12.03.2025

Surrendering expropriated property: between the necessity of the measure and the infringement of private property rights

On 4 March 2025, a recent decision of the Constitutional Court of Romania ("CCR/Courtea")[1] was published in the Official Gazette on a series of provisions contained in Law no. 255/2010 on expropriation for reasons of public utility, provisions which concern the transfer of ownership of real estate to the persons who owned it, following the expropriator's relinquishment of the property, in the conditions that it is no longer necessary for the public utility projects envisaged.

The objection was raised by the Ombudsman himself and concerned the provisions of Art. 11 para. (6¹), (6³) and paras. (6⁸) - (6¹⁰) of Law No 255/2010, provisions introduced by Law No 144/2019. These provisions regulated a mechanism for the restitution of expropriated immovable property to the former owner in the event that the public works no longer justified the expropriation. The transfer took place independently of the will of the expropriated persons, and took place by operation of law on the date of the expropriator's decision to return the property. Moreover, the sums deposited at the disposal and for the account of the expropriated persons were returned for this purpose, and the law expressly provided that the decision to return the property was enforceable, and that it was enforceable against both the expropriated persons and their successors.

In this context, the main issues challenged before the constitutional court were essentially those relating to:

• the return of the property ex officio, without the former owner's consent;
• lack of possibility for the expropriated person to be consulted or notified;
• Order the former owner to take back the property;
• Order the former owner to return the compensation received at the time of expropriation.

The People's Advocate, in the complaint submitted to the CCR, argued the unconstitutionality of the legal provisions indicated above, by reference to the violation of several principles enshrined in the Constitution, namely: the right of ownership and the inviolability of private property (Article 44 of the Constitution) and the principle of legality and legal certainty (Article 1 para. (5) of the Constitution).

The Court's analysis started with an examination of the general expropriation legislation, namely Law No 33/1994, which establishes the general framework for expropriations for reasons of public utility. Law No 33/1994 takes a completely different approach as a general rule in the matter, since it provides for a right of the former owners to have the expropriated property returned if it has not been used within one year for the purpose for which it was taken over and if there has been no new declaration of public utility. At the complete opposite pole, the 2019 amendments to Special Law No 255/2010 replaced the right to restitution with an obligation for the former owners to take back their property - a compulsory procedure, carried out by administrative act (restitution decision), without the consent of the expropriated persons, ex officio. The expropriator has thus established in his favour a purely discretionary right, which depends exclusively on his will, to the detriment of the former owners, who not only cannot take the initiative of the repossession, but cannot even refuse restitution, which is carried out directly on the basis of the administrative decision, without their consent.

According to the general law, one of the essential conditions for expropriation is the agreement of the parties, both as to the expropriation and as to the amount of compensation, failing which the decision is to be taken by court judgement. However, in the case analysed by the Court, there is no declared public utility and no agreement of the parties involved, the compulsory retrocession being tantamount to a sui generis expropriation.

On the basis of these premises, the constitutionality checks were aimed at both of the above-mentioned levels, on the one hand, compliance with the constitutional provisions contained in Art. 44 para. 1, first sentence, concerning the guarantee of the right to private property, and on the other hand, respect for the principle of legality enshrined in the provisions of Art. 1 para. (5) of the Constitution on the principle of legality.

With regard to respect for private property rights, it was emphasised that the issue to be clarified essentially concerns the infringement of the right of disposal over the sums of money received by way of compensation. The court considered that there is an imbalance between the interests of the expropriator and those of the expropriated natural or legal persons, in which case the proportionality test must be carried out in order to ascertain to what extent the State's interference constitutes a reasonable limitation of the right of ownership.

From this perspective, the Court established that:

-   the issuing of the decision of restitution and the withdrawal of the sums deposited/ repayment of the compensation - is appropriate in the light of the legitimate aim pursued by the legislature, but that

-   the measure is not necessary, because it could have been replaced by another solution that would have less affected the limits of the property right of the person concerned (as is the case, for example, under Law 33/1994, when the expropriated person is recognised a priority right of acquisition at a price that cannot exceed the discounted compensation).

At the same time, the "test" of minimal interference with the right of ownership was also carried out, the conclusion being that the contested legal regulation does not ensure a fair balance between the general interest and the individual interest, the former owner being faced, in reality, with a new expropriation, as he may be put in the difficult situation of having to return a sum of money that he no longer owns or may be obliged to manage a series of expenses related to the property that is returned to his patrimony.

As regards the principle of legal certainty, enshrined in Art. 1 para. (5) of the Constitution, the Court focussed on the component relating to the principle of legal certainty, highlighting the rigours of clarity, predictability and accessibility, as interpreted in the case law of the European Court of Human Rights . [2]

It has therefore been established that the obligation imposed on the expropriated person to repossess the immovable property and return the sums received by way of compensation infringes the principle of stability of legal relations, because it is liable to place him in a position of having to meet excessive demands, especially in circumstances where the sums received have already been realised. The hypothesis envisaged does not fulfil the constitutional or legal conditions for expropriation, brings insecurity into the civil circuit and confers only on the public entity the right to establish a civil legal relationship by its exclusive will/unilateral disposition. In this regard, the Court of Justice of the European Union has also referred to a wealth of case law[3] , which has recognised the need to respect the legitimate expectations of citizens, who are the addressees of a particular legal rule.

All these considerations were the basis for the unreserved admission of the objection of unconstitutionality, because the contested provisions violated both the right of ownership and the principle of legality, particularly from the perspective of the security of legal relations. By eliminating the mechanism of forced restitution of immovable property and the obligation to reimburse compensation, the Court's judgement contributes to the maintenance of a predictable and fair legal framework.

In concrete terms, as a result of this decision, the expropriator's relinquishment of certain immovable property originally affected by the public works could take place under the provisions of General Law No 33/1994, the provisions of which remain applicable, insofar as they do not contravene the special law. Thus, if the work for which the expropriation was made has not been carried out and the expropriator wishes to dispose of the property, the expropriated person is recognised as having a priority right of acquisition at a price which cannot be higher than the discounted compensation.

An article signed by Oana Zamă, Partner -ozama@stoica-asociatii.ro - STOICA & ASSOCIAȚII