Construction fees, the scope of the fee penalty and "a fixed, modest percentage"

For large construction projects, the construction fees to be paid are by no means a pittance. The legal fee sanction, which for too old zoning plans means that municipalities no longer have the authority to collect fees for services provided that are related to the zoning plan, has therefore received a lot of attention in practice and also in case law. There is also much ambiguity about what is still considered a reasonable level of fees. Fees are regularly set based on a percentage of the construction sum, and these percentages often vary widely. Large projects sometimes require several million euros in fees.

Legessanction

The Spatial Planning Act requires municipalities to adopt a zoning plan for the land within their municipality every ten years. If they fail to do so (in a timely manner), the authority to collect fees for services provided after that time by or on behalf of the municipality in connection with the zoning plan lapses. This somewhat cryptic description means that in that case, fees may no longer be collected for the processing of an application for an environmental permit related to the zoning plan. This is particularly important for the environmental permit for the activity of building. The interpretation of this sanction, in particular what is to be understood by "relating to the zoning plan," is rather unclear.

A number of municipalities take the position that the assessment of an application for an environmental permit (building activity) involves more than just a test against the zoning plan, and that costs may be charged for these other activities. After all, an application for an environmental permit (building activity) is not only tested against the zoning plan, but also against the Buildings Decree 2012, the current building regulations and, in many cases, also against building standards. Therefore, many fee regulations include a 'discount' if it concerns a building application within an obsolete planning area. This discount amounts to not charging 10% or 25% of the fees that would normally have to be paid, which should correspond to the time saved by not having to check against the zoning plan. According to those municipalities, this is a reasonable application of the fee penalty.

Jurisprudence, however, indicates otherwise. Very recently, the Gelderland District Court also concluded that in the case of a fee sanction, no fees at all may be charged for the environmental permit:

"It appears from the cited Second Memorandum of Amendment that the fee sanction refers to fees with respect to permits for construction, construction or demolition activities. In the court's opinion, all the fees charged relate directly to the requested environmental permit for the remodeling of plaintiff's home. It is true that the defendant breaks down the total amount of fees into different categories, but in fact these fees relate to one and the same permit application."

This ruling is clear, the fee penalty affects the entire construction project. According to the first instance judgments, a large number of municipalities apply the legal fees sanction incorrectly. It is to be expected that the courts and the Supreme Court will also comment on this issue. If you receive a dues bill in an area subject to a dues penalty, make a deposit. If you fail to do so, the fee levy will in principle become irrevocable.

Fees as a percentage of construction cost

Municipalities have policy freedom when it comes to determining how the amount of fees is calculated. Fees are often calculated based on a certain percentage of the construction sum, which can lead to huge amounts in large construction projects. In principle, this is allowed, but there are limits.

The Supreme Court previously ruled that using a fixed, modest percentage of construction costs cannot be considered arbitrary or unreasonable. A percentage of 2.25% was not considered unreasonable. The Arnhem-Leeuwarden Court of Appeal also found a percentage of 2.9% to be a not unreasonable fixed, modest percentage.

But there are limits. For example, the Rotterdam District Court recently ruled that a fee levy worth (rounded) 7.30% of the construction costs can no longer be considered a "modest percentage" and results in an unreasonable fee levy.

While there have already been several rulings on the reasonableness of a "modest" percentage of the construction sum to determine construction fees, it is not yet clear exactly where the line between the reasonable and unreasonable percentage lies. This too will undoubtedly be continued....

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