How are use, planning and zoning restrictions on real estate regulated?

Real Estate (3rd edition)

Austria Small Flag Austria

Each of the nine Austrian states issues its own construction and zoning laws. The local communities issue zoning plans based on the regional laws. Any person can request a zoning confirmation for any parcel of land. Consequently, there is no uniform building and/or zoning law in Austria since all regions enact their own regulations in this regard.

The design, appearance and method of construction must comply with the building and zoning law applicable to the respective real estate. The building permit can only be granted, if the planned building project is in line with the provisions of the building and the zoning law.

The mayor (or the municipal authority in certain Austrian cities) acts as building authority, while the local council (or the town senate in certain Austrian cities or the Administrative Court in Vienna) acts as appellate instance.

Pursuant to the provisions of the building laws, the construction, modification or reconstruction of buildings requires a building permit. In the case of simple or small constructions, the building laws usually contain a provision that no formal building permit needs to be obtained. Instead, the builder has to file a notification of the planned construction works and is allowed to begin these works unless the Building Authority issues a prohibition decision within a certain period of time. Finally, the building laws contain provisions for minor constructions not requiring any consent from the Building Authority.

Under Austrian Law there are no terms and regulations for specific development agreements with the competent public authority, but it is possible to conclude such an agreement.

Brazil Small Flag Brazil

Each municipality has its own Master Plan and each building project, demolition or construction must be approved by the City Hall.

The zoning and planning regulations are issued at the municipal level. Some permits are issued at state or federal level.

Cayman Islands Small Flag Cayman Islands

16.1 The following provide control mechanisms in connection with the development of land:
(a) Development and Planning Law (2017 Revision).
(b) Development and Planning Regulations (2018 Revision), as amended by the Development and Planning (Amendment) Regulations, 2018.
(c) The Development Plan 1997.
(d) Building Code Regulations (Revised).
(e) National Conservation Law.

16.2 A Central Planning Authority for Grand Cayman and a Development Control Board for the Sister Islands (Cayman Brac and Little Cayman) review and consider applications to obtain planning permission and take enforcement action where necessary.

16.3 Planning permission is required for any development of land or change of use. Development of land includes:
(a) carrying out building, engineering or other operations in, on, over or under any land;
(b) materially changing the use of any land or the use of any building on the land; and
(c) subdividing land.

16.4 The following exclusions apply:
(a) Where renovations, alterations or improvement works are being carried out on the interior of a dwelling house and do not materially affect the external appearance of the dwelling house.
(b) Enlargements of a dwelling house within certain limits.
(c) Carrying out certain works by government personnel.

Cyprus Small Flag Cyprus

The use, planning and development restrictions that apply depend on the zone where the property is located. Cyprus is divided into zones, for example commercial, residential, touristic, agricultural, archeological, industrial etc. The Acts of parliament empower certain Authorities to issue regulations and guidelines in connection with such use, planning and development in each zone. The number of floors, the density factor, the coverage factor and other issues in connection with the design of the building to be erected, are determined for each zone.

Whenever a building is to be erected on immovable property or a modification is going to be made on an existing building on immovable property, the registered owner of such property submits an application to obtain planning permission. The application is accompanied by designs that show the construction to be made. After the planning permission is granted, the registered owner applies for the building permission. Once the building permission is granted construction works start.

The owner and the contractor appointed are obliged to follow the various conditions imposed in the building permit such as the provision of part of the land for the creation of green areas, the constructions of roads, pavements etc. Furthermore, conditions of departments like the electricity authority, the water supply department etc must be met. Upon completion of the construction, the supervising architect or engineer shall apply for the completion certificate. Not complying with the issued permits is a criminal offence. The court shall order the demolition of any illegal constructions.

Denmark Small Flag Denmark

The use of real estate can be regulated both publicly and privately by way of agreement. Under the Danish Planning Act (in Danish: planloven), all areas of Denmark are divided into either rural, urban or holiday-house zones. The planning system is decentralised as each municipality is responsible for the detailed local planning and permits for construction works.

It follows from the Danish Planning Act that the planning, use and development of land take place at four administrative levels, in which regulation laid out at a higher level must be complied with. The administrative levels are (starting with the highest level):

  1. National planning
  2. Regional development planning
  3. Municipality planning
  4. Local planning

Through local planning, the municipalities will regulate the use and the development of a limited part of the municipality, for example certain areas of the municipality or a single plot. Local plans are the only plans creating binding restrictions on investors and other landowners. In general, the provisions of local plans are quite detailed and will regulate the lawful use, size, design, preservation of current buildings, outdoor areas, constructions, roads and access ways etc.

Additionally, private restrictions may be imposed through easements, profits á prendre and restrictive covenants registered on the property with the Danish Land Registration Court.

France Small Flag France

The planning and zoning restrictions on a real estate property are usually set out in the local planning documents named plan locaux d'urbanisme applicable to the town and area where it is located and, as the case may be, in the local regulations and plans for the prevention of foreseeable risks and hazards, for the environment protection, preservation of heritage sites, etc.

