Subdivision schemes: the local authority is not a co-allottee, the scheme deeds of covenant do not apply

A green space, formerly an integral part of a subdivision scheme, transferred to the local authority pursuant to the scheme's deed of covenant, then reintegrated into the local authority's private estate following disuse, before being sold to a third party. This is the scenario, technical in appearance, that the Cour de cassation, sitting in Paris, had to rule on on 3 September 2026. Behind this case lies a question that many subdivision plot owners ask themselves without realising it: does a local authority that recovers the roads and common areas of a subdivision scheme also become subject to the rules that the plot owners imposed on one another?

For this is indeed the whole issue. A subdivision scheme rests on a founding document, the deed of covenant (cahier des charges), which sets out the rights and obligations of each plot owner towards the others — referred to as "co-allottees" (colotis). But when the roads, networks and green spaces of the subdivision are transferred to the local authority, does the latter become a co-allottee like any other, bound to comply with this deed of covenant? Can it, for example, freely sell land it has received, or can the co-allottees oppose this in the name of the original purpose fixed at the time the subdivision scheme was created?

The Cour de cassation's answer is clear-cut, and deserves to be known by every subdivision plot owner, every prospective purchaser of a local authority plot originating from a subdivision scheme, and every property professional tasked with securing a sale in this context.

The facts: a story that happens every day

The dispute originates in a classic subdivision scheme: a deed of covenant organising relations between co-allottees, providing in particular for the transfer back to the local authority of roads and common areas, including a green space. In accordance with these stipulations, this green space was indeed transferred to the local authority, then incorporated into its public domain — that is to say, allocated to a protected collective use, in principle inalienable and not subject to acquisition by prescription.

But things evolved. This green space was found to have fallen into genuine disuse: it was no longer being used in accordance with its original purpose. The direct legal consequence was that the local authority declassified it, thereby removing it from the public domain to incorporate it into its private estate — an asset that the local authority may then manage, and possibly sell, as an ordinary private owner would. This declassification was not challenged by the co-allottees within the applicable time limits.

The local authority then sold this now-private asset to a third party. It was this sale that some co-allottees challenged before the courts, invoking the subdivision scheme's deed of covenant to argue that the local authority could not freely dispose of this land, which they claimed was allocated to a green-space purpose that had to be respected. The case went up to the Court of Appeal, which dismissed their claim, and then to the Cour de cassation, with the co-allottees arguing that the lower courts had breached Article 1134, now Article 1103, of the French Civil Code (which establishes the binding force of contracts) as well as Article R. 442-7 of the French Town Planning Code relating to the management of common facilities in subdivision schemes.

The court's reasoning — unpacked

The Cour de cassation lays down a clear principle: a local authority to which the entirety of the roads and common areas of a subdivision scheme is transferred back, pursuant to the deed of covenant, is not a co-allottee. In other words, the mere fact of receiving these assets does not bring the local authority into the contractual circle of plot owners. It remains a third party in relation to this subdivision contract.

Why is this distinction so important? Because the stipulations of a deed of covenant are a matter of contract law — they bind, in principle, only the parties who consented to them, or their successors in title as co-allottees. Article 1103 of the Civil Code (formerly 1134), which proclaims that contracts "have the force of law between the parties", only takes effect between those same parties. A local authority that acquires assets in performance of this deed of covenant does not thereby become a party to the subdivision contract. The rules intended to organise relations between co-allottees are therefore not enforceable against it.

The Cour de cassation then relies on the mechanics specific to the public and private estates of local authorities. The green space, once incorporated into the public domain, benefited from enhanced protection — inalienability, imprescriptibility. But once genuine disuse had been established (that is, the asset was no longer actually being used for the collective purpose justifying its classification) and a formal declassification had taken place, unchallenged within the time limits for bringing proceedings, this asset passed into the local authority's private estate. Now, the private estate is governed by the ordinary rules of property: the local authority may sell it like any other owner, without the co-allottees — third parties in relation to this local authority asset — being able to invoke a contractual purpose that does not bind the authority.

