From planning damage to loss compensation
With the Environment Act , Title 4.5 of the Awb will enter into force simultaneously. With the addition of Title 4.5, the Awb contains a generic regulation for loss compensation. For environmental law, Chapter 15 of the Environment Act contains, in addition to the regulation in the Awb, a specific regulation for loss compensation for spatial decisions.
Under Chapter 15, compensation in the form of loss compensation can be paid if the loss is the result of a lawful government decision. Article 15.1 of the Environment Act lists (exhaustively) which lawful spatial decisions can potentially lead to damage. We have a similar system in the Wro.
So much for the similarities between the current and the new system. As mentioned, the Environment Act also brings the necessary changes. Below are the biggest areas of concern.
Larger list of damage causes
Like the Wro, the Environment Act contains an (exhaustive) list of causes of damage. Damage causes that we are familiar with under the current system are, for example, provisions from a zoning plan, an environmental permit to deviate from a zoning plan, or a provision from a provincial ordinance.
With Article 15.1 of the Environment Act , the list of possible causes of damage is quite extensive. For example, environmental permits for inner-plan and outer-plan environmental plan activities, permits for altering a monument, permits for an environmentally harmful activity, permits for demolishing a structure in a protected town or village view, and custom-built regulations, will soon all be able to cause damage that is eligible for compensation.
In short, be wary that more and more spatial decisions could trigger a potential claim for loss compensation .
Shifting damage moment
Under the current Wro, the planning decision that creates building and use possibilities , such as the zoning plan, is the damaging decision.
In the regulation of loss compensation under the Environment Act, for activities subject to a permit requirement, a request for loss compensation can only be made when that permit is actually granted. For activities that do not require a permit, the damage occurs at the moment a notification is made or the activity is actually started.
In many cases, therefore, the moment when the claim for compensation for damages arises shifts from the moment of plan adoption to the moment when a development actually takes shape. The idea here is that theoretical damage that may not occur at all should no longer qualify for compensation. The adopted environmental plan often does cast a shadow ahead. The resulting damage is also known as shadow damage.
From maximum planning possibilities to actual situation
Shifting the moment at which the damage arises also means that the assessment of damage can be based much more on what is 'actually' being realized, instead of looking at the maximum that can be realized from a planning perspective . So the fact that a skyscraper 100 meters high could be built under the old zoning plan no longer matters under the Environment Act if that skyscraper was not actually there.
Under the Environment Act, when assessing damage, the actual situation immediately before and immediately after the damage occurs is compared, for example, immediately before and after a permit is granted. This means that (by way of example) it is not wise to demolish an existing building before a permit for the construction of a new building has been granted. This is because the actual situation at the time the permit is granted is then a vacant lot without any buildings compared to the new building to be constructed. The damage in that case is a lot greater than if there was also a residential building in the "old" situation.
From minimum lump sum to fixed lump sum
Damage that does not exceed the normal social risk remains at one's own risk even under the Environment Act. The Environment Act does change the level of that social risk.
The Wro stipulates that for indirect damage and income damage there is a normal social risk of at least 2%. It is generally accepted in case law that the normal social risk is often much higher, at 5% for infill locations, for example.
Currently, there is much litigation over the amount of the percentage to be applied. This is expected to be a thing of the past under the Environment Act. Indeed, under the Environment Act, a fixed flat rate of 4% will apply. For all spatial decisions eligible for compensation and involving indirect damage, a normal social risk of 4% will be applied.
Income damages and direct damages are not subject to a fixed lump sum.
Phased permits
The Environment Act offers developers the choice of applying for permits separately or in phases. The granting of each of those permits separately constitutes a cause of damage within the meaning of Article 15.1 of the Environment Act. A request for compensation may also be made separately with respect to each of those permits. In that case, each of those requests is again subject to the 4% limit that remains for one's own account.
The legislature also recognized the above problem and included two goat trails in the law.
- An aggrieved person may "save" all separate applications and bundle them into one application; or
- The authority may choose to apply the 4% flat rate only once.
Note that option two is a power of the competent authority, but not an obligation. The competent authority may also choose to re-establish the 4% normal social risk threshold for each separate request for loss compensation.
Tips for developers
The legislature is choosing to overhaul the system of planning damages . We have listed the most important changes above. Knowledge of these changes helps in making well-considered choices in light of possible compensation due. Certainly the decision about when to demolish can have major consequences.
Incidentally, planning (draft) decisions that were applied for or made available for inspection before the Environment Act entered into force will still be subject to current planning damage law for at least 5 years.