Demolition, building, extension and renovation works and the division of a property into several plots of land with the view of erecting new buildings on these plots require the prior grant of specific permits and administrative consents. The town and other administrative authorities will review the applications for these permits and administrative consents for checking, in particular, whether they comply with the planning and zoning restrictions application to the property.

Germany Small Flag Germany

For almost every building project and major change of usage a permission is necessary, which has to be obtained from the local building authority. The competent authority has to review, if the planned project is in accordance with applicable regulations stemming from a patchwork of federal, state and local legislation.

The federal legislator has the competence to determine the general legal framework for zoning and planning restrictions, while the local municipalities issue the actual land use and detailed development plans.

Land use plan (Flächennutzungsplan): In the land use plan the municipality outlines the overall use of land within its territory. These plans contain little detail but set a broad framework and are thus not binding for the individual property owner, but rather a tool to steer the administration.

Development plan (Bebauungsplan): This plan is significantly more detailed and builds on the land use plan. The procedure to set up such a plan, including all political pre-discussion and the required public hearings, can easily take more than a year. When in effect, the development plan is legally binding for all affected land owners and therefore very relevant for a given development project within is scope. It usually covers a much smaller area than the land use plan and can even govern only one property and/or a specific project (in which case it is often accompanied by a public development contract between the municipality and the developer). The development plan specifies the allowed use for each plot of land and all ancillary areas (such as parks and traffic installations). The municipality can choose between approximately ten different types of areas from the federal Land Use Ordinance (Baunutzungsverordnung), ranging from pure residential and core city areas to industrial and mixed uses areas. Furthermore, the development plan determines the maximum dimensions of buildings and can even provide for a detailed "window" on a given property in which a building must stand. The municipalities are not forced to issue detailed development plans; if no such plan exists, as a general rule, all new buildings must comply with the existing uses and sizes of buildings in the immediate neighbourhood.

While zoning and planning is a federal and local competency, it is the state's legislator's authority to set out the legal framework for technical requirements for buildings (such as concerning building materials, distances between buildings, fire prevention and other health and safety issues) and the permit procedures. This legislation differs in every state to a varying degree. The states also have authority to legislate monument protection, an issue that may have a (costly) impact if a property is protected or located close to a protected monument.

On top of these general building requirements, developments with a broader impact on the environment (such as high-rise buildings or industrial facilities) may need additional environmental impact assessments prior to being permitted.

It is to be noted that large industrial and infrastructure projects are not subject to "normal" building permits but regulated by individual federal or state laws

Greece Small Flag Greece

  1. Border Areas
    The acquisition of real rights in regions of Greek territory designated as border areas is permitted to individuals and legal entities that are Greek or have their citizenship or place of business within the EU and the EFTA without any limitations, as well as to third countries nationals but under the prerequisite of a prior authorization by the Greek state.
  2. Forest Areas
    The alteration of use of forests is prohibited, except where rural development or other uses imposed for the public interest prevail for the benefit of the national economy. Private forests or forest areas or parts thereof that were destroyed by fire cannot be transferred by segmentation or by fractional with a transaction inter vivos for a period of 30 years of their destruction. Only transfer of private forests is permitted and requires a certificate issued by the Forest Registry evidencing that the area was not destroyed by fire after June 1975 and evidence of private ownership (either court decision in cases where the characterization of the area is contested, sequence of ownership titles or relevant legislative provision for the forestry concession).For the owners of private forests and forest areas bigger than 50,000 square meters that they want to convey to others by sale, it is established a right of preference of the Greek State to acquire them on equal terms.
  3. City-planning restrictions
    The master planning of the country, and the arrangement, the urbanization and the expansion of towns shall be under the control of the State, in the aim of serving the functionality and the development of settlements and of securing the best possible living conditions.

    To designate an area as residential and enable the city-planning, the properties included therein must participate, without compensation, at the disposal of land necessary for the creation of roads, squares and spaces for charitable purposes or for the implementation of key public urban projects, as required by law.
    The transfer of ownership of land in order to create non-integral plots is prohibited.

  4. Archaeological Sites
    Monuments, traditional areas and historic elements are protected by the State. To permit construction in cities (municipalities) or villages (communes) or rural areas, that have been designated as sites of archaeological interest or that are located near archaeological monuments, a written consent of the archaeological service is required, after a survey is carried out.

    In case of an impediment, or of a building of over 250 sq.m or of height of more than two floors, the case is referred by recommendation of Antiquities at the local Council of monuments. If the opinion of this Council is negative, the interested party has the right to object to it.

