Deferral of a decision on planning permission (Art. L. 424-1 Town Planning Code): neutralising a planning block in a project timetable

A preliminary agreement signed subject to obtaining planning permission (permis de construire) protects the purchaser against a refusal. It does not protect the purchaser against a decision that refuses nothing and grants nothing: the deferral of decision (sursis à statuer). The competent authority postpones its answer, for up to two years, and the project timetable slips by as much, with unbudgeted holding costs, financing to be renegotiated and a condition precedent whose legal characterisation becomes uncertain. This guide treats the deferral of decision as what it is from the investor's point of view: a timing risk that can be identified before signing, and challenged afterwards. It covers the due diligence to carry out before entering into a preliminary agreement, the points of legal weakness in a deferral, and the two exits open to the applicant: a challenge, and the right of abandonment (droit de délaissement) under Article L. 230-1 of the French Town Planning Code.

What Article L. 424-1 of the Town Planning Code really permits

The deferral of decision is a safeguarding measure. It allows the competent authority not to rule on an application for planning consent where the project is liable to jeopardise a regulatory change or a public operation under way. It is neither a refusal nor a consent: the application remains pending, the project is frozen.

Article L. 424-1 of the French Town Planning Code provides several distinct grounds, which must be identified precisely because the conditions of lawfulness are not the same:

• the preparation or revision of a local urban plan (plan local d'urbanisme, PLU), by cross-reference to Article L. 153-11, once the debate on the general orientations of the sustainable planning and development project (projet d'aménagement et de développement durables, PADD) has taken place;
• the creation of a joint development zone (zone d'aménagement concerté, ZAC), by cross-reference to Article L. 311-2, from publication of the creation instrument;
• operations of national interest and projects of general interest, by cross-reference to Article L. 102-13;
• the opening of the preliminary inquiry for a declaration of public utility, for land intended to be included in the operation;
• the formal consideration of a public works project, where the land affected has been delimited;
• the formal consideration of a development operation project by the competent municipality or inter-municipal authority, where the land affected has been delimited;
• the preparation or revision of a safeguarding and enhancement plan for a remarkable heritage site, and the cases provided for by the French Mining Code.

Two cross-cutting conditions govern the formal-consideration grounds: the decision to take the project into consideration must have been published before the planning application was filed, and it ceases to have effect if, within ten years of its entry into force, the execution of the public works or the carrying out of the development operation has not begun. The deferral must be reasoned and may not exceed two years.

The operational distinction to remember: a PLU under revision opens the way to a deferral, a mere modification of the PLU does not, for want of a debate on the general orientations of the PADD. This difference, invisible to a purchaser who reads only that “the planning document is changing”, determines whether the risk exists at all.

Why the deferral falls outside the standard clauses of the preliminary agreement

The condition precedent of obtaining planning permission is drafted, in most preliminary agreements, around two events: the issue of a permission free of any appeal and any withdrawal, or a refusal. A deferral of decision is neither. It nevertheless produces an economic effect close to that of a temporary refusal, over a period that may reach two years, to which are added the time limits of any challenge. Where the permission issued is challenged, curing the defect during the proceedings is dealt with separately in our article on amending planning permission and regularisation.

The consequences show up under three heads. First, holding costs: an immobilisation indemnity tied up, the project's overhead costs, project management fees already incurred on a file that has been examined. Second, financing: a bank term sheet calibrated to a timetable for filing and clearing appeals does not survive a two-year slippage without renegotiation of its terms. Third, the asset: if the revision results in less favourable zoning, the acquisition value negotiated on a given building potential becomes meaningless, and the original appraisal has to be done again.

The decisive point is this: a deferral is not an insurable hazard, it is information available before signing. The PADD debate is a public deliberation. The creation of a ZAC is the subject of a published instrument. Formal consideration of a development project requires a deliberation and a delimitation of the land. An investor who discovers the deferral on notification of the decision has not been the victim of an administrative hazard: it has not cleared the risk.

