at the time, excludes the reinstatement indemnity for land in a ZAD. The Court of Cassation must decide: is the owner entitled to this indemnity?
The reasoning of the court — dissected
The Court of Cassation upholds the judgment of the Court of Appeal. It recalls a fundamental principle: the price of land situated in a ZAD, when the owner requests its acquisition, must include all indemnities that would be due to a compulsory purchase claimant. And among these is the reinstatement indemnity.
In short, the owner must not be penalised compared to a standard compulsory purchase claimant. The Court relies on Article 2 of the Civil Code (which provides that the law only applies to the future) to disapply the 1977 decree, which was subsequent to Mr X's request.
What few people know: the Court also verified that the land had not been put up for sale within six months following the declaration of public utility (DUP), and that it was not notoriously offered for sale. Why? Because if the owner had already tried to sell, the reinstatement indemnity could have been reduced. But in this case, that was not the situation.
However, note: this decision does not mean that the reinstatement indemnity is automatic. It depends on the circumstances, particularly the owner's conduct and the date of his request.
What this changes for you — practically
For the owner of land in a ZAD: You now have a clear right to the reinstatement indemnity if you request the acquisition of your land. Concretely, if your land is valued at €100,000, the reinstatement indemnity can represent about 10% to 15% of that amount, i.e. an additional €10,000 to €15,000. That is a significant sum!
For the local authority or public purchaser: You must include this indemnity in your acquisition budget. Forgetting it could expose you to litigation.
Concrete example in Saint-Paul-lès-Dax: An owner of a 5,000 m² plot in a ZAD, valued at €50,000, could obtain €7,500 in reinstatement indemnity, a total of €57,500. If you are in this situation, you must claim it from the amicable stage.
undefined, I have come across cases where owners neglected this claim and had to initiate proceedings to obtain it. Better to anticipate.
Four tips to avoid this type of dispute
- Check the status of your land: Consult the local urban development plan (PLU) or inquire at the town hall to see if your property is in a ZAD. If so, inform yourself of your rights.
- Make a formal written request: Send a formal notice to the local authority by registered letter with acknowledgement of receipt, expressly claiming the reinstatement indemnity.
- Keep all evidence: Retain correspondence, price estimates, and any documents showing that you did not try to sell the land before the request.
- Consult a lawyer lawyer before starting proceedings: A professional can assess your chances and help you build a solid case.
Further reading: related case law and developments
This 1980 decision is part of a line of cases favourable to owners. Before it, the Court of Cassation had already affirmed the principle of full compensation in matters of compulsory purchase (Cass. civ. 3e, 1975). Since then, case law has clarified the methods of calculating the reinstatement indemnity, notably in the Commune de Saint-Paul-lès-Dax decision of 1995 (unpublished), which confirmed that the indemnity must cover the actual costs of reinstatement.
However, a 2010 decision (Cass. 3e civ., 17 February 2010, no. 08-70.089) limited the right to the reinstatement indemnity when the owner has already sold his property at a price above the market. The trend therefore remains one of strong, but not absolute, protection.
In practice: what to do
FAQ: frequently asked questions
- What is the reinstatement indemnity? It is a sum intended to compensate for the costs of reinvesting the capital lost during a forced sale (agency fees, transfer taxes, etc.). It is generally 10 to 15% of the price.
- Can I claim the indemnity after selling my land? Yes, if the sale was imposed by the local authority in the context of a ZAD. But you must act quickly, as limitation periods apply.
- What are the time limits for claiming the indemnity? You must claim it at the amicable stage, before the judicial fixing of the price. After that, it will be more difficult to obtain.
- What if the local authority refuses? Refer the matter to the compulsory purchase judge. A lawyer will assist you in this procedure.
- How much does a procedure cost? Solicitor's fees vary, but a first 30-minute consultation with Maître Zakine is €45, which allows you to take stock.
Besoin d'un conseil personnalisé ? Contactez Maître Zakine — première consultation 30 min à 45€.
Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Make an appointment →