  5. Environmental Restrictions
    The protection of natural and cultural environment constitutes a duty of the State. The State has an obligation to take special preventive or repressive measures in the context of the “principle of sustainable development”. The majority of environmental legislation in Greece results directly from the incorporation of EU legislation in national law, with the exception of legislation for the protection of forest ecosystems.
    Law provides a special status of environmental licensing of projects and activities, including the constructions and operations that may have an impact on the environment. Also, from year 2011, the issuance of the Energy Performance Certificate for all buildings, which are used for residence (permanent or holiday), offices, commercial purposes, etc. is required before the property can be leased or transferred.
  6. Protection of the coast and beaches
    Law 2971/2001 provides that the coast and the beaches are properties of common use, that belong to the State, which is responsible for their protection and management, as the main destination of these zones is the unimpeded access to them. The construction of buildings and other structures on the coast and the beaches is not allowed, except for the pursuit of objectives related to public interest, environmental and cultural purposes.

Hungary Small Flag Hungary

The general sources of law in this regard are the Construction Act (Act LXXVIII of 1997) and Government Decree No. 253/1997 on the National Settlement and Building Requirements (in Hungarian: OTÉK). These primary sources of zoning laws apply throughout the entire country.

Based on these primary sources, local governments / municipalities must adopt their own structural plans, zoning maps and local building and townscape codes applicable to the area of the given municipality. Consequently, the specific building regulations and zoning plans are passed on the local level.

The framework of the zoning and building regulation is set forth in the Building Act (Act LXXVIII of 1997), and Government Decree 253/1997 (XII. 20) on Zoning and Construction Requirements. In addition, local municipalities are entitled to regulate and further specify their zoning and building provisions within the framework of and in compliance with the national regulation.

General rules on the protection of environment are set forth in Act LIII of 1995 on the Protection of Environment. Vertical environmental rules are also stipulated in several other acts and decrees.
Hungarian law provides for several types of permits relating to construction works. The applications must be filed with the competent construction authority.

  • A demolition permit is required for demolishing any superstructures. The permit is valid for one year.
  • The provisional building permit provides a preliminary review of the planned construction for the applicants. It is generally used in cases of bigger constructional projects that might have an irreversible effect on the area or if the project is not completely in line with applicable zoning provisions. The provisional building permit is valid for a one year period which may be extended once.
  • Construction works may be commenced based on a building permit. The building permit is valid for three years. It contains all special authority approvals in addition to the binding building and environmental provisions related to the construction works. The building permit may be extended on maximum two occasions for additional one- year periods, provided that the construction and zoning plans were not substantially amended.
  • An occupancy permit must be obtained after the completion of the construction works. The permit is issued if the building is appropriate for use and was constructed in accordance with the building permit. The construction authorities conduct an on-site examination in the course of issuing the occupancy permit.

There are also permit for function change and the retroactive building permit

India Small Flag India

Planning and zoning is regulated under State legislation and municipal regulations.

Most urban and urbanisable areas have regional and local planning authorities who prepare and revise regional and city-wise development plans providing for land use for public purposes (like roads, gardens, playgrounds, schools, hospitals, public buildings) and private purposes (like commercial, industrial, residential).

Local authorities have framed Development Control Regulations and Building Byelaws prescribing the extent and nature of construction permissible and the procedure for obtaining sanctions and “Occupation Certificates”, which are mandatory before premises can be occupied. Construction which is not authorized, that is, not in compliance with statutory requirements, is liable to be demolished without payment of any compensation to the owner / occupant.

In areas other than urban and urbanisable areas, the revenue authorities of the State Government regulate construction by prescribing conditions while permitting conversion of agricultural land for non-agricultural use.

In eco-sensitive zones like lands within 500 meters of high tide line, there are severe restrictions on construction and use.

Ireland Small Flag Ireland

The Planning and Development Acts 2000-2019 (the “Planning Acts”) govern planning and zoning matters. The Planning Acts regulate the zoning of areas through a variety of development, sustainability, landscape conservation and special amenity plans. Most of the functions reserved by the Planning Acts are exercised by the local authority in the area where the relevant property is situated. There are currently 31 local authorities in Ireland, each a planning authority for the purposes of the Planning Acts, responsible for monitoring and enforcing compliance with planning laws in relation to property in its area and responsible for making decisions regarding applications for planning permission. Where suitable grounds for appeal exist, the decision of the planning authority, including conditions imposed, may be appealed by the applicant to An Bord Pleanála (the Planning Appeals Board).

Generally, planning permission is required for any development of land or property, unless the development is specifically exempted from this requirement. The term “development” includes the carrying out of works (building, demolition, alteration) on land or buildings and the making of a material change of use of land or buildings.

Japan Small Flag Japan

The City Planning Law is the fundamental source of use, planning, and zoning restrictions on real estate. Under the City Planning Law, the area in which real estate resides is categorized as a “city planning area”, a “quasi-city planning area”, or “other” . If the real estate is located within an area categorized as a “city planning area” or “quasi-city planning area” then, in principle, a development permit will be required to develop the real estate. The difference between a “city planning area” and a “quasi-city planning area” is that a “quasi-city planning area” does not entail the Districts and Zones mentioned below, because the regulations are generally not intended to actively promote development in the “quasi-city planning area” but rather to preserve that city’s environment.