Clearing the risk before signing: the planning due diligence to carry out

The documents to request

The search is not limited to the PLU in force. It covers what is under way, that is, instruments that do not appear in the planning document available online. To be requested systematically, from the town hall and from the competent inter-municipal authority (EPCI):

• the deliberation ordering the preparation or revision of the PLU, and above all the minutes or the deliberation recording that the debate on the general orientations of the PADD has taken place, with its date;
• the forecast timetable of the procedure: adoption of the draft, consultation of the associated public bodies, public inquiry, approval;
• the development and programming guidelines (orientations d'aménagement et de programmation, OAP) planned for the area, which reveal better than the zoning what the local authority intends to carry out there;
• the instruments creating ZACs, study perimeters, deliberations taking a development or public works project into consideration and the plans delimiting the land concerned;
• the orders opening a preliminary inquiry for a declaration of public utility in the area;
• the existence of reserved sites, project easements or waiting perimeters for a comprehensive development project, which signal a public intention regarding the land.

The operational planning certificate (certificat d'urbanisme opérationnel) remains useful, but its effect must be understood exactly. The crystallisation attached to the certificate concerns the planning provisions, the regime of taxes and contributions and the administrative limitations on the right of property existing at its date. It protects against changes in the substantive rules applicable to the project. It does not make the land an asset immune from a safeguarding measure. The useful reflex is to ask the municipality expressly about the progress of the procedure to change the planning document and about the existence of formal-consideration perimeters, and then to keep the written reply. The exact scope of this protection and its limits are analysed in our article on what the operational planning certificate really crystallises.

What the preliminary agreement must provide for

Once the risk has been identified, it is dealt with through drafting. Three adjustments, to be weighed according to the balance of bargaining power:

• expressly treat the deferral of decision as non-fulfilment of the condition precedent, with return of the immobilisation indemnity, or failing that give the beneficiary a right of unilateral withdrawal within a fixed period after notification of the deferral;
• set an independent long-stop date for fulfilment of the condition, separate from the examination timetable, so that the transaction does not remain suspended on an administrative decision that can be postponed for two years;
• allocate contractually the burden of the challenge: who files the administrative appeal to the authority (recours gracieux), who brings the application for judicial review for abuse of power (recours pour excès de pouvoir), who bears the fees, and what becomes of the preliminary agreement while the proceedings are pending.

On the seller's side, symmetry is just as important: an agreement whose condition precedent is held in suspense for two years immobilises the asset without consideration. The interests of both parties converge on a short long-stop date and a clear exit clause. The drafting of the condition precedent of final planning permission and the control of its time limits are set out in our article on securing a land acquisition subject to planning permission.

Reviewing the lawfulness of the deferral: the usual points of weakness

A challenge to a deferral of decision begins with a review of external and internal lawfulness. Four lines of attack recur.

Compliance with the examination period

The deferral must be notified before the examination period expires, which may be extended in the cases provided for by the code. Once that period has passed, a tacit decision has come into being. A deferral notified out of time does not suspend the examination: it runs up against a tacit consent already acquired, which can be called into question only under the conditions for withdrawal. Checking the dates of filing, of completeness of the file, of notification of any request for further documents and of extension of the period is therefore the first task, before any discussion of the merits.

The reasons given

The deferral is an unfavourable decision that must be reasoned in law and in fact. Reasons that merely cite the deliberation ordering the revision of the PLU, without explaining how the project would jeopardise or make more costly the implementation of the future plan, are fragile. The reasons must allow the applicant to identify the exact legal basis, the orientation of the future document that the project would run counter to, and the period chosen.

The substantive conditions

Each ground has its own conditions, and each can be verified. For a PLU under revision, the debate on the general orientations of the PADD must have taken place, and the progress of the procedure must be sufficiently established. For the formal-consideration grounds, the instrument must have been published before the application was filed and the land affected must have been delimited: a deliberation of intent without an identified perimeter is not enough.

On the substance of the reasoning, the authority must establish that the project is liable to jeopardise or make more costly the implementation of the future plan or of the operation. A mere divergence between the project and a general orientation does not automatically establish that harm. The review turns on a concrete assessment: siting, footprint, intended use, impact on the perimeter of the planned operation. A project that complies with the PLU in force and is compatible with the announced orientations cannot be frozen on the sole ground that the local authority wishes to give itself time.

Duration and repetition

Two years is a ceiling, not an acquired right to two years. The duration must remain proportionate to the real progress of the procedure relied on. Nor may the administration use the safeguarding measure as a tool of permanent freezing by renewing the same ground indefinitely on the same application. The chronology of successive decisions applied to the same land deserves to be reconstructed and placed before the court.