Is this a break with prior case law? Not really: the highest court confirms and clarifies a line already sketched out on the interplay between town planning law, public property law and subdivision contract law. The co-allottees, for their part, argued the opposite: for them, the purpose fixed by the deed of covenant should survive the transfer and be binding on the local authority as an easement attached to the asset. The Court ruled to the contrary, giving primacy to the rules of the public domain and to the declassification procedure, since no challenge had been brought against it.

What this changes for you — in practical terms

If you own a plot in a subdivision scheme whose common areas have been transferred back to the local authority, you need to take on board one essential point: your deed of covenant no longer protects these areas once they have become local authority property. You will not be able to invoke this document to prevent the local authority from declassifying, and then selling, a green space or a road that you thought was nevertheless guaranteed by the subdivision scheme's rules.

In practical terms, if a council — in Paris as elsewhere — initiates a procedure to declassify a local authority area originating from a former subdivision scheme, this is precisely the moment to act, not after the sale. A challenge against the declassification decision, within the time limits for contentious proceedings (generally two months from publication of the decision), is the only genuinely effective window for action. Once this time limit has expired without challenge, the asset becomes transferable and the subsequent sale becomes virtually unassailable on this ground.

For a purchaser of a local authority asset originating from a former subdivision scheme — say, a 500 m² plot sold for €180,000 in a municipality in the Paris region — vigilance should focus on the history of the asset: was it properly declassified? Was this declassification challenged? These checks, often overlooked, secure the acquisition far better than a simple reading of the neighbouring subdivision scheme's deed of covenant.

Four tips to avoid this type of dispute

• Monitor declassification decisions published by your local council: regularly check the register of council resolutions concerning the assets of your subdivision scheme.
• Act within two months: any challenge against a declassification must be brought within the time limit for contentious proceedings, failing which the decision becomes final and unassailable.
• Have the property history checked before any purchase: ask the notary to trace the classification/declassification history of the asset if it originates from a former subdivision scheme transferred back to a local authority.
• Do not rely on the deed of covenant to block a local authority: this document organises relations between co-allottees, not relations with the local authority that has become the owner.
• Plan for a reservation clause in the transfer deed: if you are creating or managing a subdivision scheme, negotiate with the local authority an enforceable purpose clause, rather than relying solely on the deed of covenant.

Further detail: related case law and developments

This decision forms part of a consistent line of case law on the status of assets transferred back to local authorities under subdivision schemes, in which the courts have already had occasion to recall that Article L. 442-9 of the Town Planning Code, relating to the ten-year lapse of the subdivision scheme's planning rules, does not automatically affect the local authority's ownership of the facilities transferred back. Similarly, Articles R. 442-7 and R. 442-8 of the Town Planning Code, which govern the management of common facilities, confirm that this management falls under its own regime, distinct from the contract law binding co-allottees to one another.

The trend is clear: the higher courts are increasingly distinguishing the fate of facilities transferred back — governed by public property law — from that of privately owned plots, which remain strictly subject to the deed of covenant. Looking ahead, this means that co-allottees must abandon the idea that the deed of covenant can "follow" an asset all the way into local authority ownership: vigilance must now focus on the administrative decisions classifying and declassifying assets, far more than on the original contract.

Key takeaways

• Does a local authority become a co-allottee by receiving the common areas of a subdivision scheme? No, according to this decision: it remains a third party to the deed of covenant, which is not enforceable against it.
• Can the deed of covenant prevent the local authority from selling a green space? No, if this asset has been properly declassified from the public domain and transferred to the local authority's private estate.
• When is the right time to challenge a declassification? Within the time limit for contentious proceedings, generally two months after publication of the decision — after that, challenging it becomes very difficult.
• Can a co-allottee act after the local authority has sold the asset? The decision shows that a challenge to the sale, based on the deed of covenant, fails if the prior declassification was not challenged in time.
• What should a purchaser of a local authority asset originating from a subdivision scheme check? The classification/declassification history of the asset, and the absence of any pending challenge against that decision.

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