In terms of degree of urbanization, the city planning area includes two main categories of area classification, “urbanization promotion areas”, which consist of those areas where urban areas have already formed as well as those areas where urbanization should be implemented preferentially and in a well-planned manner within approximately the next 10 years, and “urbanization control areas”, which are those areas where urbanization should be controlled. In general, development is more restricted in urbanization control areas than in urbanization promotion areas.

Furthermore, in terms of usage of the real estate, city planning areas are further divided into many districts and zones such as, for example, low-rise exclusive residential districts, commercial districts, and industrial districts. In each district and zone, there are different restrictions concerning what types of buildings can be constructed.

Additionally, the Construction Standards Law, which regulates the construction of new buildings and the refurbishment of existing buildings in city planning areas and quasi-city planning areas under the City Planning Law, is just one example of the many laws related to the City Planning Law, at both national and regional levels. As a result, it is difficult to judge precisely which laws apply to any given property, and the best way to find out is to check the “explanation sheet of important matters” (juyo jiko setsumei sho) for the building. Therefore, if you want to know the entire landscape of the restrictions, an “explanation sheet of important matters” (juyo jiko setsumei sho) prepared by the broker or the seller is usually one of the major documents that should be reviewed, as it includes important information such as zoning restrictions.

For further confirmation, you can consult directly with the municipality in which the property is located.

Kenya Small Flag Kenya

Use, planning and zoning restrictions are imposed on property in Kenya pursuant to Kenya’s physical planning laws. The Physical and Land Use Planning Act commenced in August 2019, repealing the previous legislation governing these matters. The legislation seeks to ensure that physical planning across the country is standardised and that any development within Kenya conforms to set policies and the national physical and land use plan. Landowners are required to obtain prior development permission before embarking on any activity that is deemed as a development. The by-laws of the relevant county also apply to properties located within that county.

Mexico Small Flag Mexico

In general, municipal authorities have jurisdiction over urban development and land use by enacting zoning plans and ordinances. A specific municipal agency is in charge of imposing and supervising compliance with planning and zoning restrictions.

Moreover, Federal and state governments can also intervene through their respective legislation setting standards as to the use that may be given to specific areas; for instance, there is a general statute that applies to all the different levels of government (Ley General de Asentamientos Humanos, Ordenamiento Territorial y Desarrollo Urbano) which is adopted, regulated and applied specifically by each state. Besides, Federal, state and municipal authorities may also provide limits to land use through the enactment of several environmental regulations.

The most common permits and licences required for real estate developments are the license for land use or zoning certificate (licencia de uso de suelo), environmental and construction permits. Operating licenses and liquor licenses may also be required.

Monaco Small Flag Monaco

The Urban Planning Regulations (Règlement d’Urbanisme) define the rules of construction which fall within the scope of the Principality’s urban development. It provides for general principles and issues detailed plans providing for zoning restriction. The Principality is divided in seven regulated districts themselves divided in various zones.

Use, planning and zoning restrictions on real estate are regulated by:

  • Ordinance no. 3.647 of 9 September 1966 concerning urban development, building and road works, amended;
  • Sovereign Ordinance no. 4.482 of 13 September 2013 defining and regulating urban planning in districts covered by the ordinance, modified.

The Urban Department (Direction de la Prospective, de l’Urbanisme et de la Mobilité) is competent to authorise any real estate construction or renovation as it requires the prior grant of specific permits and administrative consents. It also supervises their compliance with the regulations and authorisations granted.

Russia Small Flag Russia

Real estate use, planning and zoning are primarily regulated by the municipal (local) authorities, except for some cases when regional authorities are in charge of this issue (for example in Moscow). The municipal authorities adopt the so-called “land use rules,” which include zoning maps where certain areas are designated for residential, commercial and industrial use and usage restrictions are imposed. The municipal authorities also approve development plans, where anticipated changes of the zoning maps are reflected.

Further, the regional and federal governments also participate in the planning of territories by adopting their own territorial layouts on a more general scale.

All zoning and planning documentations have to be carefully considered during due diligence and are generally publicly accessible. However, since Russian real estate law is in a transition phase, for many areas planning documents are not yet developed or are only available as drafts, which creates additional risks related to the uncertainty of the public policies to be established in these areas.

Romania Small Flag Romania

Law no. 350/2001 regarding the territorial planning system provides building restrictions and zoning obligations.
The planning system is mainly structured on three levels, as follows:

  • General Urban Plan (PUG). The PUG is the most extensive urban plan providing for short-, medium- and long-term planning specifications for a municipality, city or a commune.
  • Zoning Urban Plan (PUZ). The PUZ is a more detailed plan than a PUG, involving the development of a particular area in the territory of an administrative unit. The PUZ may be mandatory for a certain area if this is provided in the PUG.
  • Detailed Urban Plan (PUD). The PUD is exclusively drafted to provide details and clarifications on the requirements and regulations set out in the PUG or PUZ, or to set out construction specifications. For individual construction projects, the PUD may derogate from the applicable PUG/PUZ.

