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Planning and environmental issues

Planning

Which government authorities regulate planning and zoning for real estate development and use in your jurisdiction and what is the extent of their powers?

The Planning Act delegates responsibility for planning between the minister of business and industry and the municipal councils. The purpose of the Planning Act is to ensure a unified planning system that protects nature and the environment and creates the grounds for growth and development.

The Danish government is responsible for national planning interests, while the local councils are responsible for spatial development plans and the planning of towns (ie, preparation of local plans). For example, larger real estate development projects usually require adoption of a new local plan of the area.

What are the eligibility, procedural and documentary requirements to obtain planning permission?

When applying for a building permit, the authorities will check whether a given project is within applicable planning parameters. If not, dispensations may be sought or it may be necessary to seek to get a new local plan adopted. In principle, any developer may seek to convince the authorities to adopt a planning foundation that permits the project and usage in mind. However, ultimately it is a political decision as to whether a proposed local plan is adopted. A new local plan is often drafted in close cooperation between the developer and the planning and technical departments of the municipality in question.

Can planning decisions be appealed? If so, what is the appeal procedure?

Local plans may be appealed to the Danish Planning Committee in regards to legal questions. The complaint must be submitted at least four weeks after the decision regarding the local plan has been announced.

What are the consequences of failure to comply with planning decisions or regulations?

The municipalities are responsible for ensuring that a constructed building complies with building regulations. The requirements for the construction of a building as set out in the Building Act and the planning requirements will usually be stated in the municipality's building permit. Where the municipality becomes aware of illegal circumstances, the municipality must seek to have the building legalised. Violation of the Building Act may incur fines and ultimately the removal of (the illegal parts of) a building.

What regime governs the protection and development of historic and cultural buildings?

The Act on Building Preservation governs the protection of buildings that are worthy of preservation. According to this act, the minister of culture may preserve a building of substantial architectural value or culture-historical value under certain circumstances. The Agency for Cultures and Palaces manages and maintains state-owned palaces, castles, gardens and cultural properties and is responsible for listing historic buildings and for the protection of ancient sites and monuments.

The municipalities are also required to protect Danish cultural heritage when undertaking local planning by reflecting this in the local planning guidelines.

Further, a citizen can submit a proposal for the listing of a building with the Agency for Culture and Palaces, which will assess whether the building fulfils the listing requirements.

Where a building is listed as worthy of preservation, it may not be demolished unless special permission has been obtained from the relevant local authority.

Government expropriation

What regime applies to government expropriation of real estate?

According to the Planning Act, the municipal council may expropriate private property if doing so is materially necessary to realise local planning objectives. The municipal council will inspect the property to be expropriated with at least four weeks' notice. An expropriation proceeding will thereafter be initiated with at least four weeks' notice given to the owners, users and others with a cause of action, who will be able to comment on the expropriation. The municipal council will offer compensation to the property owner. If the owner disagrees with the amount of compensation offered, they may ask the valuation authorities to decide on compensation. The valuation authorities' decision on compensation may be brought before the valuation commission.

If the Danish government wants to conduct expropriation in order to (for example) complete larger infrastructure projects, normally a construction law will be adopted for the project which sets the guidelines for expropriation. The authority responsible for the project will then ask the minister of transportation to conduct the expropriation. The minister refers the case to an expropriation commission, which summons the owners to an inspection of the properties with at least four weeks' notice. When the commission has decided on the extent of the expropriation, the owners will again be summoned to an inspection with at least four weeks' notice. After this inspection, the commission will suggest the amount of compensation. If the owner disagrees with this amount, the commission will decide on the compensation. The decision may be brought before the valuation commission.

What is the required notice period for expropriation and how is compensation calculated?

The required notice period is at least eight weeks. In many cases the land owner will be given even longer notice. Compensation in case of expropriation is calculated by the municipal council or the expropriation commissions. The decisions may be brought before a valuation commission.

Environmental issues

What environmental certifications are required for the development of real estate and how are they obtained?

No environmental certifications as such are required for the development of real estate.

The environmental requirements can be divided into those relating to the planning and construction phases and those relating to the business operations undertaken in the building once constructed. During the construction phase, environmental requirements set out in the building permit, the local plan and laws and regulations in general must be adhered to, including (for example) preservation requirements and rules for the proper handling of polluted soil.

Once the building is taken into use, the nature of the business activities undertaken at the property will determine which environmental certifications are required. If such activities are governed by the Environmental Protection Act, the company in question must obtain an environmental permit that sets the requirements for such activities. A company may also be governed by other similar environmental legislation in Denmark, which entails that the public authorities may inspect the company's activities undertaken at the property in relation to contamination, emission, noise and waste handling, among other things.

If the user of the property is not the owner of the property, the user will generally be responsible for the fulfilment of the environmental requirements directed at the business operations. 

What environmental disclosure obligations apply to real estate sales?

The seller is generally subject to the obligation under Danish law to loyally disclose any matter which may be of importance to a buyer when deciding whether to conclude a purchase agreement. During the course of any due diligence, the seller must also loyally cooperate and answer any questions truthfully. It suffices for the seller to fairly disclose documents to the buyer, from which such matters may be derived during the buyer's due diligence. The buyer conversely has an obligation to carry out reasonable investigations (caveat emptor).

What rules and procedures govern environmental clean-up of property? Which parties are responsible for clean-up and what is the extent of their liability?

Danish environmental laws and regulations generally reflect (with certain exceptions) the ‘polluter pays’ principle.

According to the Soil Contamination Act, a ‘polluter’ is any party who:

  • for commercial or public purposes operates or operated the enterprise or uses or used the plant from which the pollution originated; or
  • has caused pollution to occur through reckless conduct or by conduct which falls within stricter liability rules under other legislation.

The legislation expressly states that the pollution or part thereof must have occurred in the said period of operation.

The registration of soil pollution at V1 or V2 level (V1 referring to expected/likely pollution and V2 referring to known pollution) does not imply a liability or an obligation to clean up the contaminated areas, nor does it restrict the continued current use of the area.

Thus, registration pursuant to the Soil Contamination Act primarily has the effect that a changed and more sensitive use of the area (eg, for residential purposes or a public playground) requires a special permit from the authorities, and that removal of soil from a registered area requires prior notification to the authorities.

Are there any regulations or incentive schemes in place to promote energy efficiency and emissions reductions in buildings?

In Denmark, energy labelling of buildings is mandatory and entails that buildings are labelled in accordance with their energy usage. The labelling is based on an inspection of the building conducted by an energy consultant.

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