Eminent domain refers to the power of a government body to acquire land or rights for public use. When this happens, it is called expropriation or condemnation, and in the Netherlands it can take a variety of forms: a compulsory purchase, a right of first refusal or an easement order. The parties involved are government authorities, companies and members of the public.
Expropriation of land for development: legal considerations, public interests and individual interests
Sometimes an authority needs to acquire land, for example to develop housing, infrastructure, a business estate or a natural area. This is a delicate process, and the authority has to scrutinise every legal possibility, including voluntary sale, expropriation, demanding rights of first refusal and imposing easement orders.
For companies and members of the public, it is important to consider where they stand, what the potential loss or damage is, and what compensation they should demand. The goal is to balance the interests of everyone involved.
Expropriation: from compulsory purchase order to compensation
Expropriation is also called condemnation. This is a process that can be initiated by various government authorities, including municipalities, provinces, local waterboards and the Dutch State. It can even be initiated by legal entities such as the national rail operator. However, compulsory purchase of property is permitted only in urgent and unavoidable situations, and the order must have a legal basis such as a zoning plan or a development decision.
The process begins with a compulsory purchase order, which needs to be presented to a court for confirmation. Before the court confirms the order, it will review whether the project is so urgent that it justifies expropriation.
Separate civil proceedings then follow to establish how much compensation the owner should receive. The court determines how much the property is worth, and what secondary loss or damage the owner suffers. The proceedings end when the compensation has been established and paid and the deed of expropriation has been entered into the public registers.
Right of first refusal
Local zoning plans change, and sometimes a particular location is designated for a different use. If this happens, the authorities could establish a right of first refusal. The owner is not obliged to sell the property, but if they do, they must offer it for sale to the government authority first before trying to sell it elsewhere. If the parties cannot agree on the price, the court decides.
In the Netherlands, authorities use the right of first refusal to prepare the way for the acquisition process, even before the planning decisions have been finalised. However, a right of first refusal can also benefit the owner of the land: they are guaranteed a buyer, for a price that is not usually lower than on the open market.
These arrangements can be complicated to agree on. To achieve the best possible outcome for everyone involved, it is important to properly understand what rights of first refusal are and how they work.
Easement order: permitting works on your land
Sometimes a local authority needs to access land, for example to lay underground pipes or cables or to create a watercourse. In these cases, they might impose an easement order: the owner is obliged to tolerate those works on their land, without actually giving up ownership.
Easement orders are subject to strict requirements, and the owner’s interests need to be given careful consideration. These are complicated situations, and the best way to protect the land owner’s rights and interests and calculate how they should be compensated is by obtaining expert legal advice.
Contact our experts