The above-mentioned regulations are approved at various levels of local government, usually by deliberative local or county councils. Also, they are valid for the time period stated therein.

Slovenia Small Flag Slovenia

Development, construction, spatial planning and use of real estate are regulated by the state and local authorities through urban development plans of municipalities, which determine the use of specific plots. Construction is only allowed after acquiring a building permit. This permit can be granted only if construction is provided for in urban plans. Urban development plans determine which construction projects are allowed at certain locations, their size and type.

Control is exercised in the construction permit obtainment procedures, as the competent authorities are obliged to reject the request for the issue of a construction permit if the intended construction contravenes the provisions of the applicable spatial plan. Some existing structures are protected because of their cultural or historical importance and can be renewed, modified, reconstructed or replaced only with approval of the competent administrative authority and within the scope of their instructions.

Spain Small Flag Spain

Urban development
Anyone thinking of investing in real estate in Spain must bear in mind the existence of a complex system of laws and regulations adopted by the State, the Autonomous Communities and the Municipalities relating to urban development, i.e. the transformation, construction and use of land.

According to the Spanish Constitution, the Autonomous Communities hold exclusive powers with respect to planning, meaning that they are entitled to approve laws and regulations on this matter that will have to be complied with by the Municipalities when approving their respective urban development regulations. Regional laws and regulations on planning, amongst others, govern types of zoning plans, land classification, uses of the land, rights and obligations of owners of the land subject to zoning procedures, assignment of land in favour of the Municipality, and construction licences. However, although the Spanish State does not hold any powers with regard to planning matters, due to the fact that they affect ownership rights, it has passed legislation on ownership and valuation of land. In light of the provisions established in both the laws and regulations approved by the Autonomous Communities and the Spanish State, both the Autonomous Communities and Municipalities approve plans governing zoning and planning matters within the boundaries of their territories.

Municipalities are entitled to define the classification and qualification of their land in the terms established in the regional laws and regulations. The General Municipal Plan is the regulation which establishes the classes of land and the possible uses. The General Municipal Plan is initially and provisionally approved by the City Council, but it is finally approved by the Administration of the relevant Autonomous Community where the Municipality is located. The inclusion by such General Plan of a certain plot within a category of land is of tremendous importance from the perspective of the rights held by its owner as regards its urban development use, especially in respect of the construction of buildings on such plot. In general terms, the land can be classified in three categories:

  • Urban land (suelo urbano): this is land which has already been built upon and is integrated into the urban area, with all the basic zoning services (mainly roads, water and energy supply and sewage systems) or may be built upon or transformed as it has the urbanisation infrastructures and equipment necessary for its corresponding urban development use (i.e. access, water supply, drainage and electricity supply). For land to be granted this category it has to be urbanised beforehand, so that basic services can be provided thereto and it can be classified according to the General Plan. Usually, the General Municipal Plan will establish the uses and constructing parameters applicable to urban land. Otherwise, the Municipality will have to approve regulations further implementing it and, where necessary in this class of land, adopt decisions to redistribute ownership rights and assign responsibilities, as well as authorising the urbanisation measures required for the implementation of basic zoning services.
  • Land suitable for urban development (suelo urbanizable): land considered necessary by the Municipality to guarantee the growth of the population and economic activities. This land does not bear any zoning services and is considered "solar", that is, land suitable for urban development. In order to transform this type of land into urban land, the Municipality will have to approve regulations implementing the General Municipal Plan, approve decisions to redistribute ownership rights and assign responsibilities, as well as authorising the urbanisation measures required for the implementation of basic zoning services.
  • Non-buildable or rustic land (suelo no urbanizable): this is land which in general cannot be built upon due to it being subject to special protection rendering urban development impossible or unadvisable, or due to its agricultural, forestry or livestock value.

The classification of land, apart from conditioning the urban development capacities of the owners, also determines the valuation which must be given by the Authorities to the land for the purposes of establishing a fair price should it be subject to expropriation, with such valuation increasing in line with the increase in its urban use.

Urban development regulations are implemented by the City Councils via the granting of licences, and also by imposing the corresponding fines when a party infringes any urban development regulation or applicable State and regional laws and regulations.

In addition, it is worth remembering that, despite the aforementioned urban development capacities conferred on City Councils, the Autonomous Governments in certain cases usually retain supervisory powers over municipal urban development activities, as can be seen in the definitive approval of certain urban development instruments, or even in the imposing of substantial fines.

