Plan damage: the (no longer) gray area between 2% or 5% normal social risk

Some time ago now, I wrote an article on the question of when it is reasonable to allow a normal social risk of 5% of the damage suffered to be borne by an applicant when applying for planning damages. After all, the law sets a limit of 2% for this.

On Nov. 3, 2021, the Division issued an interesting ruling specifically addressing the (so far) "gray area" between these two percentages.

Normal social risk

The Spatial Planning Act stipulates that damages falling within the normal social risk shall be borne by an applicant. Specifically, it stipulates that in the case of indirect plan damage, 2% of the damage suffered, such as a decrease in value or loss of income due to an adverse nearby development, shall be borne by an applicant.

It follows from now established case law, see my earlier article in more detail on this subject, that if there is (I) a normal social development, which (II) was in line with expectations, in principle a 5% decrease in the value of an immovable property belongs to the normal social risk of an applicant.

Raising normal social risk: tougher requirements for justification

Nevertheless, the starting point remains the statutory minimum flat rate of 2%. The more an administrative body uses a higher percentage as the normal social risk threshold or deducts from an allowance, the more stringent the requirements for justification become.

The gray area between 2% and 5% normal social risk

In practice, there are regular (legal) discussions about whether an increase in the normal social risk is reasonable. Often these discussions concern situations when it is not entirely clear whether a development is a 'normal social development' or when municipal policy has not always been straightforward, raising the question of whether a development was in line with 'normal expectations'.

In the ruling of Nov. 3, 2021, the Division, considering the need in legal practice, provides a number of guidelines for determining in which cases an increase in normal social risk can be decided.

Handles for raising threshold

The Division provides the following guidance to legal practitioners for deciding on the appropriate level of social normal risk:

1. If a development fits within the spatial structure of the environment and the spatial policy pursued for a number of years, a threshold of 5% may be used as a normal social risk.
2. If either indicator is only partially met, a 4% threshold is appropriate in principle.
3. If one of the two indicators is not met at all, or if both indicators are partially met, the use of a 3% threshold is, in principle, appropriate.
4. If only one of the two indicators is met in part, or if both indicators are not met at all, the use of a 2% minimum lump sum threshold is in principle appropriate.

Conclusion

With this ruling, the Division has given the practice of planning compensation some clear guidelines. A realistic expectation seems to be that these guidelines will lead to an increase of the legal minimum of 2% as the normal social risk. For developers, this is obviously positive.