Development permit: the authorisation that structures a land division before resale by plots

A parcel of land acquired with a view to detaching three, five or fifteen building plots from it is not resold at the pace at which sale agreements are signed, but at the pace of the planning permission that makes it marketable. Between a prior declaration (déclaration préalable) processed in one month and a development permit (permis d'aménager) processed in three months, accompanied by an architectural, landscape and environmental project, servicing works and a completion guarantee, the difference in timetable and cash flow is measured in quarters. To this is added a variable that financing plans regularly underestimate: challenge by third parties, whose clearance period and length of contentious proceedings determine when conditions precedent can be lifted. This guide deals with the thresholds that tip a land division from the declaration regime to the development permit, the mechanism of the subdivider's completion guarantee and the management of litigation risk in a division and resale-by-lots structure.

Characterising the operation: what makes a division a subdivision

Article L. 442-1 of the French Town Planning Code defines a subdivision (lotissement) as the division, in ownership or in use, of one parcel or of several contiguous parcels, the purpose of which is to detach one or more plots intended to be built on.

A subdivision is the division, in ownership or in use, of one parcel or of several contiguous parcels, the purpose of which is to detach one or more plots intended to be built on. (Article L. 442-1 of the French Town Planning Code)

Three operational consequences follow. First, since Ordinance No. 2011-1916 of 22 December 2011, the criterion based on the number of plots detached over a rolling period has disappeared: the first detachment of a plot intended to be built on is enough to constitute a subdivision. The widespread idea that an operation remains outside the scope below a certain number of plots no longer has any basis in the text.

Second, the division may be carried out in ownership as well as in use. A building lease (bail à construction), a division in use by agreement or the making available of parcels intended to receive buildings all fall within the scope, even in the absence of a transfer of ownership.

Finally, the decisive criterion remains the intended use of the plots for building. The detachment of land that is already built on, with no intention of erecting an additional building on it, does not amount to a subdivision. Prudence nevertheless dictates that this intended use be made objective in the deed, because the competent authority assesses intention in light of the circumstances: whether the plot is buildable under the local urban plan (PLU), servicing, commercial communication, the terms of the sale agreement.

Article R. 442-1 of the French Town Planning Code excludes certain divisions from the scope, foremost among them the so-called primary division, carried out by an owner for the benefit of a beneficiary who has obtained a building permit or a development permit covering a group of buildings or a building other than a single-family house. This structure, used to transfer a site to a developer without going through the subdivision regime, presupposes a permit that has been issued and a rigorously ordered sequence of deeds. Any reversal of the chronology forfeits the benefit of the exclusion and returns the operation to the ordinary law of subdivisions, with a risk of nullity of the sale and of refusal of building permits on the plots.

Prior declaration or development permit: the real tipping point

The boundary between a subdivision requiring only a prior declaration and one requiring a development permit depends neither on the area of the operation nor on the number of plots, contrary to a persistent idea. It rests on two alternative criteria set by Article R. 421-19 a) of the French Town Planning Code.

The criterion of common roads, spaces or facilities

A development permit is required where the subdivision provides for the creation or laying out of roads, spaces or facilities common to several plots intended to be built on and specific to the subdivision. Each of the terms counts.

The notion of a road is not limited to a carriageway: a shared pedestrian access, a turning area or an access path to rear plots come under the same regime. The notion of a common facility covers shared internal networks, a transformer station specific to the operation, a retention basin, a collective drainage system and a waste collection room. Common spaces mean green spaces, shared parking areas and landscaped areas required by the local urban plan.

Conversely, the connection of each plot to an existing public road and to public networks already in place, without the creation of any common structure, keeps the operation within the scope of the prior declaration provided for in Article R. 421-23 a). This is the classic situation of the division of land alongside a municipal road, each plot having its own access and its own connections.