Construction-related local licences and responsible declarations
Construction activities are subject to supervision by the relevant Municipality. In the event of significant construction works, these would be subject to the granting of works and first occupancy licences. Where construction works are considered minor, instead of being subject to the granting of construction licences, a responsible declaration or notification to the Municipality would suffice. Both regional laws and regulations and local regulations govern construction licences and responsible declarations or notifications.
Where construction licences are required, prior to commencing the relevant works, the interested party must obtain the works licence. This is the licence that will establish the construction parameters applicable to the relevant project and will verify the project's compliance with the provisions established in the applicable zoning laws and regulations. In order to obtain this licence, amongst others, it is necessary to present a construction project signed by an architect and approved by the corresponding professional association, to pay the corresponding taxes, as well as, where applicable, to provide sufficient guarantees (bank guarantee, etc.) ensuring the execution of the works. If the applicant complies with the requirements established in the applicable laws and regulations for the granting of a works licence, the Municipality is not authorised to deny the granting of such licence.

Once the construction works finalise, a first occupancy licence must be obtained. The purpose of the first occupancy licence is to verify that the works have been carried out in the terms of the previously granted works licence. Generally, the granting of such licence is preceded by an inspection of the building by the City Council's technical services.

In the event of minor works, the interested party must file a responsible declaration or notification related to the works to be carried out, stating that they comply with applicable laws and regulations. In certain cases, a technical project will have to be submitted. Depending on the scope of the works and the relevant Municipality, the works can be commenced after filing the document or after a certain period of time if the Municipality does not oppose them. There are regions where once the works are finalised, the interested party must send a communication to the relevant Municipality providing information on the first occupancy of the premises, as the case may be. In any event, the Municipality is entitled to inspect the works and adopt any measure to restore legality, as the case may be.

It should be pointed out that such licences and responsible declarations are required from the owner of the property and, depending on the case, also from the property's occupants, such as, for instance, tenants of office buildings or retail units. Should any person or entity carry out any works or activities without previously having obtained the corresponding licence, the City Council may impose a fine, as well as take other urban development-related measures (such as, for example, ordering the suspension of the activities or works carried out without a licence, declaring the closure of the building or premises, etc.)

Finally, note that any amendment to the relevant authorised or notified works would require an additional works licence or notification, depending on whether the works were considered major or minor.
General activity-related authorisations, licences and responsible declarations

The uses of a building are subject to the granting of an environmental authorisation, an environmental or activity licence (the name changes depending on the Region) or other type of permit (if the activity does not cause pollution but the Municipality exceptionally considers that it should be subject to a licence) or to a notification or responsible declaration, depending on the level of pollution to be caused by the activity in question. Environmental authorisations are granted by the relevant Autonomous Communities in those cases where the activity causes high pollution and must be obtained prior to any construction licences. Environmental licences and other types of permits are granted by Municipalities and must be obtained prior to, or at the same time as, the relevant construction licences. If a responsible declaration or notification is required, it must also be filed with the Municipalities.

Generally, environmental/activity licences establish the parameters which the activity must comply with from an environmental legislation perspective, and concerning the fire protection and health and safety conditions of the building according to the use for which the building was constructed. Prior to commencing the relevant activity, the initial control or operating licence must be obtained, evidencing that the activity is fully compliant with the conditions and obligations established in the previously granted environmental licence. Afterwards, periodic controls and renewal of the licence must be carried out. Any amendment of the activity is subject to the granting of a new environmental licence and subsequent initial control. In those cases where the activity does not cause pollution but exceptionally the Municipality subjects the activity to the granting of a permit, prior to commencing the activity, an operating licence will have to be obtained.

The entity carrying out the activity is the entity obliged to obtain the above-mentioned authorisations, licences and permits or to file the relevant responsible declaration or notification. Failure to obtain them is considered an infringement of the applicable legislation subject to sanctions that include, amongst others, substantial fines and total or partial, final or temporary, suspension of the activity or total or partial seizure of the premises.

Specific activity licences and authorisations
In addition to the above-mentioned general activity/environmental licences, depending on the sector, the activity may also be subject to additional licences and authorisations to be granted by the State Administration or the Autonomous Communities. For instance, some Spanish Regions require the granting of a commercial licence for the opening of large retail premises such as malls.

Sweden Small Flag Sweden

Planning and zoning is governed at municipal level, with the Swedish municipalities as the only competent decision-making authority (commonly referred to as the “municipal planning monopoly”).

Zoning plans/detailed development plans for the use of land are developed and adopted by the municipalities’ city planning administrative divisions, often at the request of and in consultation with a private developer or property owner. The planning process allows for neighbours and others affected by the suggested development to express concerns/suggested alterations, but the municipal council may however ultimately decide to adopt a plan irrespective of any popular opposition. Municipal decisions on planning can of course be appealed against and contested in court, but under normal circumstances only by a party who has submitted written comments during the planning process, which have been disregarded in the municipality’s final proposal.

A development plan may cover both publically and privately owned land, and may involve obligations for property owners to surrender private land to the municipality for public use. When a development plan stems from a private initiative, the municipality will also demand that the property owners benefitting from the new development opportunities finance the construction of public spaces/facilities serving the area (such as new roads and parks etc.). Private land owners and developers will be required to enter into so called development agreements (Sw. exploateringsavtal), allocating the public expenses among the property owners/developers. These agreements may be difficult to negotiate as the municipalities are often reluctant to make any changes to their template contract formats.

The adoption of a development plan is followed by an implementation period ranging between five to fifteen years. During this time, the municipality may not alter the plan without compensating any affected property owners. This right to develop land pursuant to an adopted development plan during the implementation period is generally referred to as a building right. Permits are required for demolition, excavation or construction works or altered use of a building, but must always be granted provided that the suggested development complies with the provisions set forth in the applicable development plan.

Thailand Small Flag Thailand

Planning and zoning regulations in Thailand are divided into general town plan and specific town plan. The main regulation is the Town Planning Act 1975, which provides outlines and implementation of general town plan and specific town plan, surveillance to ensure that everyone complies with the town plan regulations including the duties and penalties thereunder.

For each specific province, there are specific ministerial regulations together with a plan setting the utilisation of the land classified by categories in colour, for example purple indicates manufacturing areas, red indicates commercial affair areas, and green indicates rural and agriculture.

In addition, each category will dictate the (i) FAR (Floor Area Ratio) stipulating the maximum area of construction that can be built in that area; and (ii) OSR (Open Space Ratio) stipulating the required open space for the entire area.

Turkey Small Flag Turkey

In Turkey, there are different kinds of zoning plans and they are regulated by different public institutions based on their type. On the other hand, the local municipalities are regulating the application-zoning plans and these include the necessary details for the construction. Under the zoning legislation, the construction projects must comply with the conditions stated in the relevant zoning plans. Those undertaking a construction projects must obtain a building permit from the local municipality or from the special provincial administration depending the location of the real estate. In order to use a building after the construction is finalized, a usage permit must be obtained from the relevant authority which issued the building permit.

United Kingdom Small Flag United Kingdom

In England and Wales, the use and development of land are regulated primarily by the town and country planning legislation, which establishes a system of "development control" and "development planning" for these purposes.

Development Planning framework: National authorities, each Local Planning Authority ("LPA") and in some cases, neighbourhood bodies, create a hierarchical framework of plans which go together to create the "Development Plan" for the relevant area. Development Plans contain policies as to how land should be used and the types of development that should be permitted or prohibited. At a local level, plans often allocate specific areas or individual sites for suitable uses or types of development. These plans are periodically reviewed and updated.

Development Control framework: Planning permission is required to carry out the "development" of land (meaning the carrying out of building or engineering works on the land  or the making of a material change in the use of land). Any person can make an application for planning permission, although in practice, the owner's consent is often required. In most cases a planning application is made to the LPA. Larger projects will often require an Environmental Impact Assessment to be submitted with the application. The LPA (usually the local council, or unitary authority of the area) should determine the application in accordance with the Development Plan unless there are justifiable reasons to refuse it. Applicants have rights to make an administrative appeal against refusal of planning applications; there are also rights for third parties to challenge, in the courts, the grant of permission on limited legal grounds.

Often an applicant will need to enter into a "Section 106 Agreement" with the LPA in order to obtain planning permission. A Section 106 Agreement requires the applicant to carry out works or pay money, or establishes controls on the use of the land, in order to overcome planning objections to the development proposal. Development of the site may also be subject to a development tax called Community Infrastructure Levy, which is charged at local level to pay for infrastructure necessitated by development in the area.

It is possible to carry out some development without express planning permission, for example:

  • some changes of use (e.g. between shop and food and drink uses); and
  • the carrying out of various works, for example: alterations to existing premises, demolition, or development by bodies carrying out public functions (statutory undertakers).

Heritage and Environmental Controls: There are a number of other controls that protect the historic built environment or the natural environment, for example:

  • Listed Buildings: A building which is of special architectural or historic interest can be "listed" by the Government, meaning that any development affecting its special characteristics is subject to obtaining Listed Building Consent.
  • Conservation Areas: A wider area which is of special architectural or historic interest can be designated as a Conservation Area – an LPA will need to take this designation into account when determining any planning application within the area.
  • Sites of Special Scientific Interest (SSSI): A site of interest for its wildlife or geology can be designated as a SSSI. Consent from governmental body, Natural England, may be required to carry out any development on the site.

Major infrastructure projects: There is a separate system of consenting for nationally significant infrastructure projects. The Secretary of State grants consent for a project under this regime by making a "Development Consent Order".

Devolution of Powers to Wales: At the detailed level, planning rules for England and Wales are beginning to diverge due to devolution of powers to the Welsh Government. Processes and requirements for planning applications and other aspects of development planning and control may therefore be different depending on whether a development is proposed in England or Wales.

