This article starts from an administrative practice, currently as widespread as it is illegal, namely the affecting of lands through urban planning with public utility servitudes, followed by the coercion of landowners to gratuitously cede their property rights over these lands to local administrative units.
It is no longer a novelty, at least in the municipality of Cluj-Napoca, that through a newly invented legal mechanism, which resembles the nationalization procedure of other times, the authorities have managed to find a way to deprive private individuals of their property not only without fair and prior compensation but without any compensation at all, as everything happens under the guise of so-called animus donandi. Landowners “decide” to make a gift to the administration by gratuitously ceding pieces of their lands.
The benefits for the administration are indisputable, as by achieving the same result of using private property for public purposes, they avoid the lengthy bureaucratic procedure of expropriation, fair and prior compensation, and as long as there is no expropriation decision and one concerning compensation, there can be no question of challenging them in court.
However, the authorities’ innovation is undoubtedly abusive and cannot be legally protected. The procedure described above is clearly illicit, meant to bypass the application of expropriation law provisions. Conditioning the issuance of the building permit, the minutes of acceptance, or any other document on the donation of the land entirely abolishes the animus donandi element of the latter act, rendering it susceptible to annulment.
Context and Description of the Illegal Practice
First Ground – Illicit Cause
- In this regard, the first and most favorable ground, in terms of legal regime, for the annulment of the donation is the illicit cause.
It is worth noting that according to the Civil Code, the sanction applied in this case is absolute nullity (art. 1236 and art. 1238 of the Civil Code), meaning that the action is imprescriptible (art. 2502, paragraph 2, point 2 of the Civil Code). Therefore, regardless of whether the individual made such a forced donation 9 years ago (when the new Urban General Plan of Cluj-Napoca was approved), the donation can still be the subject of a lawsuit for the annulment of the deed. Furthermore, the ground of the illicit cause has already been confirmed by the courts as the basis for the annulment of these so-called donations.
Confirmation of the illicit cause in the case law of the courts.
In this regard, in the case law of the Cluj courts (a case law recently confirmed by the High Court of Cassation and Justice), it has been held that:
“From the chronology presented above, it results that at the conclusion of the gratuitous legal act, by which the plaintiffs transferred the ownership right in favor of the Municipality of Cluj-Napoca, the intent to defraud the law was known and pursued both by the plaintiffs (who wanted to obtain the building permit) and by the defendant, the Municipality of Cluj-Napoca, the beneficiary of this act, thus the illicit cause was a shared one. By transferring the ownership right without compensation to the Municipality of Cluj-Napoca (the statement of renouncement of the right, followed by the takeover of the land into the public/private domain of the municipality), both parties to the legal relationship thus formed sought to evade the legal provisions regulating the expropriation procedure for public utility.”
“The manner in which, exercising its prerogatives to urbanize F. street, the public authority established the only means of obtaining the building permit as the gratuitous transfer of the land owned by the defendants, affected by the easement, represents a violation of the right of property in its essence. The court finds that the public authority cannot initiate the urbanization procedure of an area by adopting urban planning documents, by establishing public utility easements, without starting the expropriation procedure, but by conditioning the issuance of building permits on the gratuitous transfer of the land affected by the easements. Such an urbanistic procedure flagrantly violates the private property right of the landowners affected by the easements, equating to a de facto expropriation. (…)
In agreement with the first instance, the court establishes that the declaration of renunciation of the ownership right represents a legal act affected by an illicit cause under art. 1236 para. 2 of the Civil Code, as it is a coercion on the part of the authority for the gratuitous transfer of private land affected by the easement in the absence of just compensation, without initiating the expropriation procedure for public utility, by affecting the substance of the property right. (…) Consequently, finding the situation of a de facto expropriation due to the lack of any just and prior compensation for the land transferred by the defendants to the Municipality of Cluj-Napoca, the defendants were consistently and reasonably obliged to pay the plaintiffs the compensation due for the dispossession, through de facto expropriation, of their property.”
The second ground – Lack of cause
In the alternative, another legal ground for the annulment of the donation, also related to the cause of the legal act, is the lack of cause. The donation contract was never justified by animus donandi (the intention to donate) or the intention to gratify, but from the outset, the motive was the donor’s submission to the coercive power of the authorities, which conditioned the issuance of a necessary act for the owner on the completion of the donation.
The sanction that applies based on this ground is relative nullity (art. 1238 Civil Code), so, unlike the illicit cause, in this case, the action is subject to a statute of limitations of 3 years.
Confirmation of the lack of cause by the courts
It should be noted, however, that the validity of this legal ground has also been confirmed by the courts.
“In gratuitous acts, the cause of the act consists in the intention to gratify – animus donandi. The existence of a gratuitous contract is determined by the impulsive cause of the donor, which consists precisely in their intention to provide a benefit to someone else, without seeking anything in return from a legal perspective.
However, in the circumstances where the plaintiff made the donation offer for the property in question in order to obtain a favorable opinion in return, it cannot be said that the intention was to increase the state’s patrimony with the respective asset, without expecting something in return. As a result, the donation contract lacks the very cause, which is an element of validity as provided by Article 948, paragraph 4 of the Civil Code.
Regarding the applicable sanction, in the case of a lack of cause, this is the absolute nullity of the legal act, as Article 966 of the Civil Code stipulates: a contract without cause (…) cannot have any effect. Consequently, based on the aforementioned legal provisions, the court will admit the action as it was formulated and clarified.
Third Ground – Vitiation of Consent
Finally, another legal ground that could form the basis for the annulment of the donation is related to the vitiation of consent. It is evident that consent expressed under duress, such as the threat of refusing to issue a necessary act for the property owner (whether it is a building permit, a final acceptance report, or another act), cannot be considered or qualified as freely expressed consent.
By definition, the freedom of a person’s consent involves self-determination. However, in the case of psychological pressure, resulting from taking advantage of a person’s state of need or from blackmail, self-determination cannot be said to exist. The donation contract is not an act of freely expressed will; it is the result of coercion by local authorities that “unfairly and abusively take advantage of the lack of alternatives faced by the affected party due to the circumstances that forced them to contract.” “If one of the parties to the legal act takes advantage of the state of necessity in which the other party finds themselves, the legal act in question is susceptible to annulment according to the rules regarding violence.”
The sanction that applies in this case is, again, relative nullity, and, as in the previous case, it is subject to prescription within the general term of 3 years.
Regardless of the type of nullity that applies, whether absolute or relative, the ultimate reason for the annulment of the donation remains related to the restitution of the benefits or the corresponding compensation, and in this regard, the discussion becomes particularly interesting.
Confirmation of Vitiation of Consent by the Courts
This is because, according to the Civil Code, in the case of the nullity of the donation contract, “the value of the prestations is assessed at the time when the debtor received what must be restituted” (art. 1639 Civil Code, in conjunction with art. 1254 Civil Code). In other words, the donating owner should be refunded the market value of the donated land, calculated at the time the donation was made, which is of course not necessarily financially advantageous, especially if we are talking about a donation made in 2014 and annulled in 2023.
What is the “donation” mechanism?
Furthermore, the authorities have invented and applied this “donation” mechanism to avoid the legal and constitutional procedure of expropriation, a process that involves fair and prior compensation based (including) on “the price at which properties of the same type are usually sold within the administrative-territorial unit, at the date of the preparation of the expert report” (Art. 26 of Law 33/1994). However, as long as the authorities have diverted a legal institution from its intended role, using it abusively and unjustly, their conduct must be sanctioned, not treated with a more favorable legal regime.
As long as the invented procedure is nothing more than an obvious de facto expropriation, a simulated expropriation by the authorities for an unjust purpose, it must undoubtedly be subjected to the legal regime it seeks to bypass, namely the expropriation regime. It would be at least unjust, if not unconstitutional, for the property owner to be in a worse position when the authorities commit an abuse—simulated de facto expropriation with the goal of avoiding compensation—than when the authorities follow the legal and constitutional expropriation procedure, paying compensation calculated according to Law 33/1994.
How is the calculation of fair and prior compensation made?
To clarify the calculation of fair and prior compensation, regulated by the Expropriation Law no. 33/1994, we quote the provisions of Art. 26 of this legal act:
- (1) The compensation consists of the real value of the property and the damage caused to the owner or other entitled persons.
- (2) In calculating the amount of compensation, the experts, as well as the court, will take into account the price at which properties of the same kind are usually sold within the administrative-territorial unit, at the date of preparing the expert report, as well as the damage caused to the owner or, where applicable, to other entitled persons, considering also the evidence presented by them.
Confirmation of this procedure by national case law
In consideration of these aspects and in the spirit of equity, national case law has acknowledged and confirmed the calculation of compensation owed in such situations, according to the provisions of the Expropriation Law no. 33/1994, namely by taking into account (also) the price at the date of the preparation of the expert report. Even the competence to resolve such actions was granted to the “court where the expropriated property is located,” as provided by Art. 21 of Law no. 33/1994.
In this sense, we refer to Decision no. 195/2022 of the Cluj Court of Appeal, with the mention that recently, the legality of this ruling was confirmed by the High Court of Cassation and Justice:
“Consistent with the first instance, the Court establishes that the declaration of renunciation of the property right represents a legal act affected by illicit cause under Article 1236 (2) of the Civil Code, as it involves coercion from the authorities to transfer ownership of a private property affected by the easement, without fair compensation, and without the initiation of the expropriation procedure for public utility, by affecting the substance of the property right. (…) Consequently, considering the situation of a de facto expropriation due to the lack of any fair and prior compensation for the land that the respondents ceded to the Municipality of Cluj-Napoca, the defendants were consistently and judiciously ordered to pay the plaintiffs the due compensation for the deprivation, through de facto expropriation, of their property.”
Thus, to conclude, the so-called “donations” of land affected by public utility easements can be annulled, regardless of when they were made, and the action can, in this regard, even be imprescriptible.
The legal consequence is that compensation can be obtained taking into account the “price at which properties of the same kind are usually sold within the administrative-territorial unit, at the date of the expert report, as well as the damages caused to the owner or, as applicable, other entitled persons, considering the evidence presented by them.”