The dividing line often turns on a point of design. A project initially calibrated for a prior declaration tips into a development permit because the layout of the parcels requires a laid-out right of way serving two rear plots. Conversely, a revision of the layout plan, consisting in repositioning the boundaries so as to give each plot direct access to the public road, may take the operation outside the scope of the development permit. This trade-off is made upstream, at the feasibility study stage, because it governs the whole timetable.

The criterion of location

Irrespective of the creation of common facilities, a development permit is required where the subdivision is located within the perimeter of a remarkable heritage site (site patrimonial remarquable), in the surroundings of a historic monument, or in a protected site or a site in the process of being protected. In these perimeters, the approval of the Architect of the Bâtiments de France (ABF) is required and the processing periods are extended pursuant to Articles R. 423-24 et seq. of the French Town Planning Code. A land division concerning a site within the visual field of a protected building therefore falls under the development permit, even if each plot has independent access.

What the applicable regime changes in practice

The choice of regime is not a mere administrative formality. It has knock-on consequences:

• the ordinary processing period goes from one month for a prior declaration to three months for a development permit, not counting extensions and requests for further documents;
• Article L. 441-4 of the French Town Planning Code requires, where the area of land to be developed exceeds 2,500 m², an architect or landscape designer to be engaged to draw up the architectural, landscape and environmental project (PAPE), which is a cost item and a production period in its own right;
• the development permit file includes a layout plan, a works programme, an optional set of rules and, where applicable, the draft articles of association of the free association of landowners (association syndicale libre, ASL) that is to manage the common facilities;
• the development permit opens up the mechanism for selling plots before completion of the works, which does not exist under a prior declaration since no works are prescribed under it;
• in litigation, the development permit is subject to specific procedural rules, including the ten-month period for judgment provided for in Article R. 600-6 of the French Town Planning Code.

A word is needed on the temptation to split the operation. Artificially dividing an operation into successive divisions in order to remain within the declaration regime exposes the developer to two distinct risks: requalification of the whole as a subdivision subject to a development permit, the definition in Article L. 442-1 expressly referring to several contiguous parcels, and a finding of fraud, which deprives the permission obtained of the stability conferred by the expiry of the periods for challenge. A division and resale structure built on this basis remains open to challenge well beyond the ordinary periods.

Selling the plots: a prohibition in principle and a derogation subject to a guarantee

The prohibition on marketing before authorisation

The French Town Planning Code prohibits selling or letting the plots of a subdivision before the development permit is issued or before there is no objection to the prior declaration (Article L. 442-4). The sanction is not merely administrative: a sale concluded in breach of this prohibition is liable to nullity, and the notary responsible for completion will systematically require proof that the permission is final and unchallengeable.

In practice, marketing is therefore organised through unilateral or bilateral sale agreements subject to conditions precedent: obtaining the development permit, expiry of the period for third-party challenge and for administrative withdrawal, the buyer obtaining its building permit and sometimes completion of the servicing works for the plot. Each of these conditions lengthens the period for which the land is tied up and shifts the tipping point between the seller's risk and the buyer's. The drafting of these clauses, in particular the contractual definition of clearance and the fate of the immobilisation indemnity in the event of a challenge, is the real ground for economic arbitration in the operation. The content of the condition precedent of a permit free of challenge and the calibration of the immobilisation indemnity are set out in our article on securing a land acquisition.

The subdivider's completion guarantee

The principle is that plots are sold after the works prescribed by the development permit have been carried out, completion being recorded by a certificate. This sequencing is costly: it requires the subdivider to finance all of the servicing before receiving the first sale price.

Articles R. 442-13 and R. 442-14 of the French Town Planning Code provide for the derogation. The subdivider may be authorised by the competent authority to sell or let the plots before all or part of the prescribed works have been carried out, provided that it supplies a guarantee of completion of the works. This guarantee takes the form of an undertaking by a credit institution or an insurance undertaking, as a joint and several guarantee or an opening of credit, or of a deposit of funds. It covers the cost of completing the servicing in the event of the subdivider's default.

The subdivider's completion guarantee is not to be confused with the financial completion guarantee for sales off plan (vente en l'état futur d'achèvement, VEFA), which relates to the construction of a building and falls under the French Construction and Housing Code. Here it covers only the common development works: roads, networks, green spaces and rainwater management structures. The regime of the financial completion guarantee in a VEFA, its mechanisms and how it is called upon when the developer defaults are set out in our dedicated article.

Its value is one of cash flow before it is legal. It makes it possible to start marketing, and therefore receipts, without waiting for acceptance of the works, and to obtain the issue of building permits on the plots. Its cost, the level of counter-guarantees required by the financial institution and the resulting tying up of equity must be built into the forecast budget from the feasibility study. For an operator with sufficient self-financing capacity, completing the works beforehand is sometimes the most rational option, in particular where the plots sell for more once serviced and marked out.

The link with the buyers' building permits

Resale by plots makes economic sense only if the buyers obtain their building permissions. Two levers secure this point. The first is the completion guarantee, which is a condition for the issue of building permits on the plots where the works are not complete. The second is Article L. 442-14 of the French Town Planning Code, which freezes the applicable planning rules: a building permit may not be refused on the basis of planning provisions that came into force later, for five years from the non-objection to the prior declaration or from completion of the subdivision works recorded under the conditions laid down by regulation.

This five-year freeze is a legal asset in its own right in a context of revision of planning documents and of a change in the trajectory for reducing land take arising from the Climate and Resilience Act No. 2021-1104 of 22 August 2021, as adjusted by Act No. 2023-630 of 20 July 2023. It should be put forward in the marketing case and its starting point should be documented precisely, because it determines the value of the unsold plots at the end of the operation.

Challenge by third parties: the main variable in the marketing timetable

The starting point of the period: display, not issue

The period for third parties to challenge the development permit is two months, but it does not run from the date of issue. Article R. 600-2 of the French Town Planning Code makes the period run from the first day of a continuous two-month period of display on the land. The display must comply with the requirements of Articles A. 424-15 to A. 424-19: format, legibility from the public road, mandatory information, including the characteristics of the operation and a statement of the time limits and means of challenge.

A display that is irregular, discontinuous or poorly recorded does not start the period running. The consequence is harsh for a division and resale structure: the operator believes the permission is final, signs the deeds, starts the works, and remains exposed to a challenge several months later. Recording by a bailiff's report (huissier de justice), at the beginning, middle and end of the display period, is not a comfort precaution but the condition for proving that the permission has become final.

Who may bring a challenge

Article L. 600-1-2 of the French Town Planning Code makes a third party's standing to bring proceedings conditional on showing that the building, development or project is liable directly to affect the conditions of occupation, use or enjoyment of the property that the third party holds or lawfully occupies. An immediate neighbour benefits from a more flexible assessment, but standing must be established by precise evidence: loss of sunlight, traffic nuisance generated by the new road, interference with views, changes to drainage.

Article L. 600-1-1 regulates actions by associations, whose articles of association must have been filed at the prefecture before the application for permission is displayed at the town hall. Article L. 600-7 allows the holder of the permit to claim damages where the challenge goes beyond the defence of the claimant's legitimate interests and causes excessive harm, within the annulment proceedings themselves.

The procedural rules that structure the timetable

Decree No. 2018-617 of 17 July 2018 and the ELAN Act No. 2018-1021 of 23 November 2018 tightened the system. Several mechanisms must be built into the backward planning:

• Article R. 600-1 requires the claimant to notify its challenge to the author of the decision and to its beneficiary, by registered letter with acknowledgement of receipt, within fifteen clear days of filing, on pain of inadmissibility;
• Article L. 600-3 prohibits accompanying the challenge with an application for interim suspension (référé-suspension) after expiry of the period for freezing the grounds, which limits the window for immediately blocking the operation;
• Article R. 600-5 automatically freezes the grounds two months after the first statement of defence is communicated to the parties, preventing the claimant from opening new legal fronts during the proceedings;
• Article R. 600-6 requires the judge to rule within ten months on challenges directed against a development permit for a subdivision;
• Article R. 600-3 makes inadmissible any action for annulment brought more than six months after completion of the development, completion being established by the regulatory declaration;
• Article R. 811-1-1 of the French Code of Administrative Justice removes the right of appeal for certain permissions relating to housing in high-demand areas, the administrative court then ruling at first and last instance, a mechanism extended by successive decrees.

Neutralise rather than endure

Litigation strategy is built before the application is filed, not after the challenge is notified. Three levers deserve to be applied systematically.

The first is regularisation. Articles L. 600-5 and L. 600-5-1 of the French Town Planning Code allow the judge to order a partial annulment limited to the defective part of the project, or to stay proceedings and set a period for a regularisation measure to be produced. An amending development permit, prepared in anticipation of the most serious opposing grounds, turns a risk of annulment into a mere shift in the timetable. The defect must still be capable of regularisation, which rules out a direct incompatibility of the layout plan with the zoning rules. On the choice between an amending permit, an amending decision and a new permit, see our analysis of regularisation during proceedings under Article L. 600-5-1.

The second lever is contractual. The definition of the condition precedent of clearance in the sale agreements, the period of validity of the agreement, the fate of the immobilisation indemnity in the event of a challenge and the seller's right to waive determine who bears the economic risk of litigation. A condition precedent drafted too broadly allows buyers to withdraw on the first challenge, even one that is manifestly inadmissible.

The third lever is upstream and pre-contentious. Identifying the neighbours likely to be affected, examining the objections raised during processing and adjusting the layout plan on the points of friction, in particular the position of the access road and overlooking, reduce the likelihood of a challenge more effectively than a well-conducted defence in court.

The costs and obligations to be built into the operation budget

The development permit generates financial and management obligations that weigh on the profitability of the division and resale.

The development tax (taxe d'aménagement), codified in Articles 1635 quater A et seq. of the French General Tax Code since its management was transferred to the General Directorate of Public Finances by Ordinance No. 2022-883 of 14 June 2022, is due on the development permission. Its base and the date it falls due must be checked against local resolutions, the rate and optional exemptions varying from one municipality to another.

The financing of public facilities made necessary by the operation may be organised by a partnership urban project agreement (convention de projet urbain partenarial), on the basis of Article L. 332-11-3 of the French Town Planning Code. This agreement, negotiated with the municipality or the competent public body, sets the subdivider's contribution and the period of exemption from development tax that goes with it. It is negotiated before filing, because it sometimes determines the political acceptability of the project.

The long-term management of the common facilities must be settled from the file stage: setting up a free association of landowners governed by Ordinance No. 2004-632 of 1 July 2004, with articles of association and a basis for apportioning charges, or transfer of the facilities to the municipal domain by agreement concluded with the municipality. Failure to settle this point generates disputes over charges several years after the commercial close of the operation.

Finally, environmental assessment does not concern only large operations. The heading on works, constructions and development operations in the table annexed to Article R. 122-2 of the French Environmental Code subjects to case-by-case examination operations creating a floor area or footprint equal to or greater than 10,000 m², and to systematic environmental assessment those exceeding 40,000 m². A division operation covering a significant site may therefore trigger a preliminary examination procedure, with the associated delays and risk of challenge.

Conclusion: settle the regime before finalising the layout plan

The development permit is not a constraint to be endured, it is a structuring parameter. In a division and resale operation, the applicable regime is determined by the design of the project: creating a common road or giving each plot direct access to the public road, pooling a retention structure or dealing with it plot by plot, these are engineering choices that bring a difference of several months in the timetable and a substantial difference in the equity required. These choices are made before the land purchase agreement is signed, not after.

Two operational recommendations. First, calibrate the term of the land purchase agreement to the real timetable for the permission, including the extended processing period, the two-month display period and the period for administrative withdrawal, rather than to the theoretical processing period. Second, have the draft layout plan audited by litigation counsel before filing, in order to identify the most plausible grounds for annulment and to prepare, where appropriate, the outline of an amending permit for regularisation. A defect anticipated costs an amending permit; a defect discovered at the hearing costs a marketing season.

Frequently asked questions

From how many plots is a development permit needed? The number of plots is not the criterion. Since Ordinance No. 2011-1916 of 22 December 2011, the detachment of a single plot intended to be built on is enough to constitute a subdivision within the meaning of Article L. 442-1 of the French Town Planning Code. A development permit is required, pursuant to Article R. 421-19 a), where the operation provides for the creation or laying out of roads, spaces or facilities common to several plots and specific to the subdivision, or where it is located in a remarkable heritage site, in the surroundings of a historic monument or in a protected site or a site in the process of being protected. Otherwise, the subdivision falls under the prior declaration provided for in Article R. 421-23 a).

Does a right of way serving two rear plots trigger the development permit? The question is settled by the nature of the development, not by its classification in civil law. A simple right of way over a strip of land that has not been laid out may leave the operation within the declaration regime. By contrast, where the access involves building a structure common to several plots, such as a metalled road, a turning area or shared networks, the criterion in Article R. 421-19 a) is met and a development permit is required. The point deserves to be secured by an operational planning certificate (certificat d'urbanisme opérationnel) or by consulting the processing authority before filing.

Can plots be sold before the servicing works are finished? Yes, on two cumulative conditions. The subdivider must be authorised to proceed with the sale before all or part of the prescribed works have been carried out, and it must supply a guarantee of completion of the works issued by a credit institution or an insurance undertaking, under the mechanism of Articles R. 442-13 and R. 442-14 of the French Town Planning Code. This subdivider's completion guarantee covers only the common development works and is distinct from the financial completion guarantee applicable to a sale off plan.

What is the period for third parties to challenge a development permit? Two months, but the starting point is display and not issue. Article R. 600-2 of the French Town Planning Code makes the period run from the first day of a continuous two-month period of display on the land, complying with Articles A. 424-15 et seq. A display that is irregular or interrupted does not start the period running. The burden of proving that the display was regular and continuous rests on the holder of the permit, which justifies several bailiff's reports (huissier) spread over the period.

Does a challenge by third parties automatically suspend the development permit? No. An action for annulment has no suspensive effect. Only an interim suspension order can stop the operation, and Article L. 600-3 of the French Town Planning Code limits this possibility to the period before expiry of the period for freezing the grounds. In practice, the blockage comes less from the judge than from the contracts: the conditions precedent of clearance inserted in the sale agreements and the clauses of the financing agreements paralyse marketing as soon as the challenge is notified.

How long does the administrative judge take to rule on a challenge to a development permit? Article R. 600-6 of the French Town Planning Code requires the judge to rule within ten months on challenges directed against a development permit for a subdivision. This period is not prescribed on pain of the court losing jurisdiction, but it structures the proceedings. To this is added, for certain housing operations located in high-demand areas, the removal of the right of appeal provided for in Article R. 811-1-1 of the French Code of Administrative Justice, the administrative court then ruling at first and last instance under the supervision of the Conseil d'État.

Can the planning rules change between obtaining the development permit and reselling the last plots? Article L. 442-14 of the French Town Planning Code protects the operation: a building permit on a plot may not be refused on the basis of planning provisions that came into force later, for five years from the non-objection to the prior declaration or from completion of the subdivision works recorded under the conditions laid down by regulation. This five-year freeze is a marketing argument in a context of revision of planning documents. Beyond that, the unsold plots become subject again to the rules in force, which makes it necessary to calibrate the pace of marketing to this deadline.