United States Small Flag United States

Governmental Regulations:
Use, planning, and zoning restrictions are enacted and enforced by each municipality (e.g., city, county or town) through statute. Use, planning and zoning laws affect the use of a property, the standards to which any buildings located on a property must be constructed as well as limits on lot size, building size, height, floor area ratio, number of rooms, parking, and setbacks. If the property is being operated under a permitted use, then such use is considered to be permitted "as of right". Properties which were constructed prior to current use, planning, and zoning restrictions are typically grandfathered into the current code, meaning that they are considered "legal non-conforming" and can remain and, in some cases, be rebuilt to the same extent they were non-conforming following a casualty. An owner of property may apply for a special use permit or variance if compliance "as of right" would cause it undue hardship which, if approved, would allow for additional uses or other non-compliance with applicable regulations.

Although use, planning, and zoning restrictions are primarily shaped by local law, federal law can pre-empt local law.

Private Restrictions:
Use, planning, and zoning restrictions may also be created by contract between owners of interests in real property. These are often found in reciprocal easement agreements and covenants, conditions, and restrictions in connection with planned developments, such as shopping centers and subdivided housing developments where property owners benefit from having the use and characteristics of adjacent properties conform to certain specifications. The agreements "run with the land" and are almost always recorded in the real estate records. Certain municipalities, such as the city of Houston, Texas have historically relied exclusively on private deed restrictions rather than statute in order to regulate use, planning, and zoning restrictions.

Indonesia Small Flag Indonesia

Usage, planning and zoning are regulated at national and various regional levels. Generally, spatial planning is determined by the Government of Indonesia through a “general spatial plan” and a “detailed spatial plan”. A “general spatial plan” takes the form of an RTRW or a Rencana Tata Ruang Wilayah (Regional Spatial Layout) and is determined at a national, provincial and regional or city level. An RTRW lasts for 20 years and is reassessed every five years. A “detailed spatial plan” typically takes the form of, among other things, an RDTR or Rencana Detail Tata Ruang (Detailed Spatial Layout) which is determined at a regional or city level. An RDTR typically includes a map setting out the zoning and permissible function for each area in the region.

Usage, planning and zoning requirements in relation to a specific project will be confirmed through specific licences issued by the regional government (eg the Location Permit or similar licence, and the City Planning Statement Letter (Keterangan Rencana Kota or “KRK”) or similar licence). In a real estate due diligence transaction, it is critical to review these licences in order to ascertain that the property is in line with the area’s usage and zoning requirements.

Morocco Small Flag Morocco

Strategic plans and zoning schemes are established through the issue of Urban Development Master Plans (Schémas Directeurs d'Aménagement Urbain) and zoning plans (plans de zonage). Each municipality drafts development plans (plans d’aménagement), which divide the area into zones of different uses, and attribute building density ratios to each zone.

In practice planning and zoning restrictions are applicable throughout the administrative authorization that may or may not be granted to build a new building or refurbish an existing building.

The authorities in charge of regulating the development and designated use of individual parcels of real estate are mostly the local authorities, including the urban agencies and the municipal presidents responsible for issuing building permits.

The main authorisations and permits required for the construction of a real estate project may be summarised as follows:

- environmental acceptability decision (decision acceptabilité environementale): such approval must be sought by companies that carry out projects relating to a certain type of activity, before the ministry of environment, on the basis of the results of an environmental impact study. In principle, the authorities request such authorization / decision prior to issuing the building permits and the certificate of compliance

- Hazardous facilities (installations classées): prior to starting the construction of insalubrious, inconvenient or dangerous facilities, an approval must be obtained from relevant authorities or a declaration has to be filed, depending on the nature/class of the facilities.

- Building permit: any construction work shall be subject to a building permit, delivered by the president of the city council for the location of the contemplated construction. The building permit is deemed delivered unless objections are raised by the administration within two months of the land owner or developer filing the request. The building permit is delivered when the contemplated constructions are deemed to satisfy the legal and regulatory provisions in force (zoning and planning plans).

- Subdivision permit (permis de lotir) and authorisation to split up (authorisation de morceller): the splitting up of a plot into several parcels needs to be granted authorisation to subdivide and authorisation to split up in order to be able, in particular, to split the primary land title into several land titles, allowing each lot to have a separate land title.

- Certificate of compliance (certificat de conformité) or occupancy permit (permis d'habiter): such permit/certificate must be obtained upon completion of any construction in order to confirm that the buildings erected are in accordance with the provisions of the building permit. This permit/certificate is a prerequisite to the use of the erected building.
In case of non-compliance with the applicable regulations related to construction and planning law, a fine ranging from MAD 1,000 to MAD 100,000 may be ordered against the violating party and the following measures could be taken:

- closing of the construction site until proper building permit is obtained;
- obligation to modify the constructions so as to conform with the regulations in force; or
- obligation to demolish the construction works.

Anyone that continues to operate a project in spite of a decision to close the construction site may be punished by imprisonment of fifteen (15) days to three (3) months.

Updated: December 17, 2019