The means of response and the procedural timetable

The deferral is an administrative decision open to an application for judicial review for abuse of power within two months of its notification. An administrative appeal to the author of the act extends that period and has real practical value: it allows the applicant to set out, with supporting documents, that the legal conditions are not met, and sometimes to obtain a re-examination without litigation. The notification requirement in Article R. 600-1 of the French Town Planning Code applies to appeals brought against consents; an appeal by the applicant against a decision unfavourable to it falls under the ordinary regime.

The interim suspension application (référé-suspension) under Article L. 521-1 of the French Code of Administrative Justice deserves consideration where urgency is established by objectively verifiable economic factors: the expiry of a preliminary agreement, the maturity of a financing, a documented holding cost. Suspension of a negative decision has a useful effect only if accompanied by an injunction to re-examine the application on an interim basis, which the interim relief judge can order. Urgency is not presumed: it is demonstrated with contractual and financial documents, not with general assertions about the profitability of the project.

Annulment of the deferral is not a permission. It requires the competent authority to rule again on the application. The judge may, depending on the circumstances, order the application to be re-examined within a fixed period, or even the consent to be issued where the state of the file reveals no other ground for refusal. The sensitive point is that of the rules applicable on re-examination: a decision taken after the approval of a new planning document is in principle assessed against that document. The mechanism of Article L. 600-2 of the French Town Planning Code, which allows an applicant who confirms its application within six months of the annulment to escape planning provisions that have come into force in the meantime, is drafted for the annulment of a refusal or of an objection to a prior declaration: whether it applies to a decision to defer must be examined case by case, and must not be taken for granted when building the timetable.

That is the decisive argument in favour of an immediate response. Letting the deferral run amounts to accepting that the application will be re-examined under the planning document that the local authority is in the very process of adopting. Time works against the applicant.

The obligation to rule after the deferral expires

The last paragraph of Article L. 424-1 organises the exit from the deferral through a strict mechanism of time limits.

On expiry of the period of validity of the deferral of decision, a decision must, on the mere confirmation of the application by the person concerned, be taken by the competent authority responsible for issuing the consent, within two months of that confirmation. That confirmation may be given no later than two months after the expiry of the period of validity of the deferral of decision.

Two periods of two months, then, to be entered in the calendar as soon as the deferral is notified. The first is in the applicant's hands: confirmation of the application must be sent within two months of the expiry of the deferral. It is a simple formality, but omitting it loses the benefit of the mechanism. The second binds the administration: failing notification of a decision within two months of the confirmation, the consent is deemed granted on the terms in which it was applied for.

The confirmation must be sent by a means giving it a certain date, refer expressly to the original application and its registration number, and contain no modification of the project, a modified application being treated as a new application subject to a fresh examination. In practice, this deadline is the one most often missed in long projects, because it sometimes falls after a change of contact at the project sponsor or at the project manager (maître d'œuvre).

The right of abandonment under Article L. 230-1: turning the block into an exit

Article L. 424-1 opens a second route, too little used: where a decision to defer has been made, the owners of the land concerned may serve formal notice on the local authority or public service that took the initiative for the project to acquire their land, under the conditions and time limits of Articles L. 230-1 et seq. of the French Town Planning Code.

The right of abandonment under Article L. 230-1 reverses the logic. Rather than suffering the freeze, the owner compels the local authority to make a choice: either it acquires the land, or it bears the political and budgetary cost of refusing. The formal notice is addressed to the town hall of the municipality where the property is located. The local authority has one year from its receipt at the town hall to respond. Failing an agreement within that period, the expropriation judge, seised by either party, orders the transfer of ownership and fixes the price of the land. The time limits for referral after the one-year period expires are short and failure to observe them renders the procedure ineffective: they should be entered in the calendar from the moment the formal notice is sent.

Three economic points of judgement govern the decision to use it.

The first is identifying the debtor: the formal notice is aimed at the local authority or public service that initiated the project, which is not always the authority that signed the deferral. An error as to the addressee loses a year.

The second is valuation. The price is fixed under the rules of expropriation, which requires anticipating the classification of the land and its actual use. Land acquired on the basis of expected building potential will not necessarily be compensated up to that expectation. Abandonment is an exit, not a capital gain.

The third is the interplay with litigation. Starting an abandonment does not prevent a challenge to the deferral, but the two steps pursue opposite purposes: one aims to leave the asset, the other to exploit it. The strategy must be settled at the outset, according to the likelihood of obtaining the permission after re-examination and the investor's capacity to carry the land for the combined duration of the deferral and the proceedings.

