Cyprus Mail

Compensation for town planning

ANY restriction on a piece of land due to town planning results in the deprivation of the property and loss to the owner, who is entitled to reasonable and just compensation. Such a restriction may be imposed by law, purporting public interest, and is therefore legal. However, it does not justify the appropriate authority to refuse the payment of reasonable compensation to the owner with the excuse that the compulsorily acquired land, wholly or partly, constitutes part of the town planning and thus it has zero value.

The issue is examined through provisions of the constitution, which protects the right of every person to acquire, dispose of and enjoy movable and/
or immovable property. Accomplishment of a purpose leading to public benefi t, such as the widening of a public road, through compulsory acquisition is a permissible and acceptable restriction, but the administration is obliged to pay just and reasonable compensation for the deprivation of the property of the citizen affected. The obligation for the payment of compensation due to town planning is directly regulated by the Streets and Buildings Law, which also establishes the obligation of the owner to give part of his land affected by the town planning through the issue of a building permit.

The contribution of a citizen to the public at large cannot be without consideration. The legal principles regarding the payment of compensation to the owner of the piece of land were examined by the District Court of Nicosia in a relevant judgment. The applicant claimed compensation for compulsory acquisition of part of his land and the Republic alleged that he was only entitled to nominal damages of €85.43 because the compulsorily acquired part of the land was affected by a term of previous town planning and building permits which were not appealed before the Supreme Court.

The District Court rejected the suggestion of the Republic, stating that the gist in such cases is the protection of the human right of ownership protected by the constitution. It allows the restriction of this right for the accomplishment of purposes for public benefit, but it presupposes the payment of reasonable and just compensation. The claim of an owner for the payment of compensation is not affected and is not prevented by the fact that he did not question the town planning imposed on compulsorily acquired land or that he gave his consent for the execution of the works. As long as the State through an order of compulsory acquisition acquires possession of a piece of land, the value of the land is reduced and therefore
the owner must be compensated.

The compensation is assessed by the general principles laid down in the relevant and case law. The Nicosia District Court decided the compulsory acquisition caused essential reduction of the value of the land affected and despite the fact that part of it was given by the owner for the widening of the road under the terms of the relevant permits issued by the appropriate authorities, compensation was still payable according to
the constitution.

Therefore, the court issued a judgment in his favour for the sum of €761,400 plus interest at the rate of 9% as from the date of the acquisition until payment plus legal and valuation fees and costs. It added that the provision for the payment of interest until the payment of the compensation
constitutes a reasonable and fair measure for restoring the value of the money which an owner would have received if the amount was paid at the date the land was compulsory acquired. 

George Coucounis is a lawyer specialising in the Immovable Property Law, based in Larnaca, Tel: 24 818288, [email protected],

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