Legal Frameworks Notes PDF

Legal Frameworks 1. Introduction to Environmental and Planning Law Why is the law important for real estate development? basis of project permitting basis of claims against the development basis of stakeholder participation...

Legal Frameworks 1. Introduction to Environmental and Planning Law Why is the law important for real estate development? basis of project permitting basis of claims against the development basis of stakeholder participation Basic Structures of the Law: By geographical scope of application: By Area of Law: Supranational Law Civil Law International Law (ex UN) Labour / Employment Law International treaties (ex Kyoto Protocol, Tax Law WTO) Criminal Law EU law Planning Law National Law Environmental Law constitution laws and ordinances Regional, local and municipal law Sources of law: Legislative body or person (e.g. parliament, a king, dictator) Government / Executive) via e.g. International Treaties General Administration (executive) via Ordinances, Decree, Administrative Rules Special Agencies (executive) via Ordinances, Administrative Rules Courts (iudicative) can be a de facto Source of Law e.g. US: Roe vs. Wade (1973) – legalizing abortion, and then deciding otherwise (2022) courts interpret laws, which can amount to de facto „lawmaking“ By private entities? such as standarization organizations Legal Frameworks 1  Basic Structures of Environmental Law Sources Environmental Law Combines supranational law Scope UN laws (Kyoto Protocol, Paris Accord, Hazardous Emission Control Substances Laws, Air, noise, vibrations, radiation, pollution Hazardous Waste Laws) Soil Protection / Contamination Cleanup with EU law (for European Union Member States only, of course) Waste almost all areas of environmental law in the Recycling, waste deposition, waste Member States of the European Union are now avoidance / sustainable product design directly influenced by EU law Water resources protection and national laws Hazardous material laws almost all supranational (and EU) environmental Nature preservation law, nuclear law, law needs to be transposed genetical engineering law into national law Climate change law (?) sometimes there are layers of local law as well non-Governmental „Law“ (expert standards) Subject Sources Environmental Law is, in principle, anthropocentric From the large to the small Nature is not, as a rule, protected “for its own National Planning Laws sake“ Building Code Not only humans / legal entities have legal Railway Planning Laws standing in court Airport Planning Laws As a rule, nature (animals, plants, natural structures) have no legal standing in court Street & Highway Planning Laws There have been important developments here in Regional Planning Laws the last decades Municipal Planning In New Zealand, the Te Urewera area and the (e.g. zoning plans) River Whanganui were each declared a legal “person” after a 2012 settlement In Spain, the salt water lagoon Mar Menor was declared a legal „person“ in 2022 Legal Frameworks 2  2. Introduction to Environmental and Planning Law What is the Building, Zoning & Planning Law about? WHERE to build WHAT to build HOW to build Where to build - Zoning Theory of Land Structure (for the purpose of Zoning) Land outside of the city Land in the City planned city-space un-planned city-space Regional planning Fixed planning Capital cities Harbours Capital functions - National Government, Main Highways / Railroads Ministries, Courts; Commercial hubs ex) stock Energy “highways” exchange Natural resources (quarries, mining) Middle Centres / Periphery Planning considerations: Infrastructure Geographic Circumstances: Streets / Public Transport Flooding / seismic risk / hydrogeological risk area / others… Utilities (Electricity, gas, heat, fresh water, sewage disposal, telecommunication…) Fresh Air Flow Public Utilities (Schools, Hospitals, Police, Fire Proximity to Adverse Neighbors (noise, Department…) smell, vibrations…) Neighborhood considerations Decision Making Process - The Planning Waterfall: Large Scale Planning Centralized decision-making (national / state level) Regional Planning Administrative decision-making (regional level) Municipal Planning Local (democratic) decision-making Often includes public transportation Each level must comply with the prerogatives of higher levels Legal Frameworks 3  Major-Impact Project Planning Airports, waste dumps, industrialized meat production, etc Regional / local administrative decision making Often includes public participation / hearing Municipal Planning / Zoning Plans Decision to promulgate a Zoning Plan Decision on local level by local parliament / government Basic zoning concepts are decided and explained Promulgation decision is publicized (incl. explanation / reasons) Fact-finding phase - Participation local citizens public authorities / agencies neighbour municipalities fact- finding phase - public hearing (optional) if necessary - re working on planning planning decision promulgation of the Zoning Plan (plan becomes binding law) Special kinds of Zoning Restructuring an Area: where real estate is, or has over time become, an impediment to development Upgrading an Area: where city quarters suffer structural deficits which can be rectified through a central planning and restructuring exercise Summary: -What is Building, Zoning & Planning Law about (where, what, how)? -Theory of Land Structure -WHERE to Build -The Decision-Making Process -Special Kinds of Zoning Legal Frameworks 4  3. Introduction to Building, Zoning & Planning Law What to build Different types of municipal zoning The degree of building / land use residential The “Footprint” of a Building on the building property primary use: residential housing, non-disturbing commerce Ratio of Property Area to Building Area commercial Ratio of Property Area to Floor Area primary use: non-disturbing commercial (office, (Ratio of Property Area to Cubature) retail, small trades) Building Borders (binding vs. limiting) industrial The Height of a Building, the Number of primary use: commercial (any kind) Floors large-scale retail The Distance to the next Building / special zoning Neighbor Property centre areas, small