For an institutional owner faced with a lasting freeze on a non-productive asset, abandonment is often the only outcome that puts a price against the blockage. For a developer under a preliminary agreement, it makes sense only if the seller remains the owner and agrees to initiate it, which again requires contractual drafting in advance.

Conclusion: treat the deferral as a line in the timetable, not as an incident

The deferral of decision is not a hazard: it is a documented risk, whose triggering elements are public before any preliminary agreement is signed. An investor who buys subject to planning permission without having checked the date of the PADD debate, the existence of a ZAC and the deliberations taking projects into consideration in the area accepts, without pricing it, a possible two-year slippage and a re-examination under a future planning document.

The position we take is simple. A deferral is to be challenged immediately, by a documented administrative appeal and then, if necessary, by an application for judicial review for abuse of power, accompanied where appropriate by an interim suspension application. Waiting for it to expire amounts to giving the local authority the time it needs to make the project unachievable, since the decision to be taken after confirmation will be assessed against the rules then in force. The right of abandonment is not a second choice: it is the negotiating lever to activate where the challenge offers no reasonable prospect of permission.

Before any signature on land located in a municipality whose PLU is under revision or close to a development perimeter, have an exposure note on deferral drawn up, dated and sourced to the deliberations, and have the deferral contractually characterised as a cause of non-fulfilment of the condition precedent. After notification of a deferral, immediately enter four deadlines in the calendar: the two-month appeal period, the expiry date of the deferral, the two-month confirmation period and the two-month period given to the administration to rule.

Frequently asked questions

Can a deferral of decision be applied if the PLU is only being modified? No. A deferral based on a change to the planning document requires, under Article L. 153-11 of the French Town Planning Code to which Article L. 424-1 refers, that the debate on the general orientations of the sustainable planning and development project has taken place. That debate occurs in the context of a preparation or a revision, not of a modification procedure. Checking the exact nature of the procedure under way is therefore the first task: the deliberation ordering the procedure states its purpose and basis.

What is the maximum duration of a deferral of decision on planning permission? Article L. 424-1 of the French Town Planning Code sets a ceiling of two years and requires the decision to be reasoned. This ceiling does not allow the administration systematically to adopt the maximum duration: it must remain proportionate to the progress of the procedure relied on. A deferral pronounced for two years when the public inquiry on the future PLU is imminent can usefully be argued on that ground.

What should be done when the deferral expires in order to obtain a decision? The application must be confirmed to the competent authority, in writing giving it a certain date, no later than two months after the period of validity of the deferral expires. The administration then has two months to notify a decision. Failing notification within that period, the consent is deemed granted on the terms in which it was applied for. The confirmation must relate to the original application without modification of the project.

Must an appeal against a deferral of decision be notified to the town hall within fifteen days? The notification requirement in Article R. 600-1 of the French Town Planning Code applies to appeals brought against planning consents, planning certificates and decisions not to object to a prior declaration. An appeal by the applicant against a decision unfavourable to it falls under the ordinary regime of the application for judicial review for abuse of power, within two months of notification. A prior administrative appeal extends that period.

Does an operational planning certificate protect against a deferral of decision? Only partially. The crystallisation provided for in Article L. 410-1 of the French Town Planning Code concerns the planning provisions, the regime of taxes and contributions and the administrative limitations on the right of property existing at the date of the certificate. Its purpose is not to neutralise a safeguarding measure intended to protect a procedure for changing the planning document or a development operation. The certificate remains useful for documenting the state of the procedures under way, provided the municipality is asked expressly on that point.

Is the right of abandonment under Article L. 230-1 open in every case of deferral? Article L. 424-1 gives the owners of the land against which the deferral was applied the right to serve formal notice to acquire, against the local authority or public service that took the initiative for the project, under the conditions of Articles L. 230-1 et seq. Identifying the addressee is decisive: it is not necessarily the authority that signed the decision. The local authority has one year from receipt of the formal notice at the town hall to respond, failing which the expropriation judge may be seised to order the transfer and fix the price.

Can a deferral of decision be applied after the examination period has expired? No. The deferral must be notified within the examination period, extended where applicable under the conditions provided for by the regulatory part of the code. Once that period has passed without notification, a tacit decision has come into being and a deferral notified afterwards runs up against that consent. Reconstructing precisely the dates of filing, of completeness of the file and of notification of requests for further documents is therefore the first ground of challenge.