Expropriation valuations: technical and expert reports

The valuation for expropriation purposes is a technical process that leads to determining the price to be received for the affected assets in a compulsory expropriation procedure. The determination of the price is one of the phases of any expropriation procedure.

At Gesvalt we elaborate independent technical and expert reports,based on market criteria and current regulations, which guarantee fair and defensible compensation before administrations and courts.

We are a leading company with more than 30 years of experience in advising companies in the areas of Consultancy and Valuation. To have the backing of an independent consultancy firm such as Gesvalt, for the valuation of expropriations ensures objectivity, technical rigour and fair and defensible compensation.

What is expropriation valuation and when does it apply?

Valuation for expropriation purposes is a technical process that leads to determining the price to be received for the property affected in a compulsory expropriation procedure. This type of valuation guarantees that the expropriating Administration adequately compensates the loss of the asset or right, providing transparency and security for the expropriated party, the expropriating entity itself and the beneficiary.

What is a compulsory purchase?

Forced expropriation is the deprivation of the property or rights of a private individual by the Administration, based on reasons of public utility or social interest, in exchange for financial compensation (the justiciation).

Legal framework: Law, regulation and jurisprudence

In order to determine the economic equivalent of the real estate to be expropriated, the State Land Law is applicable, which is currently the Royal Legislative Decree 7/2015, of 30 October, which approves the Consolidated Text of the Land and Urban Rehabilitation Law. This regulation establishes the principles of necessity, proportionality, public utility and fair compensation, guaranteeing the protection of the rights of the expropriated.

Common purposes: public works, urban planning, infrastructures

Expropriations are usually applied in projects linked to transport infrastructures (road and railway construction), electricity grids or hydraulic infrastructures, as well as in urban planning actions, for the acquisition of public facilities or for the development of works of social interest. In all these cases, professional valuation is key to ensuring that the compensation is objective, defensible and in accordance with the law.

How is the price determined in an expropriation?

The fair valuation is the financial compensation received by the owner for the loss of his property or right following a compulsory expropriation. In order to calculate it, a technical and objective assessment which takes into account the use of the property, its location, its state of conservation, the current market situation; in addition, if applicable, the damage caused, such as consequential damage and loss of profit. (according to the principle of full reparation). The ultimate objective is to ensure fair and proportionate compensation).

Market value, consequential damage and loss of earnings

The determination of the price includes not only the value of the expropriated property or right (its market value) but also that of the damages directly resulting from the expropriation (consequential damages and loss of profit) with the ultimate aim of achieving full compensation for these damages in order to provide the injured party with full indemnity for the expropriation procedure.

Technical valuation criteria according to the type of asset (land, real estate, economic exploitation, ...).

The valuation criteria vary according to the nature of the asset:

Developed land or rural land: is valued in one case or another depending on its basic situation of urbanised or rural land, as set out in the TR 7/2015.
Property: the basic situation of the land on which it is built is considered, its physical characteristics, its state of conservation, uses and market comparables are considered.
Economic operations (mining, forestry, livestock, agriculture, photovoltaic or wind farms): financial and accounting methods are applied to reflect the revenue generating capacity, i.e. operating income.

Other expropriation valuations: easements

An easement is a type of expropriation, partial, not total, in which a burden or limitation is placed on a property (the servient estate), either for a public use or for the benefit of another property (the dominant estate) where the original owner retains ownership of the land with the specific burden and/or limitation.

The most common easements that we carry out at Gesvalt are: rights of way, rights of light and views, aqueduct, drainage, dividing walls and water. The establishment of this burden or limitation involves establishing the price as compensation.

Valuation of real rights

We determine the economic value of rights in rem such as usufruct, easement, right of superficies or use and habitation, both in expropriation proceedings and in civil or commercial transactions. These reports guarantee adequate and defensible compensation.

What services does Gesvalt offer in expropriation processes?

Independent technical reports for individuals, companies or administrations

We elaborate independent valuation reports which determine the price on the basis of legal and market criteria. These opinions are useful both for affected owners as to development companies or public administrations,ensuring impartiality and technical soundness.

Expert assistance in administrative and contentious proceedings

Our experts act as independent experts in expropriation proceedings, defending the interests of our clients in the administrative phase or, in case of appeal, in the contentious-administrative jurisdiction.

Experience in large infrastructures, urban planning and rural lands

Our extensive experience in the valuation of land, both rustic and urban, in projects linked to infrastructures (transport or energy), as well as in the execution of urban development plans, allows us to offer a specialised service adapted to each case.

Types of assets we value in expropriations

Urban plots, rural land and economic holdings

At Gesvalt, we value all types of land, considering its location, planning and potential for use, as well as productivity in the case of economic exploitation.

Warehouses, premises, dwellings and industrial holdings

We carry out valuations of residential, commercial and industrial properties, taking into account their condition, use and market comparables.

Concessions, rights and urban development uses

We determine the value of administrative concessions, rights of use and urban development rights,The aim is to guarantee fair compensation in each expropriation process, or urban management in its phase of equidistribution of burdens and benefits, in which the burdens and benefits of an urban development plan are distributed fairly among the affected owners.

Urban valuations

We carry out valuations related to the three main areas of urban planning (planning, management and urban discipline). This type of report provides technical and legal certainty in decision-making.

Frequently asked questions on expropriation valuation

Who can request a valuation in an expropriation process?

Both individuals concerned,as companies and administrations may request a valuation to determine the price of the expropriated property.

What should I do if I do not agree with the price?

If you do not agree with the fixed valuation, you can challenge it in administrative or contentious proceedings, relying on an independent expert report.

Can a private individual contract his own valuation report?

Yes, any owner can hire an independent valuation to defend his rights in expropriation proceedings.

Is a private valuation legally valid?

A private report drawn up by an independent expert has full technical validity and can be submitted as evidence in administrative or judicial proceedings.