An unjustified delay by the local council in granting an urban planning licence can cause substantial losses to developers and private individuals who need to start their works or projects. Find out how to claim compensation from the council for the losses you have suffered.

When is a delay considered unjustified?

As a general rule, urban planning licence applications must be resolved within a maximum period of 3 months in the Balearic Islands (Article 151.4 LUIB), although this varies by regional legislation. If this deadline expires without a response and no justified cause is demonstrated (complex proceedings, pending rectification not attributable to the applicant, etc.), the delay is considered unjustified and constitutes abnormal functioning of the public administration.

One-year time limit to claim

The law establishes that, in order to pursue a state liability claim against the administration, the affected party has one year from the moment the damage occurs or becomes apparent.

If you have suffered economic losses (for example, your project has been delayed, you have paid rent or interest that you would not have incurred had the licence been granted on time), you must initiate the claim within one year from the date you had actual knowledge of those losses.
Missing this deadline may result in the time-barring of your claim and the loss of your right to compensation.

What losses can be compensated?

Direct losses: Additional expenses incurred as a result of the delay (equipment hire, professional fees, financing costs, etc.).

Loss of profit: Profits or income that would have been obtained had the licence been granted on time (property sales, rental income, etc.).

Steps to claim compensation

Gather all documentation: Administrative file, invoices, contracts, correspondence with the council, etc.
Seek professional advice: A solicitor specialising in planning law will be able to advise you on how to quantify the loss and draft the claim.
Submit the state liability claim: It must be addressed to the responsible council, detailing the facts, the legislation breached (TRLSRU, LRJSP, LPACAP) and the evidence supporting the loss.
Mind the one-year deadline: It is essential not to let this deadline pass from the moment the losses become known.

Judgment 512/2019 of the High Court of Justice of Madrid: Key case law

One of the most significant precedents is Judgment 512/2019 of the High Court of Justice of Madrid, in which a developer's right to compensation was recognised following an unjustified or belated grant of an urban planning licence. The key findings were:

Abnormal functioning of the administration: The council exceeded the statutory deadlines, failing its duty to reach a decision.
Right to compensation: It was established that the unjustified delay in granting the licence caused economic loss (direct losses and loss of profit) and therefore gave rise to a right to financial compensation.
Causal link: The delay was found to be the direct cause of the losses suffered by the developer.

Conclusions

An unjustified delay in the granting of urban planning licences constitutes abnormal functioning of the public administration and can lead to serious economic losses for applicants. Planning legislation and case law (as illustrated by Judgment 512/2019 of the High Court of Justice of Madrid) recognise the right to compensation for direct losses and loss of profit arising from such delays.

To preserve your right to claim, it is essential to bear in mind the one-year time limit from the date the loss occurs. If you believe your project has been affected by an unjustified delay in the granting of a licence, gather your documentation, seek legal advice and do not hesitate to submit your claim within the prescribed period.

Do you need to claim for a delay in your urban planning licence?

Contact specialist solicitors in planning law and protect your interests before the one-year deadline expires. Do not allow administrative inaction to jeopardise your project.

Important Notice: The information contained in this article is provided for general information purposes only and does not constitute legal advice.

How to Claim Compensation for Unjustified Delay in Granting an Urban Planning Licence