village, hospital, recreation What about un-planned inner city areas? How to determine permissibility of a building? The Players of Real Estate Development Unplanned RED Municipal planning Private players - developers, entrepreneurs Collaboration between municipality and developers - development contracts 4. The Building Permit All changes to the building situation of a property / plot of land are prohibited unless permitted before by the authorities But there are exceptions: de minimis exception planning exception integrated permit exception others Utilizing an exception does not mean the relevant laws do not need to be complied with Legal Frameworks 5  What it is What it is not the government permit to construct and also to the only government permit you will ever need, it change / alter / demolish a certain building or parts may be that several permits are required to of it construct and use: and the permit to use a certain building in a building permit + planning permission certain, defined manner + electrical / plumbing / irrigation / other permits monument protection tree / nature protection, etc Other common permits: Special Permitting rules restaurant / pub concession highrises water extraction permit public meeting places street usage permit fire protection industrial / technical permits parking the building permit is not an integrated permit in the EU Who can apply for the building permit? Distinguish: Material project control anybody, in principle property owner, lessee, usage right beneficiary sometimes even an interested party (a developer) Formal signatory righs: not just anybody (for certain parts of the application) architects, engineers, certain professionals Unless the building is immaterial The Procedure to obtain a building permit Talk. Negotiate. Agree Receive the building Permit Meet the city officials If you did not get what you wanted, object and amend Meet neigbors, other stakeholders Deal with third party objections Submit the building permit application Start construction! make amendments Legal Frameworks 6  Civil Property Rights and the Building Permit The government will not interfere in Civil Property Rights A building permit is no substitute for the necessary civil property rights Right to use the building property (ownership, lease) rights of the owners of neighbor properties other third party property rights rights of way, to maintain utility lines, to park architects’ intellectual property Who “owns” the building permit? what happens if… the building / property is sold? the human owner dies, or the corporate owner goes bankrupt? The difference between permits correlated to the facility (such as a building permit) and permits correlated to the permit holder (such as a permit to operate a restaurant / pub, a nursing home, a nuclear power plant, a genetic engineering lab etc) A building permit “goes with the land” as a rule, no need to assign the building permit but the permit may (factually) be lost or destroyed - don’t neglect your due diligence! 5. Building Permit Complications → it is not possible to comply with all legal requirements. → it is possible to comply, but you need to include another property. → it is necessary to clarify a specific matter first.... the project is to big / complex to handle at once.... the building exists, but there is no building permit Deviations It is not possible to comply with all legal requirements → deviations What is it we need a deviation of ?... i.e., who do we need to ask ? Does this deviation touch a basic planning concept ? Is this regulation designed to protect third parties ? Legal Frameworks 7  Public-law liens It is possible to comply, but you need to include another property → public law lien Sure, we can comply with building law requirements...... we just need to use parcel B, too. Okay... then you need to be the owner, or must have other usage rights and permitting authority must be confident that this cannot change in the future without its consent public-law lien is a public-law lien on property (B), because the lien is granted to the government public-law lien is a lien, because it is binding not only to the current owner of the neighbor property (B). It „goes with the land“ (i.e. binds purchaser, heirs etc.); public-law lien is not for money (not a „mortgage“), but an obligation by B to a certain tolerate property usage (by the owner of property (A)). From a practical point of view, it is advisable to secure A‘s usage right to B‘s property with a civil aw lien to make it go with the land, too. But this is not a „legal requirement“ of the public-law lien. Conceptual building permit It is necessary to clarify a specific matter first → the conceptual building permit utilized to facilitate permitting split may be as developer chooses and permitting authority permits usually: no partial permitting without a positive permit assessment for the total project I can‘t find the building permit... I don‘t know if there is one! The building exists, but there is no building permit → re-applying for a building permit for an existing building what legal / technical standards apply ? Usually, a legalization requires that the building would have been permissible, had a permit been applied for at the time of construction (no legalization of impermissible construction) Legal Frameworks 8  6. Urban and Environmental Legal Frameworks Soil & Water Protection (contamination/brownfield law) Waste LawWeapons ordnance protectionMonument protection Energy conservationClimate Change / Greenhouse Gas Law Water Usage LawAir Protection Soil & Water protection (contamination / brownfield law) What is contamination? Which media are we looking at? surface waters the soil leachate soil air groundwater “Contamination” is NOT determined relative to a “natural” status Bombs, USTs, pipelines are NOT contamination Contamination is determined relative to the danger to certain defined goods (usually anthropocentric) The goods determining hazard: ground water / drinking water plants / agriculture human health & safety Determination according to norms / standards How to determine soil / groundwater contamination? Phase 1: desktop study Phase 2: invasive testing (soil / groundwater / building material) Phase 3: remediation & determination of success monitoring of contamination Soil & water contamination and Waste Law So you have been remediating your brownfield but what to do with the excavated contaminated soil? and what about the Hazardous Materials from demolition? Weapons ordnance protection relevant only in areas with heavy bombing timing / delay ? required testing prior to excavation / use of bomb maps construction work costs? Legal Frameworks 9  Monument Protection Applies to existing buildings but also to archeological sites In existing buildings… how to determine wether or not monument protection applies? dealing with monument protection Potential archaeological sites: obligation to inform the monument protection authorities can lead to significant delay, and even stop, of construction In the ground there may be remnants of prior human construction such as foundations, underground storage tanks, pipelines, etc. All of these are “waste” and need to be disposed of according to applicable waste law. Climate change, energy conservation & greenhouse gas laws Building codes often include regulation on energy conservation Beyond regulation, there are industry norms which are not compulsory. So-called “green buildings”, ESG requirements and such Increasingly important for high-profile buildings and investments - investor / buyer requirements for many institutional investors 7-8. Stakeholders What is an „Environmental Clause“ in a Purchase Agreement ? The Difference between a warranty/guarantee and an indemnity Warranty: an UNKNOWN risk is allocated between Indemnity: a KNOWN risk is allocated between the the parties parties When to choose an indemnity or a guarantee? Known issues/defects reduce the sales price Unknown issues or extremely unlikely risks do not; one party takes such risk Parties risk assessment of a known risk may differ: Seller may not be willing to accept the discount because the risk has not yet materialized / may never materialize Buyer may not be willing to accept full price because the risk may materialize (at substantial costs) Legal Frameworks 10  Stakeholders Who/what is a „stakeholder“ ? Examples of stakeholders Who is not a stakeholder ? Environmental Law is, in principle, anthropocentric. Nature is not, as a rule, protected “for its own sake“ Nature (animals, plants, natural structures) have no legal standing in court “Standing” is a very different concept in different jurisdictions; accordingly, protection may be easier or quite difficult to obtain Legal interests of the stakeholders (stakeholders’ rights) individual property rights individual claims against the state / government the legal position of a third party any third party? individually / specifically affected third party? third party representatives Most important instances of legal stakeholder rights Norms designated by the lawmakers to protect third-parties Nuisance in excess of allowable levels noise, parking, lighting, vibrations, odors, dust Exception / deviation / dispensation from norms protecting neighbors Distance spaces between buildings Fire protection quality of fire walls, windows onto neighbor’s property, distance spaces Stability / structural safety Zoning general principle protection Procedural participation rights There are norms designated by the lawmakers to protect third-parties, for example distance spaces “…for the protection of the neighbors…” “…taking into due consideration the neighbors concerns…” Zoning maintenance allows the neighbor to defend against permits outside of the current zoning. It does not require individual harm. Legal Frameworks 11  Exception /deviation / dispensation from norms protecting neighbors -you cannot object because i got a dispensation -well, i can object against the dispensation… Stakeholder Participation Zoning Plan Building Permit Fact-finding phase - “Official” participation of stakeholders through permitting authority Participation neighbors / local Deal with third party objections citizens public authorities / agencies / NGOs neighbour municipalities The possible forms of stakeholder participation Participation in administrative proceeding (control: government) Participation in informal talks (control: developer) Lawsuits (control: stakeholder) Direct democracy participation, e.g. referendum, „citizen vote“ etc. The concept of Legal Standing “Who“ is entitled to bring legal action, ex: Neighbour Holder of a right in rem NGOs Neighbour Municipalities Spezialized Agencies Soil Protection, Nature Preservation, Airport / Port / Railway / Highway Agencies...) The concept of Legal Standing is VERY DIFFERENT in different jurisdictions Legal Frameworks 12  Stakeholder participation through LAWSUITS Object of the legal actions: 1. Legal action against laws parliament statutes Usually tried in front of a High Court (Supreme Court etc.) government ordinances Usually subject to certain, longer deadlines (e.g. two years) municipal regulations Usually subject to having exhausted „ordinary“ court action first Usually no „staying“ effect Usually directed against the law- making entity Usually protected by „de minimis“ violation stops 2. An administrative order / action ex. building permits Usually subject to tight deadlines (one month) Usually subject to more stringent standing requirements May or may not have a „staying“ effect Usually directed against the permitting agency 3. Legal Action to enforce compliance: Compliance orders, citizen suits The rule: an action against the authorities alleging the violation of plaintiffs rights Triangular legal relationship: Direct legal relationship: The exception: direct action by the Plaintiff against Examples: in US the so-called citizen suits the Permit Holder e.g. Clean Water Act - https://www.law.cornell.edu/uscode/text/33/1365 Legal Frameworks 13  4. Direct democracy participation (referendum, citizen vote, etc) Usually limited in scope (but real estate development projects regularly are „in scope“) Usually subject to a quorum of minimum voter participation As regards real estate development projects, usually limited to the local / municipal level becoming increasingly important ! Legal Frameworks 14