Issue link: https://maltatoday.uberflip.com/i/1372546
14 maltatoday | SUNDAY • 16 MAY 2021 NEWS Changing planning rules: will government have to compensate owners to stop uglification? Will developers have a right to 'compensation' if planning rules are changed to put a halt to the country's uglification? James Debono asks two leading experts and uncovers a case thrown out by the European Court of Justice involving a company claiming a breach of property rights after its property was scheduled SPEAKING on TVM's Xtra, Environment Minister Aaron Farrugia warned that reversing 'building rights' acquired during the past two decades as a result of various policy changes, could result in hefty compensation claims against the Maltese State: "Shall we compensate these fam- ilies with billions of euros to re- scind the rights they acquired? Shall we take back those rights? This is why we need to sit down and have a mature discussion that goes beyond complaints of uglification and urban sprawl," Farrugia claimed. The minister has so far failed to answer MaltaToday's question on who had provided him this legal advice and what it was. So this newspaper caught up with two experts for their opinion. Government should not abscond Dr John Ebejer, an academic and veteran urban planner, re- calls that when back in 1989 the Temporary Provisions Scheme were prepared, there were many plots of land entitled to a devel- opment permit according to pre- vious legislation, but which were left out of the new development boundaries. "Subsequently some of them were included in the de- velopment boundary revisions of 2006, but some others were left out… As far as I am aware, none of those owners sought compen- sation for loss of value." From a legal perspective, Ebejer acknowledges that there may be different interpretations. "I have no doubt in my mind, however, that different lawyers would give different advice on the matter of compensation. Ultimately, what matters is what a court of law would eventually decide, if and when there is a claim for com- pensation. The minister and the Planning Authority cannot, and must not, constrain the planning system because of the 'risk' of what may happen." But Ebejer cites a number of reasons why he believes a court of law would throw out a claim for compensation because of 'de- creased value'. One reason is that the PA often changes regulations in a way that benefits property owners. For example, the Planning Authority sometimes endorses requests to change a villa area's scheme in- to a four- or five-storey terraced development. This naturally in- creases the land's value because of the extra residential units that can be developed. But though there might be a case for the au- thorities to seek to recoup some of the increased value, the idea is so absurd and nobody would recommend this. "By the same token, it would be wrong for a property owner to be compen- sated for alleged losses resulting from a planning decision by the PA." The second reason stems from the planning law itself, which provides for the payment of compensation if and when the PA revokes a valid development permit. This is the only instance that compensation is payable. "Changing planning rules that affect property value is a dif- ferent situation and there is no provision in the legislation that contemplates the payment of compensation in such a situa- tion." But the third and most impor- tant reason is that the payment of compensation for reduced property value would effectively render the planning process re- dundant as a planning tool. "Unless there is an overwhelm- ing reason to do so, the courts would be very reluctant to open a Pandora's box. Would the owner of a house that has been sched- uled, be entitled to compensa- tion because of the decreased market value of the house? Is the owner of solar panels entitled to compensation from the PA when his property is now over- shadowed by a higher building?" A similar question arises when- ever properties whose open views are blocked by a PA-per- mitted development. Would these too be entitled for compen- sation? "Where do you draw the line? If a court decides in favour of compensation for lost value, it will render the PA unwilling to take any planning decision about anything. It would be as good as undoing substantial parts of the planning legislation and render- ing them meaningless." Ebejer reminds Farrugia of his responsibilities according to the Planning Act: "to enhance the quality of life for the benefit of the present and future genera- tions". He warns that it would be a mistake to abdicate from such a responsibility because of legal advice that "may or may not be correct". "I'd advise him to be wary about taking advice from people with vested interests and to seek the advice of urban planners and not just lawyers and architects. "The Maltese planning system is in a sorry mess because suc- cessive planning ministers took advice from people who are apt at using flowery legalistic jargon but who know nothing on how a proper modern-day planning system should operate." Matter still hotly debated – Stafrace Ian Stafrace, a leading planning lawyer and former CEO of the Planning Authority, is more nu- anced in his views, acknowledg- ing that the matter is still "hotly debated by authors and academ- ics" and has also been debated before the local courts. "Minister Farrugia is known to be someone who does con- "The minister and the Planning Authority cannot, and must not, constrain the planning system because of the 'risk' of what may happen." "Shall we compensate these families with billions of euros to rescind the rights they acquired?"... is Aaron Farrugia right? ROWAN HEUVEL/UNSPLASH "Expecting the law not to change in the future is not considered a legitimate expectation under EU law... this principle has consistently adopted when by claims for compensation changes in legislation"