CNCI compensation increased by over 60% by challenging the property valuation

In a dispute concerning the compensation awarded for a property unlawfully taken by the State, we challenged the decision by which the National Commission for Real Estate Compensation (CNCI) had set the award at 462,840 points.

Following the action we filed, the Tribunal partially annulled the compensation decision and ordered the CNCI to issue a new decision for 748,771 points.

The compensation established by the court is higher by 285,931 points — an increase of approximately 61.8% over the initial valuation.

The issue: an inadequate valuation of the expropriated property

The compensation file concerned a demolished residential building comprising seven apartments and the related land, with a surface area of over 400 sqm.

Under the contested decision, the CNCI had awarded 462,840 points. In our view, that value did not correctly reflect the technical characteristics of the property or the values set out in the public notaries' price guide applicable to the valuation.

Under Law no. 165/2013, the valuation of properties that can no longer be restituted in kind is expressed in points and is carried out by reference to the relevant notarial price guide, taking into account the technical characteristics and the situation of the property at the date it was taken. Under the law, one compensation point has a nominal value of one leu.

The legal strategy

We challenged the number of points awarded and requested a separate assessment of the value of the seven apartments and of the related land.

The analysis covered:

• the description and surface area of each apartment;
• the technical characteristics of the building;
• the surface area of the expropriated land;
• the corresponding values in the public notaries' price guide;
• the calculation method used by the CNCI;
• the difference between the value awarded and the lawful value of the property.

The Tribunal's ruling

The Tribunal upheld the action brought against the CNCI and ordered:

• the annulment of the contested decision as regards the 462,840 points awarded;
• compensation to be set at 748,771 points;
• the CNCI to issue a new compensation decision;
• the use of the values in the public notaries' price guide applicable to the relevant year;
• the new decision to be issued within 30 days of the judgment becoming final.

The first-instance outcome

The case shows that a compensation decision issued by the CNCI should not be accepted automatically where the valuation does not correctly reflect the expropriated property or the applicable notarial price guide.

Reviewing the documents, the surface areas and the calculation method can lead to a substantial difference between the compensation granted administratively and the one